The Real Deal August 2015

18

Bid now, decide later

30

Moguls dominate Jersey Shore town

www.TheRealDeal.com

Spitzer’s designs on Williamsburg

70

72

Staten Island’s building boom

N EW YO R K R E A L E S TATE N E W S

120

Brad Pitt to star in ‘Liar’s Ball’ movie?

Vol. 13 No. 8 August 2015 $3.00

The s r o t c e l l co

ustr y titans d in e th , ff o k s in M to e w From Macklo folios p42 rt o p rt a t s e g ig b e th d e s who have amas From left: Edward Minskoff, Harry Macklowe,

Aby Rosen, Sheldon Solow and Jerry Speyer

For dynasties: Adapt or die

Rufrano’s big repositioning

Social media numbers crunch

How four NYC real estate families are shaking up their strategies to battle today’s new rivals p32

Can the new American Realty Capital CEO turn around the scandalplagued firm? p50

A deep dive into all the tweeting, posting and sharing by NYC residential firms p36 ILLUSTRATION BY NOAH PATRICK PFARR

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My one-stop, turn-key approach to a renovation eliminates all the ridiculous layers, insane change orders and moronic excuses so often associated with the traditional architect / general contractor model.

WE WILL HELP YOU CLOSE THE DEAL.

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DESIGN - BUILD SOLUTIONS | OWNERS REPRESENTATION | PRE-PURCHASE CONSULTING HEADQUARTERS & DESIGN STUDIO | 1477 THIRD AVENUE, NYC | 212.517.7020

Photograph: Tex Jernigan

Contents A U G U S T 2 0 1 5

18

Win now, decide later

20

Playing both sides

22

Rooftop reprieves

More buyers bid on apartments they don’t want — just in case.

Residential agents broker more off-market commercial deals.

From office terraces to saltwater pools, a look at NYC’s roof obsession.

22 A rendering of Manhattan’s rooftops

24 At the desk of: Sherwin Belkin The legal eagle on the latest rentregulation law, wind-up toys and his ‘Napoleon Dynamite’ habit.

Sherwin Belkin of law firm Belkin, Burden, Wenig & Goldman

jumps sharply 26 CMBS Half of the top 10

Sub Culture

commercial loans in NYC in the last year have been securitized.

A map of who owns homes in Deal, N.J.

Deal 30 Dominating Just how many properties do NYC’s Syrian Jewish real estate moguls own in this Jersey hamlet?

30

Every day 300,000 subway riders stream through

32

Manhattan’s Fulton Center, their underground trek now brightened by entertainment venues and daylight

For family dynasties: It’s adapt or die

YLÅLJ[LK MYVT P[Z ZR`SP[ JHISL UL[ V]LYOLHK (U PU[LNYH[LK artwork by James Carpenter Design Associates, Grimshaw Architects, and Arup [OPZ THY]LS VM

Real estate families are shaking up strategies and battling forces, like REITs and private equity, to stay competitive.

JVSSHIVYH[PVU PZ H UL^ IYPNO[ ZWV[ ILULH[O JP[` Z[YLL[Z Read more about it in Metals in Construction VUSPUL

From left: Jerry Speyer, Douglas Durst, Bill Rudin and Tony Malkin

36 > > > 6 4 0 5 @ 6 9 .

Saturating social Residential firms are flooding social media, but how effective is posting photos and tweeting to the bottom line?

8 August 2015 October 2012www.TheRealDeal.com www.TheRealDeal.com

www.TheReal-

Deal.com March 2012 00

Architect: Skidmore, Owings & Merrill Structural Engineer: WSP Cantor Seinuk Photograph: Tex Jernigan

Contents continued 46 Addicted to art From Macklowe to Minskoff, the industry moguls who have amassed the biggest art collections.

From left: Edward Minskoff, Harry Macklowe, Aby Rosen, Sheldon Solow and Jerry Speyer

Glenn Rufrano will soon reveal his detailed turnaround strategy.

50 Rufrano’s repositioning American Realty Capital’s new CEO begins executing his game plan to turn around the scandal-plagued firm.

60

Aurora’s ascent

64

Day in the life of: Tim Davis

The under-the-radar development firm has quietly built up one of the largest retail pipelines in the city.

18

The Hamptons’ superbroker on his burgeoning development business, his five pets and 30-plus listings.

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

World View While the world watched, One World Trade Center grew in both height and symbolism, its 1,776-foot crystalline form bringing unmatched views back to Lower Manhattan. A redundant structural steel frame, the result of creative collaboration between Skidmore, Owings & Merrill and WSP Cantor Seinuk, ensures that its safety is as substantial as its stature.

Read more about it in Metals in Construction online.

“forgotten” 72 The borough gets noticed

26

Four mega-projects could jumpstart Staten Island’s waterfront.

Commercial Market Report A review of significant issues in Manhattan’s commercial sector.

The New York Wheel, which is scheduled to open in the borough in 2017

76 South Florida Market Report Real estate news from the Sunshine State.

78 National Market Report

120

Reports from around the country on significant developments and trends.

Dreaming of Brad Pitt Could the superstar play a leading real estate exec in “The Liar’s Ball” movie?

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

114 Calendar of Events

W W W . S I N Y. O R G

Check out this month’s activities.

Closing: Joshua Muss 122 The The outer borough developer on

120

being born into privilege, gambling and taking the wrong bridge.

10 August October2015 2012www.TheRealDeal.com www.TheRealDeal.com

We Heard A lighter look at industry buzz.

www.TheRealDeal.com March 2012 00

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THE REAL DEAL N E W YO R K R E A L E S TAT E N E W S PUBLISHER Amir Korangy EDITOR-IN-CHIEF Stuart W. Elliott MANAGING EDITOR Jill Noonan DEPUTY MANAGING EDITOR Eileen AJ Connelly EDITORIAL DEVELOPMENT DIRECTOR Heather Grossmann MANAGING WEB EDITOR Hiten Samtani DEPUTY WEB EDITOR James Kleimann

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

You need Rosewood Realty Group

SOUTH FLORIDA MANAGING EDITOR Ina Cordle ART DIRECTORS Ronald Gross, Keziah Makoundou SENIOR REPORTER/RESEARCH MANAGER Adam Pincus REPORTERS Rich Bockmann, E.B. Solomont, Konrad Putzier CONTRIBUTORS C. J. Hughes, Jennifer White Karp ASSOCIATE WEB EDITOR Mark Maurer SOCIAL MEDIA EDITOR Kerry Barger WEB PRODUCERS/WEB REPORTERS Tess Hofmann, Katherine Kallergis, Claire Moses, Sean Stewart-Muniz, Rey Mashayekhi PRODUCTION MANAGER Victoria Tuturice RESEARCHERS Kyna Doles, Will Parker, Karen Malmquist CONTRIBUTING REPORTER Ariel Stulberg

212.359.9900

www.rosewoodrealtygroup.com

Rosewood Knows New York We are pleased to announce that for the year-to-date July 28th 2015, Rosewood has completed total sales of $2,409,818,050 which include: Brooklyn: Aggregate sales of

$853,355,050

92 Buildings / 3,380 Residential Units / 44 Commercial Units Manhattan: Aggregate sales of

$544,601,000

50 Buildings / 1,228 Residential Units / 47 Commercial Units Bronx: Aggregate sales of

$621,890,000

69 Buildings / 3,749 Residential Units / 107 Commercial Units

CONTRIBUTING DESIGNER Juan Zielaskowski PHOTOGRAPHER Marc Scrivo DIRECTOR OF MARKETING OPERATIONS Yoav Barilan NATIONAL ADVERTISING DIRECTOR Ross Fox SOUTH FLORIDA ADVERTISING DIRECTOR Chris Cuomo ADVERTISING SALES Eran Evron, Nick Mascaro, Robert Stearns, Nicki Chadi, Sigalit Levi, Marcus Guest, Barry Holland, Justin O’Garrow DIRECTOR OF DIGITAL SALES Junaid Zahid DIGITAL SALES MANAGER Eric Reyes MARKETING MANAGER Judy Levine DIGITAL MARKETING ASSISTANT Yanlin Ma WEBMASTERS Nima Negahban, Andrew LoCascio WEB DEVELOPER Amir Ghaheri FINANCE DIRECTOR/HUMAN RESOURCES Kenneth Cyrus ACCOUNTING ASSOCIATE Karen Francis OFFICE MANAGER Virginia Durso

Queens: Aggregate sales of

$365,472,000

23 Buildings / 1,102 Residential Units / 14 Commercial Units Long Island: Aggregate sales of

$24,500,000

1 Buildings / 176 Residential Units © Copyright 2015 Rosewood Realty Group. All rights reserved.

12 August 2015 www.TheRealDeal.com

CIRCULATION Paul Destanko DISTRIBUTION Mitchell Newman, Patricia Hofmann, Forero Express ATTORNEY Barry J. Friedberg, Trachtenberg Rodes & Friedberg LLP The Real Deal is a registered trademark of Korangy Publishing Inc. Copyright © 2015. To contact us, call 212-260-1332 or email 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 212260-1332. 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.

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. File No. CP14-0086.

Sponsor: 610 Lexington Property LLC, 390 Park Avenue, 3rd floor, New York, N.Y. 10022. Equal housing opportunity.

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EDITOR’S NOTE

maxed out micro-units

Real estate’s “Nixon in China” moment t’s the New York City real estate version of President Nixon visiting China, opening up East-West relations during his historic visit to the Communist country in the 1970s.

Maybe that’s a slightly lofty comparison, but that’s how excited we are about The Real Deal’s inaugural U.S. Real Estate Showcase & Forum in Shanghai next month.

And with good reason. The two-day expo is the first-ever showcase of U.S. properties in China’s largest city, with a focus on New York (of course), Miami and Los Angeles. More than 5,000 Chinese investors and wealthy homebuyers hungry for access to U.S. markets are expected for 10 panels on residential and commercial real estate.

And the delegation of speakers we’ve lined up are an impressive bunch: former Governor-turned-developer Eliot Spitzer, Greenland CEO Ifei Chang, Kuafu CEO Shang Dai, Andrew Farkas, Stan Gale, Bruce Mosler, Fredrik Eklund, Steve Witkoff, Miki Naftali, Andrew Heiberger, Jonathan Miller and Nicholas Mastroianni II of the U.S. Immigration Fund — to name just a few. In addition to that roster, we also have big-time developers and brokers from Miami and Los Angeles. Get more details about the event, which runs from Sept. 10 to 12, at TheRealDeal.com/Shanghai.

Of course, we planned the event because of the massive amount of investment coming into the U.S. from China.

To give you a sense of things, more than $10 billion left China last year to invest in real estate globally, with nearly $3 billion of it heading to New York. And the role of Chinese money in the real estate market here is only getting bigger. So getting educated and making connections are no longer a side hobby for those in the industry. A modern-day trade route is being built for the flow of capital, and its not too late to book a flight.

There are, of course, a slew of other major stories that we’ve been closely following.

As part of our never-ending mission to shine a light on the real estate industry (and

I

Photos: Dooley Images

A modern-day trade route is being built for the flow of capital between New York and China, and it’s not too late to book a flight.

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on the mechanics of how power and money in New York work), we’ve had some nice scoops in the past month or so on our website, that go beyond our China coverage.

We broke news on the biggest condo sale ever in the works in the city (for $250 million) at 220 Central Park South. We wrote a story about the Attorney General’s office and its ruling to limit access to public records, which they later overturned after our reporting. We also did a data dive debunking the conventional wisdom that nearly all purchases over $5 million involve a mortgage. And we had another firstever story tallying up the amount of super-wealthy buyers out there relative to the supply of super-pricey condos. Finally, we had a fun story that revealed how 432 Park — the tallest tower in the city — was modeled after a trash basket.

Those stories and others are being driven by our talented and expanding reporting staff, as well as by our growing research team (now at four people), which allows us to dive into records and data in new and more sophisticated ways. Look out for our new research section, which will be launching in the fall.

There is plenty to feast on in the issue, too.

Our cover story zeros in on the connection between art and real estate, looking at some of the biggest industry moguls with the largest collections. In a companion story, we look at how the art and real estate markets work in tandem as asset classes for the wealthy, and bear striking similarities. It makes sense: Just like there are only so many Rothkos or Basquiats, there are only so many views from 1,500 square feet in the air inside the supertall towers on “Billionaire’s Row” (see page 48).

We also take a look at New York’s heralded real estate dynasties working to stay relevant and reinvent themselves in the face of REITs and private equity money (go to page 32 to find out which one is looking to get into the medical marijuana business).

We also examine how effective social media is for the bottom line on page 36, surveying the residential firms leading the way on Facebook, Twitter, Instagram and LinkedIn. And finally, in the waning days of summer, we take a look at property in the small beachside town of Deal on the Jersey Shore, where more than one-third of the homes are owned by members of New York City real estate families. Deal is certainly the appropriate name.

Enjoy the rest of the summer. Will we see you in China?

969 Third Avenue @ 58th Street | New York, NY 10022 212.753.2039 | resourcefurniture.com New York | Los Angeles | San Francisco | Toronto | Vancouver | Calgary | Montreal | Mexico City 14 August 2015 www.TheRealDeal.com

Stuart Elliott

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WE ARE PLEDGED TO THE LETTER AND SPIRIT OF THE 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. THE SKETCHES, RENDERINGS, PICTURES AND ILLUSTRATIONS ARE PROPOSED ONLY AND THE DEVELOPER RESERVES THE RIGHT TO MODIFY, REVISE OR WITHDRAW ANY OR ALL OF THE SAME AT ITS SOLE DISCRETION WITHOUT NOTICE. THE RENDERINGS ILLUSTRATE AND DEPICT A LIFESTYLE, HOWEVER, AMENITIES, FEATURES AND SPECIFICATIONS ARE SUBJECT TO CHANGE WITHOUT NOTICE. ALL INFORMATION IS DEEMED RELIABLE BUT IS NOT GUARANTEED AND SHOULD BE INDEPENDENTLY VERIFIED. ALL REAL ESTATE ADVERTISED HEREIN IS SUBJECT TO THE US FEDERAL FAIR HOUSING ACT OF 1968 WHICH MAKES IT ILLEGAL TO MAKE OR PUBLISH ANY ADVERTISEMENT THAT INDICATES ANY PREFERENCE, LIMITATION, OR DISCRIMINATION BASED ON RACE, COLOR, RELIGION, SEX, HANDICAP, FAMILIAL STATUS, OR NATIONAL ORIGIN. PLEASE CHECK WITH YOUR LOCAL GOVERNMENT AGENCY FOR MORE INFORMATION. ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY STATING REPRESENTATIONS OF THE DEVELOPER. FOR CORRECT REPRESENTATIONS, MAKE REFERENCE TO THIS BROCHURE AND TO THE DOCUMENTS REQUIRED BY SECTION 718.503, FLORIDA STATUTES, TO BE FURNISHED BY A DEVELOPER TO A BUYER OR LESSEE. THIS IS NOT AN OFFER FOR CONTRACT OR SALE IN THE STATES OF NY, NJ OR MASS. THE STATEMENTS MADE CONCERNING THE TURNBERRY OCEAN CLUB DO NOT CONSTITUTE OFFERS TO SELL, OR A SOLICITATION OF AN OFFER TO BUY A UNIT IN THAT CONDOMINIUM. NO SOLICITATION, OFFER OR SALE OF A UNIT IN THE CONDOMINIUM WILL BE MADE IN ANY JURISDICTION IN WHICH SUCH ACTIVITY WOULD BE UNLAWFUL PRIOR TO REGISTRATION UNDER THE LAWS OF SUCH JURISDICTION. INITIATION FEE AND FIRST YEAR’S ANNUAL DUES AT TURNBERRY ISLE RESORT AND COUNTRY CLUB ARE PAID FOR BY THE DEVELOPER. BUYERS ARE RESPONSIBLE FOR ALL FEES BEGINNING YEAR TWO. MARKETING AND BRANDING BY TURNBERRY AND CONWAY+PARTNERS.

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RESIDENTIAL MARKET

Bid now, decide later More buyers bid (and win) apartments they donâ&#x20AC;&#x2122;t want, robbing sellers of a crucial debut period in a tight market Hybrid Marketing | Exclusive & Off-Market Sales

BY E.B. SOLOMONT all it a buyerâ&#x20AC;&#x2122;s security blanket.

Frustrated by a lack of inventory on the market in Manhattan and parts of Brooklyn, and, perhaps, burned by onetoo-many losses, some buyers are bidding on apartments that theyâ&#x20AC;&#x2122;re not entirely sure they even want. The idea: Win now, decide later.

Itâ&#x20AC;&#x2122;s not until an offer is actually accepted that these buyers are taking a good hard look at the fought-over property. At that point, some are deciding that the home is not a good ďŹ t for them, while others are getting scared off by the very fact that theyâ&#x20AC;&#x2122;ve won a bidding war and therefore might be overpaying. â&#x20AC;&#x153;Essentially, would-be purchasers are buying time instead of the apartment,â&#x20AC;? said Warburg Realtyâ&#x20AC;&#x2122;s Lisa Larson.

While this is not a new phenomenon â&#x20AC;&#x201D; New York has especially lax rules surrounding making offers on properties â&#x20AC;&#x201D; brokers say they have seen an increase in the last few months because inventory is so tight and so much of the new product coming online is high-end luxury with hefty price tags.

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Hoagland said buyers do it because theyâ&#x20AC;&#x2122;re tired of losing bidding wars. Timing is often a factor as well because many buyers have their own properties to sell or apartments they need to vacate. â&#x20AC;&#x153;Theyâ&#x20AC;&#x2122;re looking in parallel at multiple apartments because thereâ&#x20AC;&#x2122;s no ďŹ nancial commitment â&#x20AC;&#x201D; it doesnâ&#x20AC;&#x2122;t cost anything to put in an offer â&#x20AC;&#x201D; and theyâ&#x20AC;&#x2122;re putting in more offers than they have in the past,â&#x20AC;? she said. â&#x20AC;&#x153;Nothing is ever ďŹ nal in real estate.â&#x20AC;?

While the practice may frustrate sellers, an accepted offer isnâ&#x20AC;&#x2122;t binding until the contract is signed by both parties and a deposit delivered. Thatâ&#x20AC;&#x2122;s not the case in many other states, where offers must be submitted in writing and are legally binding once both parties sign. â&#x20AC;&#x153;For good or bad, it is the way New York law is set up,â&#x20AC;? said industry veteran Kathy Braddock, co-managing director of William Raveis NYC. â&#x20AC;&#x153;Having your offer accepted is nice, but youâ&#x20AC;&#x2122;re not at the ďŹ nish line.â&#x20AC;?

In New York, sellers may have three or four contracts out to see which buyer comes back ďŹ rst. Buyers, too, may bid on several

While this may seem like an innocent strategy to buyers who are simply trying to ďŹ nd a home in a tight marketplace, it can be seriously detrimental to a seller.

Larson recently represented the seller of an Upper East Side three-bedroom in the $2 million range. Sixty prospective buyers saw it within the ďŹ rst week, and eight submitted bids. But the winning couple backed out ďŹ ve days into the due-diligence period when the two could not agree on whether they both wanted the apartment.

While this may seem like an innocent strategy to buyers who are simply trying to ďŹ nd a home in a tight marketplace, it can be seriously detrimental to a seller.

Thatâ&#x20AC;&#x2122;s because, as Larson explained, a failed deal can cast a shadow on the property. â&#x20AC;&#x153;Youâ&#x20AC;&#x2122;re losing that important ďŹ rst week or two on the market when you have momentum building,â&#x20AC;? she said. â&#x20AC;&#x153;When thatâ&#x20AC;&#x2122;s gone, itâ&#x20AC;&#x2122;s hard to get it back.â&#x20AC;?

Karla Saladino, managing partner of Mirador Real Estate, a boutique ďŹ rm that works closely with developers and building owners, said the strategy has become so commonplace among buyers that sheâ&#x20AC;&#x2122;s come up with her own system to protect her sellers. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve been sending out more than one contract for my sellers, as it damages them to have it on market too long,â&#x20AC;? she said.

Compassâ&#x20AC;&#x2122; Julia Hoagland said the stakes are especially high in the $2 million-andunder category, where the inventory is tighter than ever and demand is especially strong. â&#x20AC;&#x153;Buyers end up bidding on properties they donâ&#x20AC;&#x2122;t necessarily even like, and thus are not committed to the property after they win,â&#x20AC;? she said.

properties. (However, the latter is less common, she noted, because most buyers arenâ&#x20AC;&#x2122;t going to pay a real estate lawyer to review separate contracts.)

Of course, backing out of deals is not universal.

Brown Harris Stevensâ&#x20AC;&#x2122; Greg Roache said he hasnâ&#x20AC;&#x2122;t seen many buyers with â&#x20AC;&#x153;buyerâ&#x20AC;&#x2122;s remorse,â&#x20AC;? though he and business partner Roger Gillen have noticed some buyers offering signiďŹ cantly more than the asking price in order to shut down requests for ďŹ nal (and best) bids.

While the phenomenon isnâ&#x20AC;&#x2122;t new, Roache said heâ&#x20AC;&#x2122;s seeing more buyers attempt to circumvent bidding wars because thereâ&#x20AC;&#x2122;s so little â&#x20AC;&#x153;affordableâ&#x20AC;? inventory coming onto the market.

For example, Roache said 50 people attended the ďŹ rst open house for one of their recent listings, a two-bedroom on East 79th Street that was asking $1.5 million. One buyer came back within hours and offered $1.5 million in cash â&#x20AC;&#x201D; contingent on the sellers agreeing not to shop the apartment to anyone else.

The deal was signed within three days. â&#x20AC;&#x153;They overpaid a little bit, but they didnâ&#x20AC;&#x2122;t want to risk [losing] yet another one,â&#x20AC;? said Roache, who tries to avoid having buyers back out of deals by insisting they return to see the property a second time before submitting a bid. â&#x20AC;&#x153;This way, you donâ&#x20AC;&#x2122;t accept an offer after [the buyer] was in a crowded apartment for 10 minutes,â&#x20AC;? he said. â&#x20AC;&#x153;If you bring everyone back in a second time ... thatâ&#x20AC;&#x2122;s where the serious people step up.â&#x20AC;? TRD www.TheRealDeal.com March 2010

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Playing both sides of the brokerage game Top residential brokers see up to one-third of their business coming from commercial sales

BY E.B. SOLOMONT hen Cheerland Investments plunked down $50 million for an Upper West Side parochial school last year, residential broker Austin Schuster of Sotheby’s International Realty found himself at the center of a decidedly commercial deal.

Cheerland, a Chinese developer, was originally a client of Sotheby’s colleague Nikki Field, whose team spent months scouring the city for investment deals. Through commercial brokers Bob Knakal and Hall Oster, then at the former Massey Knakal, Cheerland found 555 West End Avenue, the former St. Agnes Boys School, but the Chinese firm needed a development partner.

Enter Schuster.

At Field’s behest, he met with Cheerland with an eye toward matchmaking, and ultimately arranged a meeting with developer Cary Tamarkin. Cheerland and Tamarkin hit it off and are now partners on the Upper West Side condo conversion.

While Schuster said he has no plans to give up selling condos, co-ops and townhouses —the bread and butter of his business —he’s part of a cohort of

W

20 August 2015 www.TheRealDeal.com

residential agents who are also arranging deals involving investment properties, multi-family buildings and assemblages to developers clamoring for hard-to-find development sites.

of their buildings, it makes sense to me just to call them up and see if I can make a deal.”

Similarly, Douglas Elliman’s Michael Graves brokered north of $300 million worth of commercial real estate this year,

In a hot market, developers hungry for land are turning to residential agents to bring them off-market deals they learn about via their close ties in the neighborhoods they work in.

While residential agents have dabbled in commercial sales before, the allure is greater these days, because brokering a deal involving a development site can be a path to selling the finished project. In a hot market, developers hungry for land are turning to residential agents to bring them off-market deals they learn about via their close ties to investors in new development condos and other connections in the neighborhoods they work in.

A number of enterprising residential agents, therefore, are bypassing their commercial counterparts for a piece of the action. “As I see opportunities, rather than call a commercial broker, I’m calling 10 developers,” Schuster said. “I’ve sold in most

he said. And Nest Seekers International’s Ryan Serhant said he closed $100 million worth of commercial sales in 2014.

“When you work in the high-end residential market and the new development sector, your daily activities become intertwined with developers and investors and banks,” Graves said. “If you’re in the field as much as I am, we’re usually the first ones to know about a potential assemblage.”

Hungry for deals There’s no question that the scarcity of development sites, high residential prices and investors eager for deals are fueling residential agents’ forays into commercial brokerage.

“It’s a bigger game,” said the Corcoran Group’s Evan Forray Church, who works in Williamsburg and started going after commercial business when he saw the neighborhood begin to change amid the recession and rezoning of the waterfront in 2009. “It was a new, emerging market that I wanted to capitalize on,” he said.

Last year, his team sold $90 million worth of real estate, 30 percent of which was commercial.

Nest Seekers’ Serhant said that as agents vie for new development gigs, selling development sites is one way to prove your mettle, and hopefully end up selling the final product. “Why wait for a site to go into contract, then track down the developer and knock on their door? Why don’t I just start from ground zero?” he said.

Developers are hungry for a leg up in acquiring buildings or land, and they may turn to residential brokers who have their finger on the pulse of potential deals.

“We’re the middle man, if you will,” said Elliman’s John Gomes, who sold $1.1 billion worth of real estate last year with business partner Fredrick Eklund, Serhant’s co-star Continued on page 106

www.TheRealDeal.com March 2010

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BY

THE

NUMBERS

Rooftop reprieves Outdoor O utdoor sspace pace g goes oes ffrom rom exclusive tto ou biquitous exclusive ubiquitous as m as more ore llandlords andlords o open pen up rrooftops ooftops up

71 Number of permits projected to be

40-by-20-by-4 Dimensions (in feet) of the rooftop

filed in 2015 with the Department of Buildings containing the words “roof deck.” So far this year, 40 such permits were filed, already exceeding the 25 for 2014. Roof deck filings have steadily increased since 2009, the first year for which the DOB has data, when there were just eight.

pool at the McCarren Hotel in Williamsburg, the city’s only outdoor saltwater pool. For a more exclusive dip, of the classic freshwater-andchlorine variety, there’s the membersand-hotel-guests-only 15-by-32-foot heated pool on the roof of the Soho House. Members must submit headshots and career history, and pay $2,000 annually. Hotel guests can get in for as little as $500 a night. Celeb watchers can pay $250 for a “Daycation” pass at the Gansevoort Hotel in the Meatpacking District, and watch for the likes of Jay-Z, Katy Perry and Kim Kardashian.

38,000 sq. ft.

Total area of outdoor space planned for the Bjarke Ingels-designed Two World Trade Center. The 1,340-foottall building will be composed of seven 12-story boxes stacked irregularly on top of each other, creating a roughly 6,000 square foot slice of outdoor space on top of each.

A rendering of green rooftops in Manhattan

he streets of New York City can feel like an oven during the summer. For many, relief is found on the rooftops.

Today’s rooftop terraces, particularly those in new development buildings, are growing increasingly bigger and swankier, sporting everything from designer furniture to commissioned artwork to pools to spas — adding a coveted amenity for tenants and further padding developers’ pockets. But New Yorkers have been taking to their roofs for respite since at least the days when Teddy Roosevelt headed the NYPD. (A bit of rooftop trivia: Roosevelt controversially opened Central Park to the public at night, after a number of people fell from tenement rooftops while sleeping during a brutal heat wave.) And it’s not just residential buildings getting outdoor space today. Spurred in part by the demand for unconventional office space in the city’s nascent tech and creative industries, office-building landlords are adding or revamping previously ignored outdoor space on roofs, in courtyards and wherever else they can squeeze in a bench, table and umbrella. Hotels by the dozen have opened rooftop bars and lounges. And now even the biggest commercial projects, like Bjarke Ingels’ proposed Two World Trade Center, are incorporating green space. Perhaps with a cold drink in hand, sitting on your office rooftop, read on for a NYC rooftop (and other outdoor space) rundown. rooft ofttop pool pool a the McCarren Mc arr McC a en e Hot Hotel e el. el The ro rooftop att the Hotel.

By Ariel Stulberg

T

“Su “Sunset,” S nse Su s t,” se t br t, brigh brightly igh ghtly tly co c colored lor ored e cha ed chairs ha airs byy artist Heilman, display art rtist ist st Ma Mary ry Hei He lma man n, iss on n, n dis spla playy iin n tthe he Whitney’s W tne Wh Whi tney’s yy’ss largest la arge rgest s outdoor st out uttdoo d r gallery. gall all ery ery..

13,000 Square footage of outdoor exhibition space and terraces at the new Whitney Museum in the Meatpacking District.

The 50,000-square-foot museum also has an 8,500-square-foot outdoor entry plaza.

4.5 acres The size of the so-called “Public Square” at Hudson Yards, which will nominally function as a garden, but actually serve as the roof of the rail yard below it. Probably safe to assume that it will be the city’s biggest rooftop.

3,200 sq. ft.

Size of a terrace at 655 Park Avenue — one of the largest private terraces in the city. The space, featured in the 2011 book “Rooftop Gardens” by real estate heir Denise LeFrak Calicchio, is large enough for the unit’s owners to entertain 100 guests. For comparison, a $22 million, 5,723-square-foot unit overlooking the High Line, billed as the priciest apartment in the area, boasts a terrace of just 899 square feet.

18 Number of films to be shown this month at the New York Rooftop Film Club, on the terrace of the Midtown Yotel, including “Blade Runner,” “Dirty Dancing,” and “Top Gun.” The Death Ave bar in Chelsea, one of only a handful of spots in the city that still hosts rooftop screenings, will show five movies, including “Midnight Cowboy,” “Vertigo” and “Roman Holiday.”

$100,000 The maximum tax break a building in New York City can receive through the state’s Green Roof tax abatement program. In order to qualify, at least 50% of the building’s roof must be covered in a “vegetation layer,” at least 80% of which must be covered with live plants.

50,000 Pounds of organically grown vegetables harvested annually on 2.5 combined acres at two rooftop farms — one at the Brooklyn Navy Yard, the other in Long Island City — operated

by Brooklyn Grange, a rooftop farming business. The group also operates 30 bee hives, each on a different roof throughout the city.

Sources: Wired, New York Times, Time Out New York, Curbed, Brick Underground and TRD reporting.

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Ranked the #1 Sales Team in 2014 www.NikkiField.com ALEXANDRA WHITE Licensed Salesperson 212.606.7624 | alex.white@sothebyshomes.com ZOE MORGAN HAYDOCK Licensed Salesperson 212.606.7727 | zoe.haydock@sothebyshomes.com

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

22 August 2015 www.TheRealDeal.com

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SHERWIN BELKIN herwin Belkin, one of the founding partners of the Manhattan-based law firm Belkin Burden Wenig & Goldman, is one of the city’s foremost real estate attorneys and an expert on rent regulation issues. He has represented landlords in rent-regulation disputes for almost three decades and handled thousands of cases. And it hasn’t gotten easier over time. The new rent law, enacted in June, is “the most dense, the most confusing” of any version of the legislation, he said. Belkin — a lifelong New Yorker who went to Brooklyn College and Brooklyn Law School — co-founded his current firm 26 years ago, with the three other named partners. The firm now employees a total of 100 people, including 48 attorneys. In addition to rent regulation disputes, Belkin also advises owners on assemblage deals. Among his most notable was the site where 15 Central Park West now stands. In that case, he helped the Zeckendorf brothers, who developed the condo, relocate the last inhabitants of the Mayflower Hotel, previously located on the spot. Belkin, 63, also negotiated a settlement when the 1,400-unit Waterside Plaza complex at East 26th Street and the FDR Drive converted to market rate from a Mitchell Lama complex in the early 2000s.

S

But despite his experience, he’s a kid at heart. By Claire Moses

GOLDEN RETRIEVERS

WOODY

FOOTBALL PLAYER SCULPTURE

Belkin has had golden retrievers for more than 20 years. Pictures

Belkin and his wife met when they were

of his two late dogs, Gracie and George, as well as his current dog,

counselors at Wel-Met Camp in upstate New

In his (limited) free time, Belkin fancies himself an artist. He sculpted

Lucy, adorn the walls of his office. “Once you’ve had a Golden, you

York in 1972. In the first few days, someone

this bust of a football player about 15 years ago. “I just decided I

can’t go back,” he said. His

mistook his name as “Sherwood,” which

wanted to make a cartoonish football player,” said Belkin, a long-time

wife and George formed

quickly evolved into “Woody.” His wife

fan of animated movies and cartoons.

a therapy team. They’d

still calls him that. And both Woody

When he had his two daughters, Beth

go to hospitals and visit

Woodpecker and Woody from “Toy

and Laura, both in their 30s, he was

patients. George even had

Story” are in “Woody’s” office today.

excited to finally be able to watch

his own business cards.

those movies on the big screen again.

“I couldn’t go as a 6-foot-4

ORANGE CARTON LABELS

BASEBALL Among the multiple baseballs in Belkin’s office, this one is particularly special. In

Some people collect stamps,

April 1980, his wife Mary caught it at one

others collect train sets. Belkin

of the first Yankees games she ever attended.

has a collection of 40 or 50 orange

The Bombers beat the Orioles 3-2 that day,

and grapefruit carton labels, all

according to the writing on the baseball.

from California. He bought his first, a framed carton label at a flea market in California while on

YANKEE STADIUM CHAIR A wooden seat from the original Yankee Stadium sits in the corner

his honeymoon in 1977. This one in his office appropriately depicts Lady Justice.

guy by myself,” he said.

‘SEINFELD’ Belkin bought this Jerry Seinfeld marionette at a fair years ago. “All Western knowledge can be known by watching ‘Seinfeld’ and ‘Godfather I’ and ‘Godfather II,’” Belkin joked. A little Chrysler Building figurine — Belkin’s favorite New York City landmark — with a cutout photo of the show’s character Elaine attached to it, joins the Jerry doll on his shelf.

of Belkin’s office. Belkin’s wife bought the artifact when the stadium was remodeled in the mid-1970s. Belkin, a diehard Yankee fan, penned a number

ACTION FIGURES

“7” on the side of the

Belkin’s younger daughter,

chair in honor of

Beth, gave him these

his favorite player,

action figures from the

Mickey Mantle. That

2004 movie “Napoleon

first, Belkin is a self-proclaimed “baby at heart,” who loves wind-

may have devalued

Dynamite.”

When

up toys so much that they’ve become a go-to gift from family. His

it on the sports

Belkin saw the movie for

daughters have given most of the toys to him over the years. He also

memorabilia market,

the first time, “I didn’t

has a (now broken) lawyer doll that used to be able to utter phrases

but Belkin has no

laugh once,” he said. But,

such as “I object!” and “Pay your bill!” (a present from a client), as well

intention of selling.

“since then, I’ve become

as a tiny monkey, a car and more.

WIND-UP TOYS Although his height and demeanor doesn’t give it away at

addicted.”

24 August 2015 www.TheRealDeal.com

PHOTOGRAPH OF SHERWIN BELKIN FOR THE REAL DEAL BY MAX DWORKIN

© 2015. DOUGLAS ELLIMAN REAL ESTATE. EQUAL HOUSING OPPORTUNITY.

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CMBS borrowing jumps sharply Half of the top 10 commercial loans over the past year have been securitized

BY ADAM PINCUS op commercial owners on the hunt for low-cost financing are increasingly turning to the more restrictive terms of securitized loans over more flexible options, fueling a sharp rise in commercial mortgage-backed securities lending over the past year.

Companies such as Tishman Speyer and Saks Fifth Avenue parent Hudson’s Bay Co. are returning in force to CMBS loans, leading to a 34 percent increase in such borrowing in New York City during the 12 months ended June 30, to $13.6 billion.

Still, five of the top 10 loans were non-CMBS. Landlords such as General Growth Properties, investor Jeff Sutton and Vornado Realty Trust chose instead to borrow from a bank or life insurance company that will hold the loans on their books, or sell pieces to other lenders.

The Real Deal reviewed the top 10 financing deals issued over the past year,

T

26 August 2015 www.TheRealDeal.com

compiled by real estate debt-tracking firm CrediFi. The securitized loan data firm Trepp identified the CMBS loans among them. (See related chart on page 106.)

Among the top 10, the five CMBS deals totaled $5.2 billion. The others, which totaled $4.8 billion, were a combination of balance sheet, syndicated loans and one life insurance company-backed deal.

York and New Jersey and New York Liberty Development, an arm of the Empire State Development Corp., issued the bonds in October on behalf of Larry Silverstein’s Silverstein Properties.

Some of the large loans on the list do not reflect the total amount of debt the owner took on for specific properties. For example, General Growth and Sutton

Among the top 10 loans, CMBS represented $5.2 billion, while banks and other traditional sources totaled $4.8 billion.

The banks and originators were the typical players in the commercial real estate space, including the German lender Deutsche Bank and Bank of America.

The largest deal was a $1.59 billion bond offering to refinance loans on 3 World Trade Center. The Port Authority of New

borrowed a total of $1.25 billion from Deutsche Bank in April for the acquisition of 730 Fifth Avenue, but only $1 billion was secured and included in the top 10.

Deutsche Bank sold off the other $250 million as mezzanine debt, which is a type of debt that carries a higher interest rate

and is less secure than a first mortgage.

Absent from the list were some foreign banks that have been active in construction or other sectors, but not in the largest loans in New York, for example the Bank of China.

“Foreign banks are still active,” said Ronnie Levine, senior managing director of commercial brokerage Meridian Capital Group. But he said they are more focused in construction lending.

“It could be after several years of large lending, their strategy shifted to spreading risk over more properties with smaller financing deals,” said Clayton Rifkind, head of marketing for CrediFi. Not all the lenders were banks or CMBS bond holders. Insurer American International Group originated a $785 million acquisition loan, given to RXR Realty for the purchase of Midtown tower 230 Park Avenue on May 5.

Continued on page 106

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In their words...

The funniest and most insightful comments on real estate

“The Greek crisis is a pimple on an elephant.”

John Ca Catsimatidis, former mayoral candidate and own owner of Red Apple Group, on the potential impact of the financial crisis in his ancestral l land on New York real estate.

“People who buy $90 million penthouse apartments don’t want to feel like they’re in a boat.”

“I think you probably couldn’t find a more difficult place in the world to build a 1,300-foot tower.”

Starchitect Bjarke Ingels, on the number of complications involved in building 2 World Trade Center.

“I think it’s an unfair, inappropriate position for the Department of Finance to say to people who invest in real estate, ‘Gotcha.’”

Real estate attorney Jay Neveloff, on the new disclosure rules requiring the names of real estate buyers and sellers behind LLCs to be released to the city.

28 August 2015 www.TheRealDeal.com

Engineer Stephen DeSimone, on the challenge of reducing wind sway for supertall towers.

“Think about it: Two guys from the Middle East are “It’s important to not coming to an American company and offering to issue confuse Brooklyn with Times Square.” bonds [from] far Bruce Ford of research firm Lodging away. It sounds like Econometrics, on concerns about oversaturation regarding the record number science fiction.” of hotels being built in Brooklyn.

Rafael Lipa of Victory Consulting, on the growth of New York real estate firms using the Israeli bond market to raise financing.

“It’s straightforward, it makes sense and they feel like there’s no hocus-pocus, no voodoo, where one day it’s going to disappear like some of the financial instruments that they are pitched.”

David Gross, business manager for the Miami Heat’s Luol Deng, on the appeal of real estate as an investment for NBA players, at a symposium organized by the players’ union.

“I believe that a company producing $18 billion annually should yield more than a conventional approach to doing things.”

Compass broker Aaron Seawood, in an email explaining why he left Corcoran.

Sources: Capital NY, Crain’s, Bloomberg and TRD reporting.

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NEW JERSEY

Mapping out just how many properties NYC’s Syrian Jewish real estate moguls own in this Jersey Shore hamlet

Dominating Deal

Where each family owns Jemal Cayre Gindi Chehebar

NJ

Adjmi Nakash

BY ARIEL STULBERG t’s no new flash in this industry that the tiny Jersey Shore hamlet of Deal is a magnet for Syrian Jewish real estate moguls. But just how much of Deal they actually own might surprise you.

Tawil

I

Sutton Ashkenazy Sitt Chera Cohen

The so-called “SY” community, as Brooklyn-based Syrian Jews are sometimes called, has a near-lock on high-end property in the town. That’s especially true along the oceanfront, where a handful of powerful real estate families have set up side-byside family compounds.

But these are not your average neighbors. In New York City they own billions of dollars worth of real estate and are investors in major deals from Times Square to Soho to Downtown Brooklyn.

This month, as many of these moguls spend the dog days of summer in their second (or third) homes at the Shore, The Real Deal took on the decidedly less-relaxing task of paging through hundreds of public documents to find out just how many properties this powerful group owns in this otherwise low-key, 1.2-square-mile Monmouth County town.

What we found was property rolls that read like a who’s who of this sector of the real estate world: Sutton, Sitt, Adjmi, Cayre, Nakash and many others.

In a town with a year-round population of roughly 735 people, 290 properties — nearly a third of the 952 total in the town — were recorded under these familiar names. Many prominent SYs own multiple properties, some families hold more than a dozen. It’s unclear, however, whether those are occupied by siblings, cousins, aunts, uncles and oth-

Sutton Retail magnate Jeff Sutton, whose net worth Forbes pegged at $3.2 billion, owns one of Deal’s largest estates, in addition to the more than 100 New York City properties that city records show his company

Retail magnate Jeff Sutton plans to demolish the 9,196-square-foot oceanfront house he purchased in 2012 for $22.6 million and rebuild.

30 August 2015 www.TheRealDeal.com

Nearly a third of the properties in the New Jersey town of Deal are owned by New York City real estate families.

Source: Deal Borough property records.

er relatives, or held as investment properties, but Deal properties available for summer rentals seem to be a rarity on popular Jersey Shore listing sites.

TRD also had some fun with the data program Excel and Google Earth to find out what the deal is in Deal. The results, which are plotted on the accompanying map, show what appear to be a number of sprawling family retreats. Rather than the high, manicured hedges that separate estates in the Hamptons, some of these compounds have what look like communal amenities, from baseball diamonds to tennis courts to swimming pools.

So why Deal — other than its very apropos name?

One source said three key factors prompted Sephardic Jewish families from Brooklyn — many of Syrian origin and working in the garment and retail industries — to buy in Deal in the late 1960s and early 1970s. They were: low taxes, a synagogue and the Deal Casino, which was actually not a casino, but a beach club restricted to Deal residents. (The Deal Casino still exists, but is no longer limited to town residents, though membership is still required.)

Not surprisingly, the notoriously private community didn’t want to discuss their summer homes. But piecing together property records offers some fun snapshots of some of the most prominent property SY owners there.

Wharton Properties holds. Sutton purchased 91 Ocean Avenue in 2012 for $22.6 million, along with the adjacent plot at 93 Ocean Avenue. The 9,196-square-foot house sits on 7.4 acres, and has 350 feet of beachfront. Sutton plans to demolish the building and construct a larger home set farther back from the beach. Property records show that Sutton, who started his career finding retail space for the discount shoe store Payless, also owns a sprawling compound on Roosevelt Avenue, along with a penthouse apartment in nearby Long Branch. In total, owners with the last name Sutton own 22 Deal properties.

At his waterfront estate, Sutton counts fellow real estate moguls Joseph Sitt and Steve Chera as neighbors.

Sitt Joe Sitt — CEO of Thor Equities, co-owner of Town Residential and founder of the Ashley Stewart clothing store

Joe Sitt of Thor Equities owns a beachfront estate, left, that is close by Jeff Sutton’s waterfront manse, right.

A third party owns the home in between.

— owns 71 Ocean Avenue, just up the beach from Sutton.

The three-story beachfront Continued on page 104

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DYNASTIES

FOR FAMILY DYNASTIES: ADAPT OR DIE

Real estate families are shaking up strategies and battling forces, like REITs and private equity, to stay competitive

From left: Jerry Speyer, Douglas Durst, Bill Rudin and Tony Malkin

BY KONRAD PUTZIER amily real estate dynasties — from the Rockefellers to the Zeckendorfs — have been building up the Manhattan skyline since the days of John Jacob Astor back in 1799.

But in the past few decades family firms have lost their dominant stature in the industry.

Over the past five years, the biggest commercial investors in New York City real estate have been SL Green Realty and Vornado Realty Trust — both publicly traded real estate investment trusts.

And mega private equity firms, like the Blackstone Group, have been aggressively buying up buildings, to boot.

Faced with these aggressive rivals, family firms have shed significant market share.

“You have to change or adapt, or else you don’t survive,” said Bill Rudin, CEO

F

32 August 2015 www.TheRealDeal.com

of Rudin Management, a third-generation family company.

This month, The Real Deal looked at how four storied New York City family real estate dynasties — the Rudins, Dursts, Speyers and Malkins — are doing just that.

The families, which all own major Manhattan real estate portfolios, stand out for one key reason: they have radically changed their strategies to compete.

strategies to stay in the game.

Unlike many of their family firm counterparts, they are adapting aggressively to the 21st century, rather than simply sitting on assets amassed years ago.

Are dynasties doomed?

In his 1997 book “The Visible Hand,” the leading U.S. business historian Alfred Chandler argued that public companies led by professional managers would drive

How four storied family real estate dynasties have radically changed their strategies in the 21st century.

They are venturing into new markets (whether in Queens or China), they are teaming up with tech tenants, going public and coming up with other novel

real estate growth and eventually push owner-operated firms out of the market.

While that hasn’t fully happened yet, many still subscribe to his view that it will.

Even Anthony Malkin, head of Empire State Realty Trust and himself the scion of a real estate dynasty, believes that the family business model is doomed.

The main problem, he said, is the potential for competing interests and disputes among the heirs, especially at smaller family firms.

“The very, very big [family companies] have the balance sheets to continue to be able to support varying family desires for a long time,” he said. “But there are many families which have smaller portfolios, and where the number of offspring to family assets is getting really damn big. That poses real problems for a lot of people.”

Malkin went on to say, “these smaller players are challenged to enter the 21st century.”

That may be because disputes within family companies are often far more destructive than within public firms.

ILLUSTRATION BY NOAH PATRICK PFARR

DYNASTIES “When families work well together, it’s a very, very powerful tool. Conversely, when it’s not working, on an emotional basis it’s even worse because you’re dealing with all those personal issues,” said Kent Swig, head of both the development and investment firm Swig Equities and the brokerage and property management umbrella Terra Holdings, and a principal at his family’s California-based real estate firm Swig Company.

The Ring Brothers — whose portfolio of Midtown South office buildings languished for years while the brothers refused to speak to each other — is a case in point. The portfolio sat in disrepair and was partially vacant for years, until Gary Barnett’s Extell Development Company

And in many cases, family ties can improve a company’s performance.

A 2014 study by consulting firm McKinsey & Company found that family firms tend to exhibit a higher level of “emotional ownership.” That, the study said, helps explain why they score better than other companies on key indicators of “long-term corporate health.”

Below is a look at how these four leading real estate dynasties are battling the forces and adapting to the changing market.

Rudin Management On September 22, 1989, real estate moguls Lew Rudin, Leonard Stern and Robert Tisch played a game of Monopoly

“It’s more of a risk, sitting back and just letting the company become stagnant.

Getting comfortable is very easy to do.”

MICHAEL RUDIN, RUDIN MANAGEMENT took control of most of the properties in 2013 and then flipped several of them.

Family companies can also be at a financial disadvantage.

“REITs have access to cheap debt because they can borrow on corporate lines,” said David

at a charity breakfast held at the Regency Hotel in Midtown.

Halfway through the game, word was that Rudin was losing. But when the Lew cash was counted at the end Rudin of the game — which also included Paul Goldberger, then the architecture critic for the New

York Times, as well as comedian Eyzenberg, a principal at Avison Jackie Mason — Rudin had Young’s capital markets group. won handily.

Large public companies As he explained to reportlike Vornado, for example, Bill Rudin ers, his strategy was to invest can borrow against their conservatively and save his entire balance sheet, he money so that he could scoop explained. That usually allows up more valuable real estate later. them to lock in lower interest rates, The anecdote, recounted which gives them a financial in Tom Schachtman’s book advantage.

“Skyscraper Dreams,” is While the combination emblematic of how Rudin of these dynamics often Management has been run make it harder for family Michael for the past few decades: companies to compete, it Rudin cautiously, and with an eye on hasn’t pushed them out of the the very long term. market. And family companies The family company, founded have other inherent advantages:

by Lew’s father Sam in 1924, perhaps the biggest is their held its properties for decades ability to pursue long-term and almost never ventured investments. beyond Manhattan.

“We don’t have to focus For the decade following on quarterly results and can Lew’s 2001 death, the cominvest on a long-term basis,” Samantha Rudin pany did not develop any major said Michael Rudin, Bill’s son projects. and a vice president at the family But today, things are very different. company. “If we make a mistake, or our timing was off, we don’t have to worry Bill, Lew’s son and company CEO, has transformed the firm into one of New about those things on a daily basis.”

Swig explained that the Swig Company York’s more active developers again. is currently netting rents in excess of $100 (Lew’s brother Jack is the firm’s chairman, per square foot at the Grace Building at 1114 while Jack’s son Eric is company Sixth Avenue, which the family company president.)

The company is re-developing 110 Wall bought in the 1970s. Funds, he said, “don’t have that patience” because they are often Street in Lower Manhattan and teaming up with Boston Properties to develop a mandated to sell after a few years.

675,000-square-foot office building in the Brooklyn Navy Yard to be anchored by the office-sharing company WeWork.

The WeWork building is Rudin’s first-ever project outside of Manhattan.

Meanwhile, the company is developing its first condo project in decades: Greenwich Lane, where prices go as high as $45 million. It has also launched a real estate tech venture, Di-BOSS (short for Digital Building Operating System).

In other words, the attendees of that monopoly game would have a hard time recognizing today’s Rudin Management.

Still, Rudin stresses that the firm began investing in technology under his father.

“In 1995, we created 1.0, the flexible work environment at 55 Broad Street,” he recalled. The company wired the office building with broadband access, and made a conference center available to all tenants. But leases still had traditional terms. “Flash forward to 20 years later, Adam [Neumann] and WeWork come along and create — I don’t call it 2.0, I call it 10.0,” he added, referring to WeWork’s co-founder. “They took what we did 20 years ago and refined it.”

Rudin has become one of WeWork’s most crucial backers, not only as a landlord, but also as a company investor.

The Rudins are equally bullish on DiBOSS, which acts as an operating system

we’re doing,” said Michael, whose sister Samantha is also a vice president at the company. “Getting comfortable is very easy to do, but fortunately we’ve steered clear of that.”

Durst Organization Donald Trump aside, the Dursts have been in the headlines more lately than just about any other family real estate dynasty in New York.

Between the completion of One World Trade Center, the high-profile Bjarke Ingels-designed pyramid building on the Far West Side and the controversial HBO TV series “The Jinx” — about family outcast Robert Durst’s alleged involvement in a string of murders — the company has a lot on its plate.

And behind the scenes, the firm is just as busy, quietly adapting its strategy in surprising ways.

While the family firm hasn’t changed its organizational structure (Douglas’ children Alexander and Helena are both company executives), it’s continuing its cutting-edge focus on environmentally sustainable development, venturing outside of Manhattan and also taking on green projects of another sort.

The firm is also making progress on its first outer-borough project — the $1.5 billion mixed-use Hallets Point mega-

The Durst Organization is working on its first outer-borough project, the $1.5 billion mixed-use Hallets Point mega-development in Astoria, and looking to get into the medicinal marijuana business. development in Astoria — where for buildings by automating it bought the last needed parcel tasks like counting turnstiles’ of land earlier this year. rotations and managing Douglas Company Chairman heat and air-conditioning.

Durst Douglas Durst said the new The firm began piloting the Queens focus is an intensystem — which it developed tional shift — an outgrowth in collaboration with of the belief that Manhattan Columbia University’s Center for doesn’t need more office space.

Computational Learning Systems “It’s the type of project we and the Italian technology like, where we are developing company Selex ES — in its a neighborhood,” Durst told own buildings in 2013.

TRD. “It allows us, because Michael Rudin said the of its size and scope, to bring system is up and running in innovative technology to our 10 of the company’s 16 office Alexander Durst development.” buildings and has reduced The Hallets Point project will energy consumption by up to 9 indeed feature environmentally percent. sustainable technology, such Rudin is running Di-BOSS as a co-generation power as a separate company, and plant, which produces heat hopes to eventually sell the Helena and energy, and a blacksystem to other landlords.

Durst water system that recycles “It’s more of a risk, sitting waste water. back and just letting the In addition, the firm is getting company become stagnant. We into the medical marijuana business. are always trying to improve on what www.TheRealDeal.com August 2015 33

DYNASTIES The Durst Organization and the Greater New York Hospital Association have jointly applied for one of five licenses being granted by New York State.

Durst — who insists on using the term ‘cannabis’ instead of marijuana — had little to say on the new venture, pointing to the ongoing bidding process. (Winners were scheduled to be announced at press time.)

But he did disclose that he hopes to grow the plants on the grounds of his 600-acre family-owned farm in upstate New York.

Durst said the company considered becoming a real estate investment trust in the early 1990s, but decided that there were more drawbacks than benefits.

“Going public would very much interfere with how we operate, how we make decisions,” Durst said.

Plus, he added that the lowcost capital that REITs often secure wasn’t really a draw for him. “We’ve never had a problem raising capital,” he said. “We have a credit line Robert with Citibank that we’re very Speyer happy with.”

Being a private company free from the pressure to produce immediate returns for shareholders has its benefits, he said.

“We build for the next generation. It’s the company culture, and we can build for low returns, knowing it will pay off for my grandchildren,” he told TRD.

Tishman Speyer Although the Tishmans have been leading players in New York real estate since the early 20th century, Tishman Speyer in its current form was only founded in 1978 by Jerry Speyer and his father-in-law, Robert Tishman.

The company — which is co-headed by the father-son duo of Jerry and Rob Speyer

— partnered with the asset management firm BlackRock to buy the massive housing complex StuyTown on Manhattan’s East Side for $5.4 billion, but it famously defaulted on its loans in the wake of the housing crisis.

Undeterred, and with its reputation seemingly untainted, Tishman Speyer has pursued several ambitious projects in the current market cycle, and doubled down on the Far West Side, which, while in the midst of a massive transformation, is still a largely untested location.

Last year, it bought a development site near Hudson Yards at 435 Tenth Avenue, between 34th and 35th streets, for $438 million and is now planning a $3 billion mixeduse tower on the parcel. And this June, Tishman Speyer bought another nearby site on 11th Avenue for $185 million. The two sites could hold Tishman Speyer’s first new construction projects in New York since the Hearst Building at 300 West 57th Street, which it completed in 2006 and still owns.

“I think that they have clearly shown that they are active at the top of the market and that they are constantly adapting to a changing marketplace,” said Bob Knakal, chairman of Jerry New York investment sales Speyer at Cushman & Wakefield, who brokered Tishman Speyer’s first Hudson Yards purchase.

Knakal pointed to the company’s investments in China to highlight its adaptability.

The firm has been ahead Robert Tishman of that curve, entering that market in 2006. As of 2014, it had invested at least $3 billion in China, according to the Wall Street Journal — although it’s unclear how much of that money came from outside investors and partners.

For a family company, Tishman Speyer has a remarkable appetite for risk, cushioned by institutional equity partners that it has relied on for much of its funding.

— was one of two main successor firms to Tishman Realty and Construction, which was founded in 1898 and liquidated in 1977.

The other was Tishman Construction, which Daniel Tishman sold to the global firm AECOM in 2010.

For a family company, Tishman Speyer has a remarkable appetite for risk, cushioned by institutional equity partners that it has relied on for much of its funding.

In 2006, the company — which, according to its website, has a $73 billion portfolio, including Rockefeller Center 34 August 2015 www.TheRealDeal.com

Among other sites, Tishman Speyer is building a mixed-use project known as the Springs in Shanghai. The 9.7-millionsquare-foot development, which is under construction, will include sports company Nike’s new, 600,000-square-foot China headquarters.

Much like its bet on the heated Manhattan office market, the company’s activity in China comes with huge potential returns, but also with risk.

In a recent report, brokerage and advisory firm JLL noted that the Chinese of-

fice market in major cities faces the risk of oversupply.

“The days of ‘build it, and they will come,’ are starting to fade,” the report said. The company declined to comment.

Empire State Realty Trust The Malkins, whose most famous asset is the Empire State Building, have arguably undergone the greatest transPeter formation among New York’s Malkin leading real estate dynasties.

Five years ago, Peter Malkin and his son Anthony were sitting at the helm of an aging portfolio of Class-B office buildings, managed under a fractured ownership structure dating Anthony Malkin to the 1960s.

Today, the company is no longer a family firm in the strictest sense. It’s a publicly listed REIT that’s investing heavily in renovating its buildings and attracting tech tenants.

But turning Malkin Holdings into a REIT has not been hassle free.

In several lawsuits, investors in the Empire State Building claimed that the Malkins violated their fiduciary duty by not selling the tower separately from the rest of the portfolio — which they claim would have achieved a higher price.

By Malkin’s own admission, the company paid more than $50 million in settlements, although he’s still adamant that the suits were baseless.

Somewhat lost in all the brouhaha over Malkin Holdings’ IPO are the tremendous investments the firm has undertaken to modernize its office portfolio.

It spent $550 million on renovating the 2.9-millionsquare-foot Empire State Building, turning it from a run-down haven for small garment firms into a LEEDcertified office tower that now counts tech firm LinkedIn as one of its biggest tenants.

Five years ago, the Malkins were sitting at the helm of an aging portfolio of Class-B office buildings.

Today, the company is a publicly listed REIT that’s investing heavily in renovating its buildings and attracting tech tenants.

Empire State Realty Trust, as the REIT is called, is the only outlier when it comes to employing kin: Malkin, who has two sons, claims to be the only family member on payroll.

While going public was seemingly radical, the younger Malkin, company chairman and CEO, told TRD it was largely inevitable.

“It wasn’t an easily continuable path of operation,” he said, speaking of the family firm’s structure. “It would have been difficult to run the business going forward.”

In a way, Malkin Holdings has long had some of the hallmarks of a public company.

Back in the 1960s and ’70s, Harry Helmsley and Lawrence Wien (Anthony Malkin’s maternal grandfather), amassed a huge Manhattan portfolio through syndication, or relying on hundreds of small-time investors to chip in cash for equity stakes. This complicated, fractured ownership model continued for decades, and Malkin said that turning the firm into a REIT greatly simplified things.

“As a private company we had 24 individual master entities of ownership and dozens of sub-groups,” he said. “From the moment of getting a unified balance sheet, we are instantly in better position.”

Across the REIT’s portfolio, which includes nine office buildings in Manhattan as well as six more in Fairfield and Westchester counties, so-called TAMI firms (technology, advertising, media and information) now occupy 8 percent of the office space, according to Malkin.

Unlike the Rudins, however, Malkin is slightly cool on WeWork and other shared office providers.

At a recent conference, he said he “won’t lease to WeWork” and is “insulating” the REIT from tenants who deal in short-term office rentals.

Malkin argues that WeWork depends disproportionately on startups, many of whom will fail. “To me, aggregating these cash flows and bringing them into your building as a tenant through WeWork is inherently taking a lot of venture-capital level risk just to get rent,” he said.

Malkin is similarly cautious when it comes to acquisitions.

The REIT, he said, will look to grow primarily by investing in its existing properties as a way to increase rental income — not by going on a buying spree.

“We also believe in cycles,” he said.

“There’s a time and place to do things, and there’s a time to put the crayons down.” TRD

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SOCIAL MEDIA

«

SATURATING SOCIAL

Residential firms are flooding social media, but how effective is posting photos and tweeting to the bottom line?

BY E.B. SOLOMONT he day after mega brokerage Douglas Elliman launched its new 300-plus-page magazine this spring, its top executives and brokers took to social media.

Top producer Frances Katzen posted a photo of herself with boot-clad feet propped up on her desk holding the tome, which featured supermodel Naomi Campbell on its cover. Meanwhile, Hamptons broker Jessica Cohen shared a shot of herself reading her copy poolside with her dog in hand. And company Chairman Howard

T

36 August 2015 www.TheRealDeal.com

Lorber took his magazine to New York City’s streets, where he posed with Jason Binn, founder of DuJour Media, and socialite Cornelia Guest, who were sitting in a cherry-red convertible. Over the next week, the hashtag #Ellimanmag generated half a million posts, achieving the holy grail of social media: a viral campaign.

But those viral campaigns are few and far between for most firms. And while everyday social media may now be an integral (and mandatory) part of every New York City firm’s business strategy, there is still a very large question mark

surrounding how effective it actually is.

Not only is it a fast-changing and crowded space, but brokerages are also clamoring to be heard in what can be a fleeting medium. Post a photo and seconds later it’s buried under another post. Tweet a teaser of a new listing and the same thing happens.

“A lot of your stuff will be that tree falling in the forest,” said Matt Leone, Halstead Property’s senior vice president of digital marketing.

But since The Real Deal last closely ex-

social media in 2014, a lot has changed — from how firms are spending their social media dollars to how they are analyzing the effectiveness of their strategies.

These days, the savviest players are looking at massive piles of data to shape and continuously tweak their message.

To get a sense of how they are doing, TRD did a deep-dive into some of those metrics (see charts).

What we found is not shocking, but is critical — it’s not enough to simply amass followers. Engaging them is the key. “It’s

amined how residential firms are using

a very noisy space and you’re competing

SOCIAL MEDIA more important,” said Compass’ Scherlag, who helped organize the firm’s Social Media Week at the end of last month that included workshops for its brokers and a panel discussion.

Scherlag said Facebook’s algorithm — which is largely kept secret — puts brand pages at a disadvantage to avoid inundating users with ads. Without paid advertising, therefore, less than 10 percent of a company’s audience will see a given post. That’s where paid ads come in, she said.

Businesses can pay Facebook to boost individual posts, or they can invest in “Page Like” ads that appear on the side of the screen and invite users to like or follow the brand’s page.

“We think it’s worth it to target the audience that’s interested in us,” Scherlag said.

To do that, brokerages have tapped a variety of companies for help.

Platinum Properties, for example, uses a New York City-based consulting company called Socialike.

Elliman’s social media agency, Rain, culls content from the web and works with an in-house team on strategy. The mega brokerage recently began working with L2 — a consulting firm founded in 2010

Profitable posts The experience of Manhattan-based residential brokerage Elika Real Estate, which became the subject of a case study by Facebook, offers a glimpse at exactly how firms can monetize social media.

This past fall, the firm invested in Facebook ads that are capable of targeting specific users, based on their location and interests, to promote a 115-page “Home Buyers Guide” geared toward New York buyers.

The campaign, which ran in November and December, reached more than 21,000 people, resulted in 962 guide downloads and generated 341 new website visits, according to the study, which Facebook promoted online.

Elika’s website logged 6,073 clicks from the ad, at an average cost to the firm of 17 cents per click.

“It’s paid for itself already,” said Gea Elika, who founded the brokerage, which exclusively represents buyers.

Elika declined to disclose the cost of the Facebook campaign, but ads on the social network range from a few dollars to boost an individual post to a few thousand dollars for a broader campaign. Elika said overall, social media accounts for 50 percent of

Who’s added the most Facebook followers?

FIRM

JULY ‘15

JULY ‘14

CHANGE

Leslie J. Garfield & Co

6,985

1,172

496%

Compass

13,185

6,710

97%

Town Residential

8,866

6,447

38%

CORE Real Estate

3,500

2,755

27%

Stribling & Associates, Ltd.

1,844

1,499

23%

Platinum Properties

3,498

3,047

15%

BLU Realty Group

5,129

4,555

13%

Douglas Elliman

39,086

35,151

11%

Keller Williams NYC

11,067

10,141

9%

Nest Seekers International

292,923

280,124

4%

The Corcoran Group

124,725

119,804

4%

Bond Real Estate

9,973

9,813

2%

Halstead Property

20,243

20,184

0.3%

Citi Habitats

13,923

13,928

-0.1%

Source: Quintly

by NYU business professor Scott Galloway that analyzes digital trends. L2, which last year raised $16.5 million from venture capital firm General Catalyst Partners, is a subscription-based service that gives its members access to proprietary data, including their own digital performance.

Oge said if Elliman wants to keep its market share, “We have to be a little smarter and we need to be more open with respect to the shifts in the zeitgeist.”

In that regard, the firm is looking for cues from dozens of L2 members, which range from the crystal company Baccarat to Victoria’s Secret to the piano company Steinway & Sons.

“Benchmarking us within the industry is not my priority,” she said. “I don’t see the best practices in real estate, so [L2 is] going to be benchmarking us against other types of companies.”

38 August 2015 www.TheRealDeal.com

the firm’s advertising budget, up from 10 percent a year ago. Facebook accounts for 35 percent of the social media budget. “The most enticing part is the fact that you’re able to monetize the marketing through Facebook,” said Elika. “If I’m looking for a consumer who likes Tom Ford and Mercedes, I can market through that channel.”

In fact, when Facebook users create ads, they check off boxes to select the characteristics of their intended audience — such as age, location or social groups they are part of. According to Facebook, that’s a way for businesses to “reach precisely the right people,” whether that’s a 55-year-old sports fan in California or a 35-year-old New Yorker interested in architecture.

While Elika calls his recent ad campaign a success, he wasn’t convinced that Facebook or Twitter ads could succeed until

about a year ago. For years, the firm has used heat maps on its website to monitor what users are interested in and tweak its voice on social media.

But recently, the platforms themselves have improved their advertising features, letting businesses measure the effectiveness of ads. “They’ve matured into a marketplace,” he said.

The big ‘push’ A firm’s ability to track and engage their audience is key because, from a marketing standpoint, social media falls into the category of “push marketing.”

That’s the opposite of old-guard banner ads that wait for people to stop what they’re doing and visit a website. “The expectation that someone will do that, especially in a town like New York City, you’re probably thinking a little too highly of the content you’re putting up,” Oge said. “Push content coupled with awesome content is where magic happens in our business.”

Leone said Halstead’s social media decisions are all strategic. “For the most part, we have figured out by now what works and what doesn’t,” he said. “You gear your message toward that voice or content.”

Beyond Facebook and Twitter, more firms are also embracing photo-and-videodriven platforms, such as Instagram and Periscope. And some firms are expanding the boundaries even further.

“Social media continues to change, so we have to constantly revisit [our strategy] and change accordingly,” said Elizabeth Kosich, director of marketing and digital strategy at CORE, which is starting to use Snapchat and Meerkat, an app that lets users stream video on Twitter.

Meanwhile, Town is testing the waters with Chinese social networking sites Weibo, QQ and Baidu. In May, the firm started running ads in Chinese offering brokerage services and featuring listings, said Cohen, who said the initiative is still in a beta phase, so it’s too soon to say how effective it is.

“We know that New York attracts international buyers,” he said. “Letting them know we have services that cater to their sensibilities is a great way to keep Town top of mind when they’re shopping for a firm to work with.”

Indeed, brand recognition is the end game for virtually everyone.

“Nowadays, brokerages all have access to the same information. One thing that differentiates is their social media,” said Dezireh Eyn, Platinum’s COO. And, of course, “everyone wants to go viral,” Elika said.

“That will hopefully happen to us one day in some shape or form,” he said. “But if there’s steady conversation, that to me is success. We hope those people will remember us when they’re looking to rent or buy a home down the line.” TRD

Dabbling on the dark side of social

BY E.B. SOLOMONT one right, social media can elevate a brand. Done wrong? Social media may deliver a swift black eye.

Jared Cohen, Town Residential’s marketing manager, said one of the most innocuous missteps is using social media to aggressively sell a listing. “No one likes a wolf in sheep’s clothing.

They don’t want a Trojan horse and that’s not what social is,” he said.

Beyond such rookie mistakes, an over-reliance on “fake” followers is a dark underbelly to social media. Nest Seekers International, which has nearly 300,000 Facebook followers, by far the most of any residential firm, appeared to use various tactics to boost its social media reach in the past.

Many are adamantly against the practice, which boosts a firm’s numbers, but doesn’t do much when it comes to landing business. “It ends up biting them,” said digital marketing strategist Brittany Milstead, a Florida-based consultant who has worked with clients such as Keller Williams and RE/MAX. It’s easy to weed out accounts with fake followers, by comparing the ratio of users to likes or shares.

While there isn’t a hard and fast ratio to judge by, an account with a large following that doesn’t elicit many likes, comments or shares should raise a red flag. On Facebook and Twitter, it’s not uncommon for brands to have engagement rates — defined as the number of likes, shares or comments per follower — in the single digits. On Instagram, however, the rate is significantly higher.

Beyond the PR blemish that can ensue if a firm is exposed for inflating its figures, fake followers can also wreak havoc with Facebook’s algorithm for displaying branded content, said Milstead. For example, Facebook factors in the location of followers to determine who else sees content. So if more people in NYC like photos, compared with,say,Boston,the New Yorkers will see the content in their Facebook news feeds more.

To illustrate how fake followers could skew Facebook’s algorithm, Milstead used the example of a “click farm,” or group of low-paid workers paid to click on ads, many of which are based in China. “Facebook may assume people from China like this” and ultimately stop showing the content to local users — the ones who actually matter when it comes to turning likes into deals.

Facebook, Twitter and Instagram have taken steps to limit spam and fake followers. In December 2014, Instagram deleted millions of fake accounts and this past March, Facebook deleted inactive accounts in an attempt to shut down click farms.

Members of the real estate community took notice. “A fake follower, if they are not there for a genuine reason, won’t engage with you anyway,” said Elizabeth Kosich, director of marketing and digital at CORE. And, she said, “People can tell.” TRD

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SOCIAL MEDIA

Who

it best?

The victories and fails of some of the residential world’s most active Instagrammers

BY E.B. SOLOMONT f a picture is worth a thousand words, New York City residential brokers on Instagram, the photo-centric social platform, are a wordy bunch.

This month, The Real Deal paged through hundreds of Instagram posts by residential real estate players and picked out some noteworthy feeds. We looked at both mega brokerages and active firms and agents, and chose a cross-section of strategies.

On the brokerage side, for example, Halstead Property almost always uses listings shots, while Compass rarely does. On the agent front, both power broker Dolly Lenz and Douglas Elliman’s Luis Ortiz, who appears on Bravo TV’s “Million Dollar Listing New York,” are using the platform to build their personal brands, like so many other agents in the city. As of last month, Ortiz had a stunning 230,000 followers — far higher than anyone else in this representative survey, but less than his co-stars Fredrick Eklund and Ryan Serhant, who had 418,000 and 321,000 respectively.

To judge the effectiveness of these strategies, we asked a panel of experts to weigh in on one emblematic post — and they each had a unique take. Below is a rundown of their takes in an unscientific order.

MEET THE EXPERTS

I

LAURI

PETER SHANKMAN:

HARRISON:

STEPHEN:

SREENIVASAN:

Adjunct professor

Chaired professor

Chief digital officer

of marketing at NYU

of marketing

of marketing at the

at the Metropolitan

and the author of

at Columbia

University of Oxford,

Museum of Art and

“Customer Service:

University’s School

Saïd Business

an adjunct professor

New Rules for a So-

of Continuing

School.

cial Media World.”

Education.

222 posts | 3,169 followers | 231 following

678 posts | 14.8k followers | 363 following

TRD: Compass’s feed is heavy on design aesthetic and on combining polished listing

TRD: Followers generally see an array of buzz-worthy listings — and the agents marketing them — plus dramatic cityscapes, like this aerial shot of Manhattan under a moody sky.

Shankman: Asking for your favorite song was too BuzzFeed-y for me.

Harrison: Eye-catching photo grabs attention. Dozens of comments in response to the question shows engagement. But it’s missing hashtags to provide additional context.

Sreenivasan: Unusual photos work best, especially in real estate where so many pictures can look the same. I also liked the idea of tying in music. Good way to engage the audience, though better to seed it with a couple of songs in the original caption.

compass it all about perspective-- the #NYC sunset through a new lens. (Photo by agent @_rounttown)

what does it have to do with real estate sales?

THE CORCORAN GROUP

photograph doesn’t. It’s confusing to call it Carnegie Park in the caption and Carnegie Hill in the hashtag.

482 posts | 3,708 followers | 77 following

TRD: Corcoran’s feed emphasizes its listings, while incorporating photos and video to feature favorite neighborhood spots. Here, we see the lounge at Related’s 325-unit Carnegie Park, where Corcoran says it sold 100 condos in the same number of days.

Shankman: Nice use of sarcasm.

Harrison: The message is great. It reflects the positive momentum for deal closings for Carnegie Park. Good use of hashtags. [But] while the picture is beautiful, it’s fairly typical.

100 deals in 100 days is compelling, therefore [they should] include a link to a landing page or website to give more details about the “deal.”

Sreenivasan: I might like to know the

TRD: Halstead features listings, listings and more listings formatted like Polaroid photos.

This post does just that at a 20-unit condo, the Orleans on the Upper West Side.

Harrison: Fantastic image to show spaciousness and natural light ... the link to the listing is appropriate. But this post is bit of an overkill for hashtags. A few is good, a handful is pushing the limit, and 22 is over the top.

Stephen: Great-looking photo and the content is about a particular property, so it’s relevant. The only shortcoming is that they didn’t use the text to get people interested.

Sreenivasan: This is an example of a specific address, but there’s no sparkle in the caption.

Presuming you got it covered in the hashtags is not enough.

exact building. Always good to give people a sense of the location in the caption if the 40 August 2015 www.TheRealDeal.com

douglaselliman Whats your favorite song written about New York?

HALSTEAD PROPERTY

1,233 posts | 6,416 followers | 62 following

thecorcorangroup With a lounge like this, among many other amazing amenities, it’s no surprise that Carnegie Park, had oh...100 sales in 100 days. No big deal. #dealady#fivestarlivingbyrelated#carnegiehill

at Columbia University’s School of Journalism.

DOUGLAS ELLIMAN

unique lens.

Shankman: Nice and artsy.

Harrison: Excellent use of imagery for the message they are trying to convey.

The image is unique, grabs attention and provides the right context.… This is a great example of sharing the beauty of New York City without selling, as there is no link to a listing or website.

Stephen: Looks great and is visually appealing to draw followers in. However,

SREE

Adjunct professor

COMPASS

shots and cityscapes with stylized agent photos. This shot fits right into that mission, depicting NYC at dusk, seen through an

ANDREW

halstead The Orleans Boutique Condominium www. halstead.com/12436919 #TheOrleans #UpperWestSide #NYC #condominuim # views # centralpark #Museumof NaturalHistory # spacious #updated #modern #decor #chic #details #design #woodfloors #kitchen #livingroom #foyer #eyecandy #halsteadproperty #luxury #realestate

SOCIAL MEDIA

NEST SEEKERS INTERNATIONAL

TOWN RESIDENTIAL 857 posts | 2,335 followers | 633 following

314 posts | 28.7k followers | 213 following TRD: Nest Seekers opts for grand listings with an emphasis on exotic real estate, often with a literary quote. This shot focuses on the curved metal staircase in a duplex pad.

Harrison: Stunning image. The viewer can sense the texture of the wall, brick, metal and iron. The message is simple and there’s an appropriate use of hashtags. But it may leave the reader wanting to learn more about this property. Is it for sale? Did it recently sell? Where is it located?

Stephen: The photo looks good and enticing, but the text has nothing to do with selling or leasing residential property.

Shankman: This is my favorite of all of them — not sales-y, they used a brilliant quote and only two hashtags. I’ve followed them based on this alone.

nestseekers Winning isn’t everything, but it beats anything in second place. - William C. Bryant #RealEstate #NestSeekers

TRD: The firm often adds text to photos to spotlight unique selling points and educate followers; it also features agents’ photos in a weekly competition. Here, Town touts the dining room at 111 West 13th Street as “ideal” for dinner parties.

Stephen: A good example of an effective post. It combines a real property listing with a quote that speaks to a feature in the photo.

Harrison: The message matches the image and provides the property location. There’s an appropriate use of hashtags. It would be helpful to list the hours for the open house in the message. A link to the listing and future open house dates would be fitting for this type of post.

Sreenivasan: This works, and is a clever use of text on image. It would also be good to test out Instagram’s layout app to build a collage.

DOLLY LENZ

LUIS ORTIZ

458 posts | 1,641 followers | 180 following

1,445 posts | 234k followers | 127 following

TRD: Lenz’s feed is a potpourri of personal, real estate and whimsical shots. Here, Lenz poses with Yahoo CEO Marissa Mayer at a Fortune’s Most Powerful Women event.

Sreenivasan: I like this. It gives a sense of the company’s connections.

I’d have included the hashtag of the Fortune event.

Stephen: This has nothing to do with real estate, but it is perhaps relevant to Dolly Lenz showing that she’s well-connected.

Harrison: The message shows excitement for the event and meeting Marissa Mayer. It’s a flattering photo of both women without too much distraction in the background. There’s excellent engagement by followers. There isn’t a lot wrong with this post, but [better to] edit photos when possible to eliminate red eye and adjust color hues, even when posting real-time at events.

TRD: Unlike his MDLNY co-stars, Ortiz often uses videos, not just photos. Here, however, we’re looking at a photo of Ortiz with Eklund and Serhant.

Shankman: They’re on a reality show. It’s no longer about real estate, it’s about their TV image.

Harrison: This is a brief post with a fun and quirky photo that resulted in a huge response from the community.

The hashtag was appropriate to trend on Throw Back Thursday. It would be appropriate to add @Bravotv and #MillionDollarListings to the post to provide additional context.

Sreenivasan: It’s hard to comment on something with 8,000 likes. Obviously this team knows what it’s doing. For #tbt, I like to see the original date.

dollylenz Amazing Speech! @FortuneMVP Event @Marissameyers & Me ;) @nikesharora @Accenture @Hilton @jvlenz

townresidential Overheard at an Open House at 111 West 13th Street. #mytown #luxury #nyc

luisdortiz #TBT to this! Good night

Source note: Number of posts and followers as of July 21, 2015.

Posting isn’t predictable Even the most detailed data can’t always predict what images will gain traction on Instagram. In many cases, a photo of a wine glass can generate as many “likes” as a New York City landmark or a listing. Here, TRD looks at a few match-ups with surprising results.

VS

VS

Sometimes a juicy pastrami sandwich beats out a nearly $15 million listing, as was the case for Corcoran with these two posts. Still, as of late last month the listing was no longer available.

Thankfully, the sandwich is still on the menu at Katz’s Deli.

Other times a listing generates more action, at least on Instagram, than a non-real estate shot. Here a $9.9 million Platinum Properties’ penthouse at the Setai Wall Street, which has not yet sold, gets more love than a Revolutionary War-era ship.

www.TheRealDeal.com August 2015 41

ART & REAL ESTATE

The collectors (from left): Edward Minskoff, Harry Macklowe, Aby Rosen, Sheldon Solow and Jerry Speyer

skoff, the From Macklowe to Min amassed ave industr y moguls who h ctions the biggest art colle

BY MARK MAURER henever Edward Minskoff sees the iconic image of a leather-clad Marlon Brando on a motorcycle, he thinks of the one that got away.

Minskoff offered nearly $1 million in the late 1990s for Andy Warhol’s 1966 silkscreen, “Marlon,” which is based on a still from the biker film “The Wild One.” He was stunned when his offer wasn’t accepted. Minskoff claims that the art dealer mis-

W

represented the situation and was actually not authorized to sell the painting.

The developer has good reason to still be crestfallen.

The silkscreen was last sold at a Christie’s New York auction in 2012 for $23.7 million, while another version, “Four Marlons” went for $69.6 million in November.

“I only felt bad about one piece I lost,” Minskoff said, referring to “Marlon.” “Then again, if you don’t have it, you can’t miss it.”

Minskoff is, of course, not the only New York City real estate mogul with an impressive art collection to go along with his real estate portfolio. Real estate and high-end art tend to go hand-in-hand, both as asset classes and parallel passions (see 42 August 2015 www.TheRealDeal.com

related story on page 48).

Judd Tully, art critic and editor-atlarge at the international art news website Blouin Artinfo, said real estate executives are often drawn to art collecting. He said in addition to art appreciation, there are two key reasons for that: The wheeling and

And like the New York City real estate market, the art market is also on the upswing. As a result, some collectors, like some real estate investors, are wary about buying now because of what they perceive as frothiness in the market.

Despite the expanded pool of ultra-wealthy

“Most people who own a lot of art use it as its own fund. The pieces that appreciate in value — they’ll sell them to buy more art.”

lating the total value of a vast collection is almost impossible.

But there are a slew of real estate moguls — from Related Companies’ Stephen Ross to Cohen Brothers’ Charles Cohen to HFZ Capital’s Ziel Feldman — who collect.

This month, The Real Deal took a close look at some of the moguls with the most notable art collections — those who have been entrenched in the art world for years and have a traceable history. Many raise their paddles at art-house auctions, employ art consultants to help curate their collections and hold board seats at esteemed art institutions.

MARION MANEKER, ART MARKET MONITOR BLOG

Harry Macklowe dealing it takes to secure a coveted piece of art, a process which directly parallels their real estate exploits, and the prestige.

“Whatever the particular occupation may be, the collector becomes something of an addict,” Tully said.

The global pool of contemporary art collectors has grown in recent years from Americans and Europeans to collectors from China, Russia and the Middle East and the “newly minted billionaires of Indonesia and Malaysia,” Tully said.

buyers, “almost all are on the same track of competing for trophy works” like Picasso and Warhol and other brand names, Tully said.

“Most people who own a lot of art use it as its own fund,” said Marion Maneker, publisher of the Art Market Monitor blog, which covers trends in the global art market.”

The pieces that appreciate in value — they’ll sell them to buy more art,” Maneker said.

The value of private art collections is hard to pin down. Maneker said that given the high proportion of private sales, calcu-

Developer Harry Macklowe’s wife, Linda Macklowe, is considered the brains behind one of the most valuable private art collections in the industry. Over their 56-year marriage, the couple has amassed a vast collection of postwar and contemporary art.

The value of that collection, however, is anyone’s guess. In her recently released book “The Liar’s Ball,” author Vicky Ward valued it at “around $1 billion.”

A source tied to the art community, however, disputed that figure, saying Ward ILLUSTRATION BY NOAH PATRICK PFARR

ART & REAL ESTATE “pulled that number out of her ass.”

In response, Ward told TRD, “It is around that, per art experts who know it and dealers who helped amass it.”

The Macklowes, whose firm Macklowe Properties is currently building one of the swankiest condominiums in the city at 432 Park Avenue, declined to comment for this story.

This giant bronze rat was on display at Aby Rosen’s Lever House until a few months ago.

Their collection includes works by Franz Kline, Mark Rothko and Gerhard Richter, the book said.

“The Macklowes are definitely on top of the market,” Tully told TRD. “They attend art fairs and galleries to check out postwar, abstract and expressionist art.”

Linda, a member of the Guggenheim’s Board of Trustees, is said to be “obsessed” with collecting art, while her husband derives joy from outbidding someone at an auction.

“Harry loves [bidding at auction] for the theater, for the social aspects, ’cause everybody’s there. And he likes to be seen out,” an art adviser was quoted as saying in “The Liar’s Ball.”

But Linda has help in her quest for tracking down coveted pieces of art in the form of art dealer and consultant Andrew Fabricant, a partner at the Richard Gray Gallery on Madison Avenue. Fabricant declined to comment when contacted by TRD, but sources described him as “hilarious” and quick to use “sardonic barbs.”

Meanwhile, an assistant helps Linda hang the artwork at their East Hampton home, which is on Georgica Pond, and at their other homes, in a minimalist way, according to “The Liar’s Ball.”

Macklowe’s office is known for displaying art in that same clean style.

Macklowe’s real estate career has famously been marked by significant ups and downs — including the loss of his prized GM Building. His art collecting appears to be a bit volatile as well.

The Macklowes regularly appeared on magazine ARTnews’ list of the world’s 200 most active collectors for most of the 2000s, but have not made the cut since 2010.

And art collection runs in the family.

Harry’s brother Lloyd runs the Macklowe Gallery, a Madison Avenue collection of French art nouveau furniture and other

antiques. Among the items on sale is a Tiffany lamp valued at more than $500,000, according to the Wall Street Journal.

Sheldon Solow “There is a wide range of real estate mavens, but at the top of the heap would be Sheldon Solow,” Tully said. Of the group that TRD focused on, Solow has perhaps the most important collection of postwar modern art, Tully added.

He also noted that Solow is known as a “buy-and-hold type of guy.”

At least he was. In recent years, Solow has been more known for selling art than buying it.

Despite the 86-year-old developer’s estimated net worth of $3.6 billion, Solow reportedly sheds portions of his sizable collection of modern and renaissance art to finance real estate and pay off debts.

Solow scooped up much of his collection decades ago, for under $1 million per piece. But those pieces have reportedly appreciated exponentially over time.

For example, he paid a mere $230,000 in 1970 to buy the famed bronze Alberto Giacometti sculpture known as “The Pointing Man,” Tully said.

works by Henri Matisse, Franz Kline and Balthus.

Solow, more than just about anyone, has also been a pioneer in New York when it comes to using art in his buildings.

The 50-story Solow Building at 9 West 57th Street, which dates back to the 1970s and was his first office project, houses a

In recent years, Solow has been more known for selling art than buying it.

Despite the 86-year-old developer’s estimated net worth of $3.6 billion, Solow reportedly sheds portions of his sizable collection to finance real estate and pay off debts. ground-floor private gallery space for his personal collection.

The Solow Art & Architecture Foundation, a nonprofit he founded in 1991, fills the gallery with art that does not fit in Solow’s office or in one of his several homes.

Meanwhile, Solow’s wife, Mia Fonssagrives-Solow — stepdaughter of famed photographer Irving Penn — is a sculptor who in the spring had a solo exhibition at the Kasher|Potamkin gallery on West 26th Street

Aby Rosen personally owns more than 900 pieces of art, including roughly 100

by Andy Warhol, and others by Damien Hirst, Jean-Michel Basquiat and Alexander Calder.

In May he sold it for $126 million at a Christie’s New York auction, according to news reports.

The sculpture, along with a Picasso painting being sold by an unidentified owner, set a unique record in the art world: It was the first time two pieces with an estimated value of $120 million a pop went up for sale at the same auction.

In addition to the $126 million Giacometti, the billionaire has also unloaded $132 million worth of other paintings and sculptures in the last few years by famed names like Amedeo Modigliani, Francis Bacon, Joan Miró and Henry Moore.

His collection still includes

61-story condo tower at 100 East 53rd Street.

The avid Instagrammer — he has nearly 5,000 followers — recently shared a photo of the giant cast aluminum sculpture by artist Urs Fischer known as “Big Clay #4,” which was installed in the plaza in front of the Seagram Building in May and is on

featuring bronze and aluminum figures shaped like robots and aliens.

Aby Rosen While most developers keep their relationship with art under wraps, Aby Rosen takes the opposite tack with his massive collection of contemporary art and photography.

The RFR Holding chief personally owns more than 900 pieces of art, including roughly 100 by Warhol. Rosen’s art assemblage, which also includes works by Damien Hirst, Jean-Michel Basquiat and Alexander Calder, has steadily grown over 15 years. Incidentally, his assemblage of buildings in New York and elsewhere has also grown during that time and now includes roughly $10 billion worth of properties globally, including the Seagram Building on Park Avenue and the under-construction

display through September. Other works

by Fischer have also graced the plaza such as a 20-ton bear sculpture painted a yellow bronze known as “Lamp/Bear.” That sculpture sold for nearly $7 million at a Christie’s auction in 2011.

The German developer — whose mother and father survived the Holocaust and then became a painter and real estate developer respectively — has a penchant for making big statements with his art. He turned the lobby of the Lever House on Park Avenue, for example, into a full-on exhibition for art, at least

space

some of which Over the years, the home to art from as Jeff Koons and

he owns. space has been big names such Calder.

“With Aby Rosen, you see him using art to polish the value of his properties and to enhance the brand,” said Tully, who refers to him as the “czar of art acquisitions” among his real estate colleagues.

The hobby may run in the family. Sources have spotted Rosen’s son Charlie, who is in his late teens, raising his hand at auctions for his father.

Rosen told the New York Daily News his first art purchase was a Robert MapplethoAlberto Giacometti’s rpe pho- “Pointing Man” tograph when he was 11 years old and still living in Germany. His dad lent him $200 for the purchase.

In some senses, Rosen is a model citizen in the art community. He is chairman of the New York State Council on the Arts and cofounder, with art dealer Alberto Mugrabi, of the Lever House Art Collection. In addition, publicly sharing his photographs of art shows and galleries only raises public

Jeff Koons’ “Balloon Rabbit (Red)” on display at 51 Astor Place.

www.TheRealDeal.com August 2015 43

ART & REAL ESTATE awareness about global art exhibitions. He recently posted a photo of himself in from of a giant yellow serpentine-like sculpture at the Venice Biennale in Italy.

Preservationists and artists, however, have been furious about some of his decisions.

In Old Westbury, Long Island, he went head-to-head with the mayor and

news’ collectors list every year since 1998.

The couple usually acquires art from private dealers and avoids auctions, so assessing their collection is tricky. But Speyer has purchased artwork by Koons, Eric Fischl and Hirst, and generally holds the pieces long-term. He rarely sells, according to news reports. Along with Solow, Speyer is one of

“We can decide in two seconds if we like something. Waiting a month — taking an extended time to take a conclusive position — is pathetically stupid.”

EDWARD MINSKOFF, MINSKOFF EQUITIES town board when he installed a 13-ton Hirst statue of a naked, pregnant woman with an exposed fetus outside his historic estate. He’s also faced public backlash for endangering a Picasso canvas at the Four Seasons restaurant (which is located in the Seagram Building) by moving it to repair a wall, and for his plans to demolish a Tribeca workspace and residence for artists.

A Matisse painting that’s part of Sheldon Solow’s collection.

Earlier this year, Rosen paid $55 million for photographer Jay Maisel’s famous, graffiti-covered building at 190 Bowery, with plans for a conversion.

Regarding the graffiti, Rosen told the New Yorker: “It gives the building some sort of aura, some sort of cachet. … But, once the building is finished, who knows? I mean, graffiti is nice, like the gritty seventies of New York. But let’s be honest — those days are gone.”

Jerry Speyer Jerry Speyer, co-CEO of development giant Tishman Speyer, is one of the most active collectors of contemporary art in New York City real estate.

He and his wife, Katherine Farley, a top executive at Tishman Speyer and chairwoman of Lincoln Center, have appeared on ART-

the longest-standing art collectors from the real estate industry, Tully said.

Speyer, whose net worth is estimated at $4 billion, also reportedly seeks out irreverent art from unknown artists, and owns a graffiticovered block of the Berlin Wall, which is currently on public display in the lobby of Tishman Speyer’s 520 Madison Avenue.

In addition, the 75-year-old Speyer — who leads the development firm with his son Rob — is an active member of the New York City art world. He has served on the board of the Museum of Modern Art since 1982, and has been chairman of the board since 2007. He is also on the board of the Municipal Art Society of New York and is a member of the American Academy of Arts and Sciences.

Some have criticized the abundance of developers and financiers on museum boards.

In January, however, cosmetics heir and avid art collector Leonard Lauder publicly defended Speyer.

“I think Jerry Speyer is doing a great job,” he told Vanity Fair. “The people who collected modern art early on were businessmen, too — Bill Paley, Jock Whitney, the Rockefellers.”

And if his art collecting and museum posts don’t keep him busy, his company’s self-reported $73 billion-plus portfolio — which includes Rockefeller Center and a

proposed $300 billion office tower on the Far West Side (see related story on page 32) — no doubt will.

Edward Minskoff Minskoff has so much art he can’t keep track.

In a 2008 interview with TRD, he said he owned as many as 500 pieces. But last month he couldn’t put an exact count on the number of pieces in his collection.

He, too, rarely sells. Only when a piece has no historic meaning or he’s fallen out of love with it, will he consider it, he told TRD. For example, about two years ago, he privately sold an early 1940s surrealistic painting by Rothko that he no longer found appealing, he said. Otherwise, he said, he would only scale back if he was running out of space at home and in the office.

Minskoff said he does not consider his art pieces investments like his real estate.

He said he buys out of passion.

And he is very definitive about what he likes.

Daniel Brodsky is chairman of the Metropolitan Museum of Art, one of the most prestigious posts in the art world.

the most prestigious posts in the art world.

Daniel, 70, and his wife, art scholar Estrellita Brodsky, own about 500 pieces, mostly modern and contemporary art from Latin American artists such as Venezuelan Jesús Rafael Soto and Brazilian Lygia Clark.

The Brodskys “have never used a curator and have been fortunate to have had good relationships with living artists, many galleries and the auctions,” a spokesperson for the company said.

Brodsky became a trustee on the Met board in 2001 and was elected chairman in 2011.

The developer also has art and real estate in his blood.

Growing up, his mother was a painter and his father, Nathan Brodsky, was a developer. He and his father founded the Brodsky Organization in 1971. The firm owns 80 buildings with 8,000 apartments citywide, including its 19-story luxury condo at 135 East 79th Street that opened last year.

Francis Greenburger

“We can decide in two seconds if we like something,” Minskoff said. “Waiting a month — taking an extended time to take a conclusive position — is pathetically stupid.”

Minskoff — whose Manhattan real estate portfolio includes the new-construction office

Francis Greenburger, CEO of Time Equities, has been a collector of abstract and realist art since the 1980s. He told TRD in a 2007 interview that his priciest buy was a sculpture by Philip Grausman for $95,000.

It’s unclear whether he’s topped that with a pricier purchase. While he might not compete with the other New York City moguls mentioned here when it comes to collecting, his philanthropic work is noteworthy.

In 1986, he created the Francis J. Greenburger Award to recognize an unknown artist with a $12,500 prize every year. Then in the 1990s, he founded the Omi International Arts Center, an upstate New York-based nonprofit with residency programs for visual artists as well as writers and musicians

building 51 Astor Place; the IBM Building on Madison Avenue; the condo tower at 101 Warren Street and others — has been surrounded by art his whole life. His mother, Isabelle Minskoff, was a sculptor and art collector.

“My mother was an excellent artist, but only a few times showed her work,”

on a 300-acre campus. The site, in Ghent, N.Y., houses a 60-acre sculpture park called the Fields, which the late art dealer André Emmerich helped Greenburger create.

“I had all this land at Omi,” Greenburger told the Financial Times. “I consulted André, who was a great champion of

Minskoff said.

He also met his wife, Julie, who oversees the couple’s collection, at an art-related dinner. Their collection is largely made up of contemporary American and European art, in addition to pop and postwar art.

His buildings have featured works from his collection, such as a Jonathan Prince sculpture known as “Light Box” at the IBM Building and a Koons sculpture of a 6,600-pound red rabbit at 51 Astor.

sculpture in the landscape. He said, ‘This is very timely as I’m closing my own sculpture garden. Come and choose what you want!’”

For his contributions to the arts, the French government recognized Greenburger in 2008 with its insignia of Chevalier of the Order of Arts and Letters.

Meanwhile, Time Equities’ Greenwich Village headquarters holds more than 200 pieces of art, from the likes of Kenneth Noland, Stephen Mueller and more.

The company, which is now developing the 64-story condo tower 50 West Street, employs an in-house curator to head its “Art in Buildings” program.

In 2009, Greenburger told the New York Times that he had considered dabbling in painting, but decided against it. “I thought about painting a little bit, but it seemed like it was pretty hard to do well,” he said. TRD

Daniel Brodsky When scoping out artwork, Daniel Brodsky is naturally inclined to buy paintings and drawings by architects, especially the Swissborn modernist known as Le Corbusier.

The Brodsky Organization senior partner is also the chairman of the Jonathan Prince’s “Light Box” Metropolitan Museum of Art, one of sculpture is currently on display at 590 Madison Ave.

44 August 2015 www.TheRealDeal.com

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ART & REAL ESTATE

FOR THE LOVE OF ART Residential developers increasingly add murals and sculptures to projects to boost cachet — and prices

A 90-foot long abstract mural by artist José Parlá at One World Trade Center.

BY TESS HOFMANN pening night at Fortis Property Group’s new condo project, 212 North 9th Street in Williamsburg, got an added boost from an unlikely source: A piece of abstract art. The building, which features a rooftop mural by contemporary artist David Paul Kay, done in his vibrant black-and-white style, was a big crowd pleaser.

And the mural was not just on exhibit, it’s painted on the roof — the most notable amenity in a building that also sports an art library, indoor parking and private outdoor space for almost every unit.

Brokers have long used loaned art to stage new development apartments, but these days developers are increasingly incorporating art into the public spaces of residential projects, much like commercial developers have done for decades. The move to “art-up” is being driven by several factors, from upping a building’s cultural cache to helping push up prices.

“A fabulously designed lobby by some well-known interior designer or artist is going to demand a higher rent,”

O

But it’s not just lobbies and rooftops getting new art installations.

At the Herzog & de Meuron-designed 56 Leonard Street in Tribeca, developers Alexico Group and Hines commissioned an outdoor piece by renowned artist Anish Kapoor similar to his famous “Cloud Gate,” a bean-shaped sculpture in Chicago’s Millennium Park. The sculpture, Kapoor’s only in New York, will be wedged under an outcropping on the building, and is likely to become a destination in itself for contemporary art lovers.

Installing art in residential projects, sources say, appeals to buyers who consider themselves “creative types,” as well as those who see art as a status symbol.

“People who put incredibly expensive paintings in their lobbies — hopefully they are demonstrating a love for art, but they are also demonstrating the wealth and power that that art stands for,” said Courtney.

Portzamparc-designed 400 Park Avenue South, a hybrid condo-rental by Toll Brothers City Living and Equity Residential.

Santangelo said she encourages developers to set aside 1 percent of their project’s budget for art, though she admitted that the amount is more than most are willing to spend.

Santangelo found a large sculpture by John Clement for above the skylight of Equity Residential’s luxury rental building at 170 Amsterdam Avenue, where she said she’s placed art totaling upwards of $250,000. She said that Clement, who is based in Long Island City, typically gets $80,000 to $200,000 for large pieces.

Meanwhile, apartments in the 239-unit building rent for $3,400 (for a studio) to $17,000 per month (for a threebedroom). By comparison, the current neighborhood average is $2,065 (for a studio) and $6,164 (for a three-bedroom), according to data from brokerage Citi Habitats.

“I’m going to give [developers] the best possible look

Not breaking the bank Art doesn’t need to be outrageously expensive to make a statement,

“People who put incredibly expensive paintings in their lobbies — hopefully they are demonstrating a love for art, but they are also demonstrating the wealth and power that that art stands for.”

ADAM COURTNEY, LEE & ASSOCIATES said Adam Courtney, an associate director at commercial brokerage Lee & Associates, who holds a master’s degree in public art from the University of Southern California.

46 August 2015 www.TheRealDeal.com

according to Emily Santangelo, an art consultant who has curated works at developments like the Christian de

“Tidal,” a sculpture by artist John Clement at Equity Residential’s 170 Amsterdam Avenue.

ART & REAL ESTATE for the space, and they don’t need to spend a million dollars,” Santangelo said.

Works by blue-chip artists are, of course, more expensive.

But when developers are purchasing the art to keep permanently rather than as an investment, they don’t need to go for that top tier, Santangelo said.

“There is this echelon that is bankable.

But [developers] don’t need to do that.

I have been beating this drum for a long time,” she said.

In fact, observers say that the most financially beneficial use of art for a developer is often to keep it in place and use it to help drive up sales or rental prices in the building.

Art in a building “drives a premium for those who appreciate it,” said Jonathan Kaufman Iger, CEO of Sage Realty Corp., William Kaufman Organization’s leasing and management division. But there’s no formula to determine exactly what the upcharge is.

profile tenants, IBM. The sculpture, however, is part of his personal collection, and was not part of the development budget.

Minskoff declined to reveal how much he paid for it, but other large sculptures by the artist were auctioned for nearly $60 million

rents for the East Village, exceeding $100 per foot. Minskoff said that while he sees great architecture as an important factor in commanding higher rents, artwork in a building is more like “a little cherry on top of the cake.”

The Koons rabbit was not part of his The rooftop mural by David Paul Kay at 212 North 9th Street in Williamsburg

Expanding on tradition While placing artwork in residential projects is a more recent trend, commercial buildings have been adorned with paintings and sculptures from time immemorial.

From Edward Trumbull’s mural adorning the lobby ceiling of the Chrysler Building, installed in 1930, to Isamu Noguchi’s Red Cube at 140 Broadway dating from 1968, New York City’s office buildings feature a wide array of well-known artwork that’s been in place for decades.

And that’s continuing in newer buildings: The office portion of Tower 46 at 55 West 46th Street, which is owned by SL Green Realty, features British artist Sarah Morris’ 28-foot painting “2008 (Rings)” a 1960s-reminiscent Mod graphic inspired by the 2008 Summer Olympics and estimated to cost between

Artist Tom Fruin’s “Watertower” on the rooftop at Two Trees’ 20 Jay Street in Dumbo, a neighborhood where the firm has established itself as a patron of the arts.

$300,000 and $400,000.

In the Durst Organization’s One World Trade Center, an approximately $3.8 billion project, the developer spent roughly $1 million on artwork, including a 90-foot-long abstract mural by Brooklyn-based artist José Parlá, according to Adelaide Roset, an art consultant with Edelman Arts, who helped curate the space.

“They got bad reviews on the architecture, but all of the reviews on the art were great,” Roset said. “It’s gotten a lot of press. Now they get why it’s good to have art in your buildings.”

Of course, there are well-known artists and then there are really well-known artists.

When a piece by Jeff Koons, Roy Lichtenstein or Alexander Calder lands in the public space of a building, it’s a safe bet that the work is either part of the developer’s private collection (see related story on page 48), being leased, or on loan from a gallery.

Developer Edward Minskoff is well known in art circles for displaying Koons’ candy apple-colored “Balloon Rabbit (Red)” in the lobby of his office building 51 Astor Place, which houses, among other high-

Dev Developer evelo e per elo e Yitzchak Y tzc Yi tzchak hak ak k Te Tessl Tessler ss er ssl e in n the sales sales ga galle gallery llery lle ryy off 172 Madison Madis Ma dison dis o with on w h a pi wit piece ece off art th willl ssoon tthat att wil w wi oon be oon e installed ins nsstal ta led e at the ed the condo cond ndo o ttower. owe w r. r.

in 2013, around the same time that Minskoff got his sculpture, seven and a half years after commissioning it.

Opened in 2013, the Fumihiko Maki-designed 51 Astor reportedly commands record

business plan: He originally planned to display the 14-foot-tall, 6,600–pound sculpture in the yard of his Southampton home, but decided that exposing it to the elements was too risky.

Décor for rent Developers without extensive private collections of their own can obtain top-shelf art through leasing.

The practice offers a cheaper way to get recognizable art into a building. And while the art is not considered an asset, it does qualify for a tax write-off.

“Even though we are talking about multi-million-, and sometimes multibillion-dollar buildings, they don’t always want to use that capital on art,” said Roset, who in addition to consulting for Edelman now also works for a new art leasing company called Artemus, cofounded by the Dursts, financier Asher Edelman, and private equity executive David Storper.

“By leasing, they preserve that capital.

It is financially advantageous, especially on the tax write-off,” she added, noting that Artemus’ clients can lease an $8 million art portfolio for $50,000 a month, or a $2 million portfolio for $13,000 a month.

Getting a gallery to loan out a piece of art for free, however, is another option.

At the William Kaufman Organization, which has a permanent collection, there are also currently at least six pieces on display lent by galleries, including a Sterling Ruby painting at the firm’s 767 Third Avenue office building. Ruby’s works have sold at auction for above $1 million.

Some developers say their motivation for installing art is pure.

“I didn’t do it to add value,” developer Yitzchak Tessler said of a massive ceramic wall-hanging he plans to install in his Midtown condo tower at 172 Madison Avenue. “I did it because I think it’s beautiful and it’s special.”

And in most cases, buying that beauty is a drop in the bucket when it comes to New York City development prices.

The social cachet is harder to quantify than the value of actual art. And for developers, being branded as a patron of the arts is a coveted characterization.

For its part, Two Trees Management has successfully branded itself as a benefactor of the entire Dumbo arts community. Of course, boosting the desirability of the neighborhood only makes the company’s buildings there more of a commodity. Now the firm is including art at its yet-to-be-built Domino Sugar development site in Williamsburg, where the construction barricade has become a commissioned mural.

The firm has a full-time cultural affairs coordinator, Lisa Kim, who organizes these projects. And, according to a source, the company has a yearly budget exceeding seven figures dedicated to public arts.

At Domino, construction costs will be over $1 billion; so including art will be a small price to pay in exchange for the buzz the art will likely generate. TRD www.TheRealDeal.com August 2015 47

ART & REAL ESTATE

Painted with the same brush Art and real estate are growing increasingly similar as asset classes while global wealth continues to rise

BY REY MASHAYEKHI rt and real estate — like wine and cheese — have long gone handin-hand.

So it’s no coincidence that many of New York City’s most successful real estate moguls also have impressive art collections, with works by everyone from Matisse to Warhol.

But collecting art is much more than a vanity project these days. Like real estate, art is increasingly being perceived as a safe haven for the storage of wealth.

In fact, the similarities between the two categories have become more striking over the last several years, as the global economic terrain has shifted and worldwide wealth has increased. That’s particularly true in the post2008 financial crisis environment, where not all traditional investment vehicles are considered guaranteed winners.

In April, Laurence Fink, the chair of asset management firm BlackRock, told an audience at the Credit Suisse Megatrends conference in Singapore that contemporary art, as well as real estate in cities like New York and London, had surpassed gold as “the two greatest stores of wealth internationally today.”

“And I don’t mean that as a joke,” he added.

“I mean that as a serious asset class.”

While the advent of exchange-traded funds — securities that act like funds and trade like stocks — has made gold more accessible to average investors, the exclusivity of art and highend real estate have increased the appeal (and value) of both categories to the über wealthy.

“The [residential condo] towers they’re

A

48 August 2015 www.TheRealDeal.com

building in New York right now are very much trophy assets, like A-plus paintings,” said Marion Maneker, publisher of the Art Market Monitor blog. “The fact that a triplex is 1,000 feet in the sky with views of Central Park is very hard to duplicate, just as there are very few of these top paintings.”

Stores of value Real estate and high-end art are, of course, unlike many other investments — both are status symbols that can be flaunted, but are rather illiquid. “Art and real estate are very similar in that they have to be analyzed in the same fashion,” said Michael Moses, co-

according to Moses.

“It’s fun to collect and it’s pretty to look at,” Moses added. “[But] very few other asset classes have that capability.”

Real estate is one of those few investments.

“Housing is an investment. It generally outpaces inflation,” said real estate appraiser Jonathan Miller.

Both the high-end art and luxury real estate markets have, of course, benefitted from a rapid increase of global wealth. As The Real Deal recently reported, there are now 367 people worth half a billion dollars or more worldwide, according to Wealth X, the global wealth data aggregator.

“A lot of collectors are using their art as collateral, and it’s becoming increasingly popular.

The people who are doing it are in the financial sector and real estate, or entrepreneurs — collectors who understand how to use leverage.”

SUZANNE GYORGY, CITI PRIVATE BANK founder of the Mei Moses Fine Art Index, which tracks the value and returns on tens of thousands of works through repeat auction sales dating back to the 18th century.

“No two pieces of real estate are the same and no two pieces of art are the same,” said Moses, who also co-founded advisory firm Beautiful Asset Advisors, which consults on the financial performance of the art market.

The index, which launched in 2002, shows that “almost every art collecting category has outperformed inflation over the last 50 years,”

Just as demand from such buyers has fueled the city’s ultra-luxury condo market and prompted New York developers to ask $100 million-plus for apartments, it has also led to record-breaking prices for high-end art.

For example, Dmitry Rybolovlev, the Russian oligarch who famously purchased a 15 Central Park West penthouse for a then-record-setting $88 million in 2011, bought a Mark Rothko painting through a private sale last August for $186 million — one of the highest prices ever recorded for a painting.

Developer Sheldon Solow, meanwhile, recently sold a bronze Alberto Giacometti sculpture, for $126 million at a Christie’s New York auction (see related story on page 42).

“The most important factor that drives the price of art is worldwide wealth,” Moses noted.

“And since worldwide wealth at the highest end has been increasing at a relatively rapid pace in recent years, it’s not surprising that those individuals would consider [investing in art].”

“There are so many billionaires these days, that if two of them decide they want [the same] painting, there’s no ceiling to how high the painting can go for,” he added.

Collateral capability While investors have used real estate as an instrument for financial leverage for decades, art’s rise as a “serious asset class” has also been aided by its increasing viability as collateral.

Suzanne Gyorgy, head of the Art Advisory and Finance team at Citi Private Bank (a division of Citigroup), said using art as collateral is “a big, ever-increasing part of the business.”

“A lot of collectors are using their art as collateral, and it’s becoming increasingly popular,” Gyorgy told TRD. “The people who are doing it are in the financial sector and real estate, or entrepreneurs — collectors who understand how to use leverage.”

Collectors often leverage their works “to invest in other business,” Gyorgy noted.

Deloitte and ArtTactic’s 2014 Art & Finance report valued the global art lending market at $9.6 billion per year.

Citi’s minimum loan size for artwork is $5 million, Gyorgy added, with loans often going for “multiples of that.”

And unlike in other countries, leveraged artwork “can stay on the collector’s wall as it’s being used as collateral” in the U.S. and Canada, she said. (In many other countries art must legally be stored when used for such purposes).

But the use of art as an investment vehicle is also far from straightforward. That’s because, as several sources noted, no two works are alike and determining what is valuable can be very subjective. “There are plenty of bigname painters whose works have sold over the last 10 to 15 years at a loss,” Maneker said.

“Art collecting in the broadest sense may have outpaced inflation, but it’s really easy to buy the right painting by the wrong artists or the wrong painting by the right artist,” Maneker added. “Just because there’s increasing value doesn’t mean it’s uniform.”

Indeed, investing in artwork is far more subjective than investing in real estate, Moses noted. “It’s not clear, when art’s coming out of the studio, which one is going to be the best painter,” he said. “But if you put the right building up, you’re probably going to have a winner.”

Gyorgy also noted that many of the world’s most successful collectors “didn’t start collecting for investment.” Instead, she said, their success stemmed from educating themselves, receiving sound advice and developing an eye for good work. Such collectors “don’t view art as an asset class,” she added. “But that said, they’ll say the works they’ve bought have been some of their best investments.” TRD www.TheRealDeal.com March 2012 00

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FINANCE

Rufrano’s repositioning American Realty Capital’s new CEO begins executing his game plan to turn around the scandal-plagued firm

offering, according to Bloomberg Business, and embarked on a massive buying spree that eventually made it the largest owner of single-tenant retail assets in the U.S. Its biggest acquisition was Cole Real Estate Investments, a manager of nontraded REITs, for $9.85 billion.

JMP’s Mitch Germain said ARCP “didn’t effectively manage its balance sheet” during that rapid expansion.

Others weren’t as diplomatic. “It was a Ponzi scheme,” said an executive at a rival investor, who spoke on the condition of anonymity.

ARCP funded its growth with too much short-term debt, which dragged down revenue. Germain said the REIT’s debt stood at around 7.4 times gross earnings, while the industry average is between 5.5 and 6.5.

It will now be up to Rufrano to reduce ARCP’s debt level in order to turn a profit.

To do that, sources say, he will have to make selling assets a big part of his soon-to-be revealed strategy.

“It will have to get into some form of liquidation mode,” Germain said.

Rufrano has already indicated he may sell parts of the portfolio.

“My guess is there’s stuff we should cull,” he told Crain’s in June. “So we’re going through the culling process.”

Cleaning house Glenn Rufrano is preparing to reveal his detailed turnaround strategy early this month.

BY KONRAD PUTZIER lenn Rufrano has a long to-do list. Rufrano, who was tapped to take over the scandalplagued American Realty Capital Partners in April, is now in the thick of trying to turn the real estate investment trust around.

The industry is waiting with bated breath to find out exactly what his game plan is. The CEO — who announced that he would be changing the company’s name when it moves its stock to the New York

G

hit one iceberg, how do I know that you’re not going to hit another,’” said Richard Morris, an attorney at Herrick Feinstein and a former regulatory auditor.

But Mitch Germain, an analyst with Manhattan-based investment bank JMP Securities who tracks ARCP, called Rufrano the “perfect individual for this job.”

“He has a long-standing track record with the REIT investing community, has done an absolutely fantastic job over the years building confidence, and has a really good understanding of the pulse of the

Not surprisingly, its stock price tanked (by 36 percent) in the immediate aftermath of the announcement.

Late last month the share price stood at $8.62 — not even a dollar higher than its post-announcement low and far lower than its May 2013 high of $17.82.

His task is to turn what many consider a $20 billion disaster into a successful company. And regaining investors’ confidence is, not surprisingly, at the top of the list.

Stock Exchange from Nasdaq early this month — is expected to reveal his strategy in an earnings call on August 6.

While Rufrano, the former CEO of Cushman & Wakefield, declined to comment in advance of that big reveal, industry observers say he has several key issues to tackle immediately.

His task is to turn what many consider a $20 billion disaster into a successful company. Regaining investors’ confidence is, not surprisingly, at the top of the list.

“People are going to say ‘I know that you

50 August 2015 www.TheRealDeal.com

investors,” said Germain.

Whether Rufrano can live up to that assessment remains to be seen.

Liquidation mode As just about everyone in the real estate industry knows, American Realty Capital Partners began its sudden and stunning fall from grace last October.

That’s when the company’s management revealed that its chief financial officer had intentionally overstated its cash flow to mask prior accounting errors.

Founded in December 2010, the company was one of several non-traded REITs launched by Nicholas Schorsch and managed by his umbrella firm, American Realty Capital. The New York-based ARCP has a national retail focus and actually doesn’t own any properties in New York City. American Realty Capital’s New York REIT — which has been aggressively buying up Manhattan office buildings — is a separate entity.

In September 2011, Schorsch and ARCP raised $70 million in an initial public

Rufrano laid ARCP’s situation somewhat bare at a recent REIT Week conference in Manhattan.

“We have a lot of lawyers running around this company right now,” he told the audience in June, citing $10 million in legal fees for the firm in the first quarter.

But even as he acCompany founder knowledged that there Nicholas Schorsch was “not much of a stepped down in the wake of the foundation to the comscandal. pany,” he struck a note of confidence.

“Once the market understands our corporate governance and business plan, we can start to get healthy,” Rufrano said. “We believe we can get there in a reasonable period of time.”

Rufrano may be basing that on the findings of an internal review that concluded before he stepped in. The company tapped the high-profile law firm Weil, Gotshal & Manges and the auditing firm Ernst & Young to comb through its books. Their review determined that the inflated stats weren’t a reflection of the overall financial health of the company’s portfolio. In other words, while cash flow was inflated, the value of the assets wasn’t.

But observers say Rufrano will have to show the business world that it’s investing in auditing and compliance to prevent these types of errors from happening again.

He’s already started to do that. In June, Continued on page 104

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FINANCE

REITs the latest target

for activist investors

Stakeholders get more aggressive, demand greater returns from publicly traded real estate companies

BY RICH BOCKMANN orporate raiders like Carl Icahn and Nelson Peltz made CEOs’ pulses race in the 1980s, when they were providing inspiration for the “Wall Street” movie character Gordon Gekko.

Back then, however, just a sliver of the equity market was focused on the real estate industry. Fast forward a few decades and those raiders, now known more generously as “activist investors,” are flexing their muscles at a time when real estate investment trusts represent a substantial part of the financial sandbox they play in.

Despite corporate structures and governance rules that many see as board friendly, activists are setting their sights on REITs in the latest wave of proactive investment on Wall Street.

“REITs had for a long time been viewed as a category of company that, as an asset class, was considered either takeover-proof or takeover-hardened,” said Richard Brand, an attorney with the law firm Cadwalader, Wickersham & Taft who has advised companies defending themselves from activism and activist hedge funds, including Bill Ackman’s Pershing Square Capital Management.

Ackman, Icahn and Peltz are well-known names among a cadre on Wall Street who will buy large stakes in a publicly traded company, then move to have a say in how that company is managed in the name of “maximizing shareholder value.” Often, they do this by demanding a seat or seats on the company’s board.

One reason REITs were thought immune to such takeovers is that the structure requires larger returns to shareholders in exchange for special tax considerations.

“The reality is that shareholders can gain influence and achieve board representation on REITs,” Brand added, and pointed to the hedge fund Corvex Management’s early 2013 takeover of CommonWealth REIT as a watershed moment that opened investors — and board members’ — eyes.

“I think that was a key turning point in the way people thought about REITs and the vulnerability of REITs,” he said.

C

On the rise In 1989, there were 120 publicly traded REITs in the United States with a combined market capitalization of $11.7 billion, according to data from REIT.com. The sector reached its pre-recession peak capitalization of $438.1 billion for 183 publicly traded REITs in 2006.

At the end of last year, more than 200 REITs had a staggering market cap of $907.4 billion.

52 August 2015 www.TheRealDeal.com

would stay on as a board member. The REIT also said it was launching a $150 million share buyback and was looking into selling some non-core assets, two other popular actions that activists frequently seek.

Greg Cohen’s family-run investment firm Rambleside Holdings supported Sorin’s call for New York REIT to sell off some assets. Cohen said he looks to Carl Icahn’s call for higher dividends and massive stock buybacks at Apple, where the infamous investor’s ownership stake equals less than one percent of the tech giant’s $750 billion market capitalization, as proof that investors can have a large voice.

“It’s staggering when a guy like Carl Icahn can go and get his voice heard at Apple,” Cohen said. “It’s telling that that didn’t used to happen,” he added, noting that if a company as successful as Apple can use some shaking up, there are plenty in the real estate sector that could as well. “In REITland, there’s a lot of REITs that should not be public.”

Big players “Corporate raiders” in the 1980s, Carl Icahn, left, and Nelson Peltz are now considered “activist investors.”

Richard Brand, left, an attorney with Cadwalader, Wickersham & Taft, has advised activist hedge funds, including Bill Ackman’s Pershing Square Capital Management.

Jonathan Litt’s Land and Buildings hedge fund launched six activist campaigns in the REIT sector. Greg Cohen’s hedge fund Rambleside Holdings supported the call for New York REIT to sell assets.

And as the REIT sector expanded, so too did investor activism. In 2010, investors initiated just two activist campaigns in the sector, according to information compiled by the research firm Activist Insight. That number grew to 14 actions in 2013 and 18 last year, a figure that is on track to be surpassed this year.

The results are a bit of a mixed bag.

Of the 56 REIT-related campaigns that Activist Insight identified since 2010, roughly 38 percent were either wholly or partially successful.

While relatively few REITs focus solely on New York City, one of the most recent high-profile campaigns hit close to home.

In June, Sorin Capital Management called for New York REIT to cut ties with its embattled parent company and sell off some of its assets. Sorin, which owns 1.9 percent of New York REIT, made the move following the fall of founder Nicholas Schorsch, who exited the board in December amid a scandal over accounting inaccuracies at New York REIT’s parent company, American Realty Capital Properties (see related story on page 54).

New York REIT responded by announcing William Kahane, a co-founder of American Realty Capital, was stepping down as executive chairman, though he

Corvex Management, whose CEO Keith Meister was a protégé of Icahn’s, and the Related Companies opened eyes in 2013, when they ousted the seven-member board at CommonWealth REIT (later renamed Equity Commonwealth) and installed billionaire investor Sam Zell as chairman.

Corvex and Related, which owned a combined 8.8 percent of the REIT’s stock, claimed that the company president had a conflict of interest by owning a piece of the management firm that ran the REIT. It was not Meister’s only foray into the REIT sector. In 2012, Corvex bought a 4.43-percent stake in the private prison operator Corrections Corporation of America and, along with another investor, successfully pushed the company to convert to a REIT. For companies of a certain size, the structure makes sense, because it allows them to save on taxes and increase payouts to investors.

Late last year, Corvex disclosed a 7.1-percent stake in American Realty Capital and in February penned an open letter calling for the REIT’s board to be completely replaced.

Two board members have since resigned, Leslie Michaelson and former Pennsylvania Governor Edward Rendell, and businessman Mark Ordan was subsequently named an independent board member. The company will hold its annual meeting on Sept. 29.

Meister said at a conference in June that American Realty had done “all the right things to repair itself,” and that it needed to reestablish a dividend.

Jonathan Litt is another investor shaking up the REIT sector. In the past six years, Litt’s Land and Buildings hedge fund launched no fewer than six activist campaigns, with varying degrees of success.

In April, the fund nominated four new members to the board at Macerich, which owns shopping centers throughout the country, including the nearly 1-millionsquare-foot Queens Center mall, after the company rejected a $16.8 billion takeover Continued on page 108

www.TheRealDeal.com January 2014 35

FINANCE

Funds and REITs may be hauling huge sums of cash, but are struggling to find investments with big upsides

BY KONRAD PUTZIER n the years following the 2008 crash, Barry Sternlicht was dubbed “the real estate bargain hunter” by the New York Times for buying up loan portfolios and properties at depressed prices and turning them into cash cows.

And the returns racked up by private funds managed by his company, Starwood Capital Group, were indeed impressive. Between March 2013 and June 2014, for example, Starwood Distressed Opportunity Fund IX racked up an annualized yield of 36.9 percent.

But recently, Sternlicht has had difficulty living up to that moniker, at least in New York City.

In the past three years, the company bought just one major property here — the Herald Square Old Navy Building on West 34th Street — that it picked up in 2014 and promptly flipped. It’s not for a lack of capital: Sternlicht recently raised another $5.5 billion fund, explaining at NYU’s hospitality conference in June that he “raised large funds from investors that have kind of tossed in the towel” on fixed-income assets and are instead turning to real estate.

But Sternlicht and many of his peers in the highlevel real estate investment world face a dilemma. While raising capital has almost never been easier for private funds and REITs, it is increasingly difficult to find profitable investment opportunities in major markets like New York City.

Scott Robinson, director of the REIT Center at NYU’s Schack Institute of Real Estate, noted that capital is always easiest to raise when “you are on the significant side of the upside of a cycle.”

“But when you are near the top, yields are getting compressed and it becomes tougher to meet yield requirements,” he said.

I

Hunting, no gathering The what-to-do-with-all-this-capital dilemma is a pervasive one in the industry these days.

Private real estate funds have more money to spend than ever, according to new data by Preqin, a research firm that covers the private equity industry.

In addition to Starwood, plenty of other mega funds are sitting on piles of cash. For example, the Blackstone Group, the behemoth private equity firm, raised $14.5 billion from institutions for a new global real estate fund this spring, and the global real estate investment management firm Westbrook Partners raised nearly $700 million for its 10th real estate fund in January.

A flood of capital coupled with limited investment opportunities could be a recipe for a bubble, prompting funds to overpay for properties just so they can deploy their capital.

However, fund managers are finding it harder to secure good deals, according to a survey by Preqin in late 2014.

A full 74 percent of fund managers surveyed said the competition for core assets increased between late 2013 and late 2014, and 55 percent said finding investment opportunities was harder than in the past.

Much of this growth in competition — and resulting decline in returns — is the result of an influx of foreign investors, said Greg MacKinnon, head of research at

the global institutional real estate investment industry.

“Whereas a U.S. investor may look at current prices of core properties in major markets as overpriced, some Asian investors might look at exactly the same properties and see them as fairly priced,” he wrote in a recent report published by Preqin.

Like private funds, REITs are facing a similar problem when it comes to finding deals with serious upside potential.

On aggregate, REITs have seen their balance sheets swell over the past several quarters. But the companies are also having a harder time justifying purchases in gateway cities. For example, Anthony Malkin of Empire State Realty Trust, which owns the Empire State Building, said he’s no longer bidding on open-market deals in Manhattan because prices are too high (see related story on page 32) And American Realty Capital’s New York REIT, one of the most aggressive investors in Manhattan over the past two years, recently came under fire from some of its shareholders urging it to sell some New York assets (see related story on page 50).

“The New York City commercial real estate market will not stay hot forever,” shareholder Gregory Cohen wrote in a letter to the REIT’s management.

New game plan So what is a private fund or REIT to do without attractive investments to plow capital into?

Observers say they have three main choices: stop fundraising, lower their investors’ return expectations, or venture into new types of deals or markets. Most funds go with the latter two options.

Andrew Moylan, Preqin’s head of real estate asset Continued on page 102

Pension Real Estate Association, a trade group representing www.TheRealDeal.com August 2015 53

?24B9.A6;4 ?2.9 2@A.A2

Lenders go high-tech to spot borrowers’ lies I

BY KENNETH HARNEY t’s one of the most common lies that home buyers tell mortgage lenders, and it may be on the upswing: In order to get a lower interest rate and down payment, applicants say they plan to occupy the home as a principal residence, when in fact they have no such intention.

The incidence of occupancy misrepresentation rose 20 percent between 2011 and 2013, according to giant investor Fannie Mae’s latest sampling of loans involving known fraud.

Lenders and loan officers confirm that they regularly encounter falsehoods about occupancy. “I probably have someone try to tell me that [the home] will be owner-occupied twice a month, and [I] know darn well it isn’t,” said Paul Skeens, president of Colonial Mortgage Group in Waldorf, Maryland.

He then tries to “guide them through the nuances,” by explaining that occupancy misrepresentation is illegal and not worth the risk.

Freddie Mac, the nation’s second largest mortgage investor, says it has not seen a recent spike in occupancy fraud, “but it’s always been a consistent misrepresentation in loan files and we’re concerned about it,” according to Jenny Brawley, a fraud investigator at the company.

Fibbing about occupancy plans has long been a

the highest rates of occupancy fraud. According to Interthinx, a financial services analytics firm, in the last quarter of 2014, Miami had the highest rate of occupancy misrepresentation on mortgages, followed by Los Angeles. Two other California markets — San Diego and Fresno — ranked in the top 10 markets nationwide.

But what loan applicants may not know is that lenders increasingly are using more sophisticated methods to sniff out lies, and they are coming after perpetrators.

Previously, lenders might have employed teams of “door knockers” to visit houses to see if the borrowers listed on the mortgage actually lived in the houses they financed. Or they might have run spot checks on loans using tax, postal and motor-vehicle record databases.

Now lenders have gone high-tech. Companies such as LexisNexis Risk Solutions recently started providing digital programs that instantly tap into multiple proprietary and public data resources, then use algorithms to pinpoint borrowers who likely lied on their applications.

Tim Coyle, senior director for financial services at LexisNexis Risk Solutions, said the company’s popular occupancy-fraud detection tool for banks and mortgage companies accesses 16 different

4<C2?;:2;A /?623@ RFP to seek builder for Hell’s Kitchen lot The city Economic Development Corp. will soon issue an RFP seeking a builder for an all-affordable residential building on a city-owned parking lot at 11th Avenue at West 39th Street in Hell’s Kitchen. The plan to build on the lot, now used mainly to park Police Department vehicles, has the support of the local community board, which sent a letter in favor of the plan in May, citing rising rents and A city lot at 11th Avenue and 39th an increase in market rate residential Street will see new housing. units going up in the area. The building will also include commercial and community space, according to DNAinfo. The EDC said it aims for 100 percent affordable housing, but the portion will depend on the developer’s plans.

Audit finds statistics are the only thing NYCHA fixed An audit uncovered evidence that NYCHA officials, rather than making repairs on the city’s public housing developments, in many cases used administrative tricks to reduce the number of repairs in the agency’s backlog. City Comptroller Scott Stringer’s office found NYCHA habitually counted jobs as complete in cases where staff arrived to perform repairs to find tenants not at home, even when no actual work was done, the New York Daily News reported. The incomplete jobs involved missing carbon monoxide detectors, leaky ceilings, faulty stoves, asbestos and other safety matters. Housing offi- Scott Stringer cials acknowledged slow progress resolving the backlog, which stood at 420,000 jobs in 2013. Under Mayor Bill de Blasio, the agency claimed it reduced the backlog to 120,000 jobs, but Stringer’s audit cast doubt on the accuracy of that figure.

Mayor defends housing lottery policy

What loan applicants may not know is that lenders increasingly are using more sophisticated methods to sniff out lies, and they are coming after perpetrators. temptation for small investors who buy and fix up single-family homes for rental and for second-home buyers who plan to rent out their properties for part of the year. Depending on the lender, they might be able to save a half to a full percentage point off the interest rate on the loan by calling their purchase a principal residence. Plus, they stand to save thousands of dollars on the down payment, which in the case of a mortgage backed by the Federal Housing Administration, could go as low as 3.5 percent instead of 10-to-20 percent or higher in the conventional, non-government marketplace.

With the rapid rise of rental investment groups and conversions of foreclosed homes into rental properties following the housing collapse, it’s not surprising that there may have been more misrepresentation about occupancy in recent years compared with earlier periods. Industry estimates suggest that 3.2 million single-family rental units were added between 2006 and 2012.

Metropolitan areas that saw high numbers of foreclosures and short sales, such as Florida and California, tend to rank among the markets with

data resources to discover misrepresentations by borrowers. Since the program is proprietary and has a patent pending, Coyle would not divulge which databases it uses. But he confirmed that they include credit bureau files, utilities bills, federal and local tax data, and a variety of other information.

What happens to borrowers who lie about property use and subsequently are found out?

Usually it’s not pretty. Lenders can call the loan, demanding immediate, full payment of the outstanding mortgage balance. If the borrowers can’t afford to or refuse to pay, the lender typically moves to foreclose, wrecking whatever plans of long-term investment or vacation-rental-home ownership the borrowers might have had.

In cases involving multiple misrepresentations, lenders can also refer the case to the FBI: Lies on mortgage applications are bank fraud and can trigger severe financial penalties, prosecution and prison time if convicted.

Bottom line: Don’t do it.

Kenneth Harney is a syndicated columnist.

TRD’s forum in Shanghai: Sept. 10-12, 2015 | www.TheRealDeal.com/Shanghai 54 August 2015 www.TheRealDeal.com

Mayor de Blasio defended the long-standing policy of reserving 50 percent of affordable units granted in housing lotteries for residents in response to a new lawsuit. The AntiDiscrimination Center, led by Craig Gurian, executive director, filed suit in federal court last month, claiming the so-called “outsider restriction policy” discriminates against minorities, Craig Gurian who the advocacy group claimed are concentrated in a relatively small number of communities, Capital New York reported. If the suit succeeds, it could hamper the mayor’s drive to create new affordable housing by removing a crucial political incentive for local leaders, who would no longer be able to guarantee a minimum number of affordable lottery units for constituents.

More criticism of city’s Sandy recovery efforts New York’s Hurricane Sandy recovery program, Build it Back, continues to face harsh criticism from local residents and city and federal officials. Staten Island Borough President James Oddo denounced the city’s efforts in profane terms in a meeting with city officials earlier this summer. That followed criticism from federal housing officials, who said de Blasio’s administration is moving too slowly to repair homes and compensate residents, the Wall Street Journal reported. The city has built 779 homes, disbursed 3,968 checks and spent around $250 million of $1.7 billion earmarked to rebuild single-family homes.

Critics say New York State and New Jersey A home destroyed by Sandy have distributed a much larger proportion of planned aid than the city. The mayor, whose administration harshly criticized how the Bloomberg administration handled Sandy relief, defended his team’s efforts, citing reduced red tape and a recent influx of federal cash for repairs. Compiled by Ariel Stulberg

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AG repeals limits on FOIL requests for condo plans Agency changes tune, saying ‘less restrictive means exist to ensure compliance’

BY WILL PARKER he New York State Attorney General’s office repealed a measure limiting the disclosure of condominium offering plans, according to a new memo released in July.

In May, the office’s Real Estate Finance Bureau issued a memorandum stating that it would deny future requests to view condominium offering plans not yet approved for official filing. These plans had

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Condo offering plans are not digitized, and must be reviewed in person in hard copy.

Right, Erica Buckley, chief of the Real Estate Finance Bureau.

previously been available to the public when requests to see them were filed under the Freedom of Information Law. The action to limit the disclosure of these plans, which the director of the New York State Committee on Open Government, Robert Freeman, called “contrary to law,” meant that information regard-

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ing pricing, floor plans and other details of future condo buildings would stay sealed until plans were officially approved.

The office justified the scaling back of disclosures as compliance with certain provisions of the Martin Act — laws that, among other things, regulate the marketing of real estate securities before they have been approved by the attorney general.

Less than two months later, the decision to block condo FOILers was nixed.

In early July, the Real Estate Finance Bureau repealed the May memorandum by issuing a new one, this time with the opinion that “less restrictive means exist to ensure compliance” with the General Business Laws included within the Martin Act. Although neither the May nor the July memoranda specify additional reasons for limiting plan disclosures apart from compliance with the Martin Act, some speculated that the system was being abused by brokers and other industry professionals seeking to get early information about pricing on new development projects. An attorney told TRD that many developers were concerned that early reveals of pricing were allowing their competitors to change their own strategies and pricing in response to what they found in pre-approved plans.

In addition, it is well known that the bureau has experienced a tremendous uptick in submitted condominium plans in recent years.

The New York Times reported last year that the office saw 661 projects with a total sellout of $20 billion in 2013 alone.

Plans and information made available to the public are typically not digitized, so those who wish to see detailed plans must review them in person in hard copy.

When plans change, amendments are created, which must also be reviewed by the Real Estate Finance Bureau. These amendments, too, can be attained by the public via FOIL requests.

FOIL requests for offering plans will presumably now be attended to as they were before, and the repeal of the May decision concludes by stating that such requests “will continue to be evaluated on a caseby-case basis.”

The Attorney General’s Office declined to comment. TRD

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New zoning chair to use post as platform City Council’s Donovan Richards plans to be a neighborhood advocate as he leads key panel

BY TESS HOFMANN he new chair of the City Council’s subcommittee on zoning and franchises plans to use the position to advocate for affordable housing, transportation improvements and other progressive causes.

Though just 32, Donovan Richards has already worked in city government for 12 years, beginning as an intern under thenCity Council Member James Sanders, for whom he worked his way up to chief of staff.

Richards was elected in 2013 in a special election to replace Sanders, who is now a state senator, representing southeastern Queens.

He is also pursuing a bachelor’s degree in aviation and airway management, which he is set to finish next year.

“Why not manage an airport?” he asked.

“I find it very amazing to see how airports run.” He’s also long believed that John F. Kennedy International Airport, which is in his district, could help the surrounding area by offering more job opportunities. “I wanted to be a voice there and ensure that those opportunities made it out.”

Richards chaired the environmental protection committee prior to his current

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post, and co-chairs the Council’s progressive his friend’s memory, he decided to give volcaucus. He was also the sole elected official unteering a try. Eight months later, Sanders to serve in an advisory role for Mayor Bill de hired him as a full-time community liaison.

When he was a staffer for Sanders, he Blasio’s OneNYC plan, the blueprint for waste lived in an affordable housing complex called reduction, increasing resiliency Arverne View in Rockaway. and strengthening the job and “It was a beautiful thing. It was a beachhousing markets. front property,” he said. He paid $860 for an Sanders said Richards oceanfront, terraced two-bedroom. learned important lessons as Topping Richards’ agenda now a member of his staff. “He is are affordable housing, public well aware of the baltransit and participatory budance that has to be geting. He said he intends to made between the use his new post to reach out business community to communities and get as and social good. He much input as possible on has been taught that proposed rezoning plans, we can do both — we Donovan Richards particularly in the areas can do social good that de Blasio picked as potential epicenand not kill the golden goose,” he said.

Richards grew up in southeastern Queens, ters for affordable housing development.

First up is East New York, where the Unione of four children, moving frequently as his young parents struggled financially. In 2003, form Land Use Review Procedure is already the year he turned 20, one of his friends was underway. Other neighborhoods the mayor murdered, inspiring him to attend an an- has tagged include Long Island City, Flushing West, the Bronx’s Jerome Avenue corridor ti-gun violence meeting held by Sanders.

“I was sort of leery, because I was leery of and Staten Island’s Bay Street corridor.

He said the zoning committee under his government.” Donovan said. Motivated by

leadership will make sure that the issues of concern to these communities are on the negotiating table when development plans are worked out. “It worries me that under the prior administration, so much development was happening, but we literally were pushing people out of their neighborhoods.”

He also expressed concern about de Blasio’s proposal to reduce parking requirements at some affordable housing developments. “Just because people live in affordable housing doesn’t mean they don’t drive,” he said, noting that from certain parts of the city, driving is the only practical way to get to work.

From Far Rockaway, he said, “you can get to Florida by plane as quick as you can get to Manhattan by train on some days.”

For what he sees as the “inevitable” upzoning of Midtown East, Richards wants to focus on ensuring that the infrastructure and design of the area support more density.

Manhattan Council Member Daniel Garodnick, who co-chairs the Midtown East rezoning committee, said Richards has shown “he intends to be a hands-on chair, with a willingness to pursue a deep understanding of the issues before the committee.” TRD

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PROFILE

Aurora’s ascent

The under-the-radar firm has quietly built up one of the largest retail pipelines in the city

BY RICH BOCKMANN he Meatpacking District is, of course, one of the city’s most buzzed-about neighborhoods.

Now, one of the most buzzed-about new additions to the area is on its way: a 70,000-square-foot Restoration Hardware.

The high-end home furnishings store — which will replace the pioneering and now-shuttered French bistro Pastis — was the result of a $250 million mega deal.

And the company behind that deal, Aurora Capital, is fueling the continued transformation of a neighborhood that’s recently seen a flood of people headed to the High Line and the new Whitney Museum. In the 20-square-block Meatpacking District alone, the firm has more than 230,000 square feet of retail under development, by far more than anyone else.

And Aurora’s retail development tentacles expand beyond the Meatpacking District. Excluding mega-mall-like developments such as Hudson Yards and the World Trade Center, Aurora has one of the largest — if not the largest — retaildevelopment pipelines in the city with more than 1 million square feet in the works.

“There are one, or two or maybe three players [in the city] who are so tuned into the market and so active that they in effect become the market for retail,” said Tavros Capital partner Nicholas Silvers, a landlord and developer who often compares notes with Aurora after they compete for projects.

In the Meatpacking District, Aurora, which is run by principals Bobby Cayre and Jared Epstein, was ahead of the curve in recognizing that the Whitney, the High Line and Google’s presence would change the neighborhood’s retail landscape, Silvers said.

“They knew all those pieces and connected them way before other people,” he said.

The under-the-radar firm has indeed been on a tear lately. It has 10 major projects under way or planned citywide and is teaming up with heavyweights, including Vornado Realty Trust.

Restoration Hardware will replace the now-shuttered French bistro Pastis in Aurora’s Meatpacking District space on Ninth Avenue.

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The takedown Cayre, 38, is a real estate scion. His father Stanley, along with his two brothers, Joseph and Kenneth, made a fortune in the videodistribution business and parlayed that into investing in real estate projects in New York, Chicago, Los Angeles and Miami in the 1980s.

Those investments were mostly passive, with the Cayres as minority partners.

The elder Cayre generation, for example, was part of a group of investors who bought a $3.2 billion, 99-year-lease for the World 60 August 2015 www.TheRealDeal.com

A rendering of 529 Broadway, which Aurora is developing with Jeff Sutton, Thor Equities and the Adjmi family.

A rendering of the “Solar Carve” next to the High Line. The final tower will be slightly shorter, but will remain largely the same.

Trade Center in 2001, six weeks before the 9/11 terrorist attacks, and part of a team of investors that bought the Sears Tower in 2004. (Joseph Cayre, who heads Midtown Equities, is also an investor and co-founder in the residential brokerage Core).

In 2001, Bobby and his father cofounded Aurora to take on more active investments and lead development projects.

The company closed its first deal in 2003 at 568 Broadway at Prince Street in Soho, paying $87.5 million for a 320,000-square-foot office

Aurora Principal Bobby Cayre

page 30) and Epstein, who joined Aurora in 2007, previously worked for retail broker Jeffrey Roseman at Newmark Grubb Knight Frank.

“They’re facile with retail,” said Paul Pariser, of Taconic Investment Partners, a major player in the neighborhood whose firm sold its headquarters at 111 Eighth Avenue to Google for $1.8 billion in 2010 and co-developed 837 Washington Street, home of Samsung, with Thor Equities.

Taconic and Aurora went “head to head” when they each bid on the land lease for the Meat-

Aurora Principal

building that had a ground-floor retail Jared Epstein packing District’s long-sought-after lease with Eddie Bauer coming due.

Prince Lumber development site, Cayre and his team, who declined to Pariser said. “They took it down,” he added. comment, bought Eddie Bauer out and leased more than 18,500 square feet of the space to Forever 21. They then turned Aurora’s new development pipeline is their attention to the opposite corner of growing in the retail world and beyond.

In Harlem, it’s teaming up with the Adjmi the building, at Crosby Street, where they bought out second-floor office tenants family (Bobby’s uncle and frequent partner) paying roughly $30 per square foot and built to develop a 150,000-square-foot, big-box a two-level, 40,000-square-foot space that space at 5 West 125th Street, where Bed Bath now houses an Equinox gym, which is paying & Beyond is taking 30,000 square feet.

In Brooklyn, it’s constructing a 40,000 roughly $50 per foot on the upper level.

Cayre and his family come from the square-foot home for Whole Foods at 242 Syrian Jewish community with deep roots Bedford Avenue in Williamsburg, part in the retail industry (see related story on of a 280,000-square-foot pipeline being

Prized partners

developed with the Adjmis and other partners in that borough.

And on one of the most prized corners in Soho, on Broadway and Prince, Aurora is co-developing with Jeff Sutton, Thor Equities and the Adjmis a 55,000-squarefoot store that Nike is rumored to be eying.

But the company’s highest concentration of new development is in the Meatpacking District. On top of the 230,000 square feet of retail it’s constructing there, it also has more than 250,000 square feet of office space in the works. The firm is partnering with Vornado to build a 12-story office building atop a retail podium designed by architect Rafael Viñoly at the Prince Lumber site. It’s also developing a 10-story office building (with retail) known as the “Solar Carve” next to the High Line — one of three prime sites the company is developing in partnership with the estate of William Gottlieb.

Gottlieb, a disciple of Harry Helmsley, amassed a huge real estate portfolio that he left to his sister, Mollie Bender, when he died in 1999. But when Bender died eight years later and passed the estate on to her son Neil, it sparked a bitter family feud, with another family member unsuccessfully suing for control of the estate.

Aurora won a major coup when the estate chose to partner with it on several projects.

“Every single major player in the New York City real estate had been trying to get at them forever,” Tavros’ Silvers said. “Obviously, the Gottlieb family could have chosen anyone to partner with.”

Aurora first partnered with the Gottlieb estate in 2012, when it brought the family in as an investor on a deal at Ninth Avenue and 13th Street. Aurora had picked up a ground lease on a pair of buildings there three years earlier and renovated them, signing the cosmetics chain Sephora and the trendy seafood restaurant Catch as tenants.

The two are currently developing 40 Tenth Avenue, the Solar Carve, and “Gansevoort Row,” 30,000 square feet of ground-floor retail stretching 465 feet along Gansevoort Street from Washington to Greenwich streets.

Broker Brian Katz of Katz & Associates — who represented Eastern Mountain Sports in 2008 when Aurora bought the company out its Soho lease to make way for a $100 million deal with Victoria’s Secret — described Aurora as quick to the punch.

“I had just picked up Eastern Mountain Sports and sent out a blast email. Within 60 seconds’ time, my cell phone rang and it was Jared,” he said. “It’s that mentality of, ‘Hey, go get it and take it down and don’t waste any time.’” TRD

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DAY IN THE LIFE OF:

Tim Davis

The Hamptons broker on his budding development business, his five pets and his 30-plus listings

im Davis, 55, has a higher dollar volume of listings in the Hamptons than any of his rival brokers — by a long shot. The Corcoran Group agent had $615 million in listings as of June, according to The Real Deal’s recent ranking of top East End agents. The No. 2 agent on the ranking, Sotheby International Realty’s Harald Grant, had $419 million.

(Furthermore, Davis, who lives and works in Southampton, said that he’s added three off-market listings since then.) The priciest of his listings is the $85 million historic Villa Maria estate, owned by the family of the late shoe mogul Vince Camuto and co-listed with Sotheby’s. But Davis — who worked at Allan M. Schneider Associates for 16 years before Corcoran acquired that firm in 2006 — is doing more than just brokering on the East End. He’s also dabbling in residential development. His first spec home is located in Southampton and is expected to come on the market for nearly $8.8 million this month. And, he and his wife own a ChrisCraft boat and have five pets.

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6 A.M. I wake up to check emails, voicemails and social media for 45 minutes. My morning involves walking and feeding the three dogs (a Havanese puppy, a hound mix and a Pembroke Welsh Corgi) and hopefully getting a message from one of my three children, who are in different places right now.

7 A.M. I work out with a personal trainer at Core Dynamics Gym in Water Mill. I do weight training, aerobics and a lot of corebody training for old people like me.

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8 A.M. I read the newspaper while eating an omelet and drinking a protein shake containing blueberries, almond milk and walnuts.

9 A.M. I start the workday at my home office, which is connected to our master bedroom suite. I set up my schedule the night before, but often things change. I recently received a call from a couple that wanted to look at bayfront Sag Harbor houses asking up to $10 million. They were visiting from Holland and decided on the last day of their two-week vacation that they wanted to buy a house in the Hamptons.

1 P. M. I schedule at least two lunches out a week with brokers, clients and developers.

My favorite places are Sant Ambroeus and Silver’s in Southampton, and Pierre’s and Bobby Van’s Grill & Steakhouse in Bridgehampton.

Davis drives his Range Rover to work.

2 P. M. I try to get out and take a look at something new that’s on the market.

10 A.M. I’ve always got a construction or landscape project going on. For the first time, I’m developing a home on spec. A year ago, I bought a half-acre lot in Southampton Village seven minutes from the ocean. I stop by every day to make decisions and talk to the architect, contractor and design team.

The three-story property is expected to hit the market in August. My son, Jonathan, and I will be the listing brokers. I was going to give it to a Sotheby’s broker, but I thought, “that’s probably not a good idea.”

His $8.8 million Southampton spec house, which will hit the market this month.

11 A.M. I drive to the office in my Range Rover Autobiography. I work with my assistant and my son, who is 26 and has worked with me for two years, to figure out the rest of the day. A fellow broker calls to say, “Can I show you a listing today?” or a potential new client says, “Can you meet with us today?” If somebody wants to look at houses, it’s usually not on a beach day.

If it is, they’re probably a serious buyer. I personally haven’t been to the beach yet this summer. … I can pretty much tell from the broker who calls to sell a house whether or not it’s going to be a waste of someone’s time.

But rather than me saying no — because you never know — I will have someone else [at Corcoran] do the first showing. But for the second and third showing, I’m there.

Sant Ambroeus in Southampton is a favorite restaurant.

4 P. M. In the office, we get notifications about new listings. I handle anywhere between 30 and 40 listings at a given time. I’m quick to contact my customer base about them. It’s a bit of a race, unless you’re the [exclusive] listing broker. Also, I deal with problems, like a deal that isn’t closing for some reason or a tenant issue.

7 P. M. My wife takes the BlackBerry and iPhone out of my hand at dinner. I love to grill whitefish or shrimp. When my children were growing up, I tried to keep my home life very separate from my business life, so I don’t have a lot of friends that are customers and clients. But now we’re entertaining more at home. We have a guest cottage we’ve rented for the past 10 years. This is the first year we’re using it to entertain customers and clients on the weekend.

10 P. M. We let the dogs out and then put them to bed. We also have two cats. I look out at the stars or the planes in the sky from the terrace off of our bedroom. By the time I hit the pillow, I’m exhausted.

By Mark Maurer PHOTOGRAPH OF DAVIS BY ASHLEY WALKER

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WH AT TH E Y ’ R E READING NOW

Real estate pros share picks for fiction and books about creating new uncontested markets and the Stuyvesant Town deal Where do you look for insight and inspiration?

To find out, The Real Deal asks leaders in the industry what they’re reading

Elizabeth Ann Stribling-Kivlan President, Stribling & Associates What are you reading right now?

I am on a fiction binge right now.

I am reading the “Neapolitan Novels” by Elena Ferrante. I cannot stop reading them. I am on the third one now, called “Those Who Leave and Those Who Stay.” I am not sure what I will do between finishing it and the fourth one coming out this fall.

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What spurred you to read that book?

I picked up the first one, “My Brilliant Friend,” at Community Bookstore in Park Slope. There was a sign that said, “No Ferrante spoilers” and I was intrigued. They are the most incredible novels, which trace the story of the lives of two women starting in childhood in Naples in the 1950s.

Has anything you read in it stuck with you? Would you recommend it to others?

They are some of the most brilliantly written stories I have encountered, and I am captivated by the personalities, drive and paths of these incredible characters.

I will recommend them to anyone who will listen.

Rob Lehman

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66 August 2015 www.TheRealDeal.com

Head of Strategy & Sales, Compass What are you reading right now or what did you finish most recently?

I just finished “Blue Ocean Strategy,” by W. Chan Kim and Renee Mauborgne.

It’s a fascinating take on how to deftly sidestep destructive competitive dynamics in markets, and to focus on growing the size of the pie, rather than simply trying to take a larger slice of it.

What spurred you to read that book?

I joined Compass both to build a truly great business and to help make real estate a better industry. What appealed to me about this book is that it engaged with how to make these two goals harmonious, creating new, uncontested market space

that could turbocharge growth and raise the standard of an industry.

Has anything else you read in it stuck with you? Would you recommend it to others?

The power of bold imagination, how the only way to have a transformative impact on an industry is to build a company for the world as it will be in 10 years, not to scrap against the competition today. The example that really stuck with me was Cirque du Soleil. In a declining, widely criticized circus industry that showed no promise of growth, Guy Laliberté created an uncontested market space by starting to play an entirely different game than the incumbent leader Ringling Bros. In a few years, Cirque’s productions had been seen by more than 100 million spectators and exceeded revenues that had taken Ringling Bros. over a century to attain. It inspires me to think of what’s possible in any industry if we all focused on building the next Cirque du Soleil, or inventing the car instead of finding a faster horse.

Aaron Shmulewitz Partner, Belkin Burden Wenig & Goldman What are you reading right now or what did you finish most recently?

I am currently reading “Other People’s Money” by Charles Bagli. It’s an account of the Stuyvesant Town/ Peter Cooper Village deal and the history that led up to it.

What spurred you to read that book?

I’m reading it because I’ve always been fascinated by New York City history, and a sense of “how did we get here.” Also, BBWG has been involved in Stuyvesant Town for many years (and I went to Stuyvesant High School, across the street from the development).

Has anything you read in it stuck with you? Would you recommend it to others?

What seems like a good deal may turn out not to be, nothing lasts forever and protect your downside — all valuable lessons (and highly recommended) for New York City real estate investors, developers and lawyers.TRD Compiled by Ariel Stulberg

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TheRealDeal.com March 2010

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? 2.9 2 @A.A2 5 6@A<?F 1967: QUEENS REZONING OK’D DESPITE OBJECTIONS he city approved the rezoning of a residential block in Flushing, Queens, to allow for the construction of a large commercial project on the site, 48 years ago this month.

The Board of Estimate voted to rezone the block bounded by Union Street, Sanford Avenue, Kissena Boulevard and Barclay Avenue.

At the time, it was home to a convent of the Sisters of St. Joseph.

The $10 million development planned for the site (about $71 million in 2015 dollars), was a four-story, 300,000-square-foot building with a The Sisters of St. Joseph convent was demolished four-level parking garage accommodating to make way for a commercial building.

1,000 cars.

Locals, led by City Planning Commission member Beverly Moss Spatt, argued the project would create noise and traffic problems, unsettling what they described as a stable, middle-class neighborhood and force its inhabitants to the suburbs. The New York Times described opponents’ “tear-stained faces” as they left the meeting after the vote.

The commercial complex built on the site still stands, housing a variety of businesses and organizations, including coffee shops, medical offices, a state Department of Labor office and a Social Security office.

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1936: STRIKE HALTS MANHATTAN AND BRONX BUILDING strike among 12,000 members of the Brotherhood of Painters, Decorators and Paperhangers shut down construction and renovation work throughout Manhattan and the Bronx, 79 years ago this month.

The main demands were an enforcement of the union wage scale, $9 for a seven-hour work day (about $153 in 2015 dollars) and an end to what it called the “kick-back racket” within the industry.

Louis Weinstock, secretary of District Council 9 of the Louis Weinstock painters union, led the fight, arguing that employers, organized as the Association of Master Painters and Decorators, were receiving payments from their workers that undercut the wage scale. Employers nominally paid the full amount, but some workers broke rank from the union and paid back a part of the wage in exchange for getting chosen for jobs. Leaders claimed their members were being underpaid by $2 million a year ($34 million today).

To curtail the practice, the unions demanded the right to choose at least half the workers on a given job.

The strike lasted 10 days, ending with a one-year compromise agreement.

Employers agreed to grant the unions the right to choose 25 percent of the workers on jobs in the two boroughs. And, if any employers were caught violating wage or hour provisions, the union gained the right to choose up to 50 percent of the workers on that site.

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1903: TRIBUNE BUILDING EXPANSION PLANS FILED rchitects D’Oench & Yost and L. Thouyard filed plans to expand the New York Tribune Building, already one of the city’s tallest, to twice its original size, 112 years ago this month.

The Tribune Building The nine-story building, called the “Tall Tower,” would grow more than 100 feet, to 18 stories. The work was projected to cost $350,000 (around $9 million in 2015 dollars).

The Tribune Building, designed by architect Richard Morris Hunt, was built in 1875 as a home for the New York Tribune newspaper. Located at 154 Printing House Square on Nassau and Spruce streets, the building was one of the world’s first high rises. In 1903, the clock tower at the top of the building stood 240 feet above street level.

The project would raise the tower to over 340 feet. The architects also planned to remove the main entrance steps, set the hall flush with the street, and add an elevator.

The impetus for the expansion was largely financial. Like other solid masonry towers — such as the Monroe, the Western Union and the Boreel buildings — the lower floors of the Tribune Tower, the most profitable in terms of rents, lost much space to pillars and supports. Adding extra floors would allow the owners to realize a higher income.

The planned renovation began later that year and was completed in 1905. The Tower was demolished in 1966 to make room for 1 Pace Plaza. Compiled by Ariel Stulberg

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JA M E S G A R D N E R

Spitzer’s first foray ‘socks’ Williamsburg The ex-governor returns to his real estate roots with three waterfront towers hree hulking, deconstructed and the head of Spitzer Engineering (now robotic monsters — I mean that Spitzer Enterprises), was responsible in a good way — will soon rise for no fewer than 15 residential projects over the Williamsburg waterfront. And around the city. But the last of those if the renderings are to be believed, they was undertaken over 18 years ago, and look as though they might be able to lay his son Eliot is now moving into the waste to Lower Manhattan. development game with a daunting The renderings are of developments, project that might tax the skills of many each of them 24 stories tall, at 416-420 a more seasoned developer.

Kent Avenue that will A rendering of the three towers Spitzer plans to build represent former Gov. on the Williamsburg waterfront. Insets: Eliot Spitzer Eliot Spitzer’s maiden and architect Eran Chen of ODA. journey on the road to New York City real estate developer. The architect of the project, Eran Chen, of ODA Architects, describes the design (more gently than I have) as a “molded iceberg, sculpted to create the maximum number of views and outdoor spaces.”

Spitzerville will include a park and an esplanade along the river.

Like the polder system of the Netherlands, which constantly reclaims land from the sea, the grand strategy of New York City’s recent evolution has been determined, over the past decade and more, by the redemption of former industrial zones, long abandoned or underused, in the name of residential development.

And now it is time for the area of This complex is inBrooklyn that sits on either side of tended as a $700 million the Williamsburg Bridge to undergo residential development the transformation that has already whose three towers will been visited upon the Meatpacking comprise 856 rental apartDistrict in Manhattan and Long ments, as well as two rooftop swimming pools.

Island City in Queens.

The best-known project associated Having left politics behind him, with this area is, of course, the Domino Spitzer sails into this project propelled Sugar plant, which sits on the northern by the recent and triumphant sale of side of the Williamsburg Bridge, and the Crown Building — which his father is being converted into an astounding purchased in 1991 — for $1.78 billion, 4,000 new apartment units. most of it pure profit.

He selected ODA Architects to design And now that this other large project at 416-420 Kent is getting the project, a decidedly young firm underway just south of the bridge as founded in 2007 by Eran Chen, who was well, it will be only a short time before previously a principal at the prolific local this entire area is transformed, after team of Perkins/Eastman. In a short the fashion of the High Line, into period, he and his firm have produced an a privileged zone that caters to the impressive roster of striking and original city’s affluent classes (although 20 buildings that are clearly of a piece with percent of Spitzer’s project will include the latest venture designed for Spitzer Enterprises. These include the plans for “affordable” units).

Spitzer, of course, is the scion of a real the as-yet-unbuilt 10 Montieth Street estate family: his father Bernard, who in Bushwick, as well as the very-muchdied in November at age 90, and was completed 15 Union Square West from

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2011, which was designed when Chen was still working for Perkins/Eastman. (Praise can also be given for the completed 100 Norfolk Street, as well as the project for the as-yet-unbuilt 1800 Park Avenue on 125th Street in Harlem.) In these projects, it is easy to see a formal and stylistic continuum that leads right up to Spitzer’s development on Kent Avenue.

The dominant stylistic thrust of those earlier projects, as well as of Kent Avenue, has been a kind of hybrid between Neomodernism and Deconstructivism. The vocabulary is overwhelmingly that of glass and steel, right-angled modules that often collect themselves into curtain-walls.

But the overall shape of the projects is highly irregular and asymmetrical, assuming bold volumetric forms that, despite the modular units that compose them, achieve a real and memorable drama.

The robotic monsters of Kent Avenue do not remind one of the sleek post-industrial robots of recent years, but rather of the “Rock’em Sock’em Robots” of times past, bulky masses

of pure force. The three towers stand near one another, but one is slightly separated from and independent of the other two, which are set side by side. All three are similarly conceived, almost as though each consisted of two slabs pressed together, with each of the pieces mimicking the other in its sundry irregularities. And yet, such is the syncopated massing and rhythm of each of the towers that all three are slightly different in form, even as they are identical in effect.

ODA’s Deconstructivist credentials are proved by the way each of the towers reads almost as though it were a traditional modernist slab that has been warped and bent, all out of shape, as though, within the context of their mid-century machine aesthetic, they underwent an almost organic change that left them in the wayward shape we see in the rendering.

The result is a satisfyingly powerful complex of buildings whose energetic masses will be able to hold their own against the Williamsburg Bridge and the Domino Sugar plant.

T here is also a temptation, which I have no intention of resisting, to discern a link between the form of the buildings and the personality of their developer.

As the former governor famously yelled at former Republican minority leader James Tedisco, “I’m a f **king steamroller, and I’ll roll over you.” As has been stated, these latest towers are similar in style to other works to emerge from the studios of ODA Architects. But it is my suspicion that Eliot Spitzer chose this firm in the first place because something about the pugnacious style that it already displayed in its sundry earlier projects seemed to coincide with some deepseated bent of his character. And it also seems plausible that, through the act and art of the developer, which he has just decided to make his own, he now leaves a more dominant mark upon the landscape of Brooklyn and New York City than he ever had time to do when he was governor of the state. TRD

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Q&A

The ‘forgotten borough’gets noticed Four mega-projects promise a new beginning for Staten Island’s waterfront

BY ARIEL STULBERG he idea that Staten Island’s North Shore will be the city’s next hot market may invoke a few chuckles, given the borough’s backwater reputation. But there’s no doubt that change is coming to the waterfront communities on the island’s North Shore.

Four major projects are underway: the New York Wheel, Empire Outlets and Lighthouse Point on either side of the Staten Island Ferry Terminal in St. George, and the apartment complex URL Staten Island, a mile away at the long-fallow former Navy home port in Stapleton.

Staten Island, with just under 500,000 residents living mainly in single-family homes, is the most suburban of the five boroughs. It certainly has not attracted the attention showered on its hipper, sexier sister boroughs of Brooklyn and Queens, not to mention Manhattan, though some are hoping the wave of development will be a game changer.

“People once thought of Williamsburg, Dumbo, Park Slope and Red Hook as backwaters too,” said James Prendamo, managing director of Casandra Properties.

The Real Deal spoke to elected officials, developers, brokers and community leaders on

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Andrew Gonchar CEO, Shore to Shore Realty Given that three of the big waterfront projects are clearly aimed more at tourists than Staten Island residents, how much can they influence prices and activity for the broader community?

I think if you don’t get the residents, you’re not going to get the tax base. If you don’t get the tax base you’re not going to get the restaurants or the amenities that you require. I don’t think one can survive without the other.

In the spring, an investor purchased an office property on the waterfront for a Staten Island-record $21.5 million.

What is happening in general with the investment sales market on the North Shore? Are prices rising rapidly because of all of the new investment in the area?

The offerings are coming up, but the bids have not really been hit as of yet … once you have the shovel hit the ground, once you really start to see infrastructure coming in, I think you’ll start to see the prices really escalate. Granted, they have gone up tremendously, but I still think that they’ll go much higher.

Much of the retail space in the waterfront neighborhoods that surround these big projects is aging and vacant. Are developers eying these properties for redevelopment? What type of retail do you expect to come in? What prices can developers expect to pay per square foot?

I think the answer is: they’re perfect. If you look at our project with Fishs Eddy, it fits that exact mold. It was a vacant piece of property over there that was dilapidated and run down. I think the problem is that the neighborhood ... they’re not so aggressively looking at change, as the developers and the politicians are. They’re 72 August 2015 www.TheRealDeal.com

the front lines of Staten Island’s redevelopment and found broad optimism for the future.

There is no doubt that concerns remain, including negative public sentiment, as evidenced

by Community Board 1’s recent rejection of Shore to Shore Realty’s planned condo conversion of an old warehouse to condos, and worries about issues like flooding from major storms and that traffic problems will be compounded by strained infrastructure.

Nevertheless, the shovels in the ground at the “core four” projects have already triggered rising real estate prices and speculation on a number of other projects, and with residential and commercial developers buying properties throughout the area, the real estate market appears ready to take off.

“Staten Island is closer to the rest of the country than it is to the rest of the city in many ways, but this corridor is closer to the city than the rest of Staten Island is,” said Borough President James Oddo. “I think now that they’ve discovered Staten Island, more and more off-island folks will continue to come here seeking development opportunities.”

For more on the Staten Island waterfront, we turn to the experts.

being a little hesitant.

I think everybody’s anticipating that you’re going to see $30 to $40 to $50-per-square-foot numbers, when the development process has occurred.

More globally, it’s a combination of the price points changing in other boroughs, literally running out of space in other boroughs and people being intrigued by things like the Wheel and other projects.

Shore to Shore was unable to get Community Board approval for the mixed residential-retail project at the old Fishs Eddy warehouse. What are you planning to do now? Are you concerned that community opposition could make it harder for you to move forward?

You’re always concerned about community opposition. You’re hopeful that the environment calls for what you’re doing.

At this point in time, we haven’t really figured out, 100 percent, a game plan. The problem is that the land use committee voted 7-1 in our favor to approve our project. It was the full board that did not accept their recommendation.

We’re just focusing on other developments. We’re going to let the situation kind of play itself out over there.

A local developer was recently unable to get Community Board approval for a mixed residential-retail project at the old Fishs Eddy warehouse building on Bay Street. Are you concerned that community opposition could make it harder to move forward with future projects?

I think irrational community opposition could make it harder. Rational concerns are always welcome. And we vet it, and that’s how we get to a better project.

If we want to discuss the aesthetics, if we want to say that the terracotta skin they had planned should be replaced by red brick, I’m all up for conversations like that.

If you want to speak erroneously in public and then have it reported on, that this violates existing zoning, that’s incorrect.

James Oddo Borough President, Staten Island In the last few months, four major projects started along Staten Island’s North Shore waterfront. Why do you think these developers have stepped in now? What’s changed in the market on Staten Island or in the city in the last few years?

In truth, this was sort of a shotgun wedding ... The Wheel was [placed] by then-Mayor Michael Bloomberg, “You’re not going to Governors Island, you’re going to Staten Island.” So they really had no choice. It made sense for the Wheel and the Empire Outlets to be attached at the hip. I think it’s just sort of coincidence that the Homeport project, and the Lighthouse Point project are kind of happening at the same time.

Some critics of the developments have also expressed concern that there is no “master plan” and that the added traffic will overwhelm the neighborhood’s infrastructure. Do you think a master plan is needed to address infrastructure issues?

I think ideally, you don’t have four projects happening at once. It sounds great to have a master plan. Sometimes, master plans tend to be too restrictive. I think the thing that we can all agree on is that there has to be some plan.

We do have infrastructure challenges.

The one given is we need a traffic plan, not after these projects have been built and we study to see how bad the damage is. But right now, we need to see what improvements we need to make along the corridor on a small scale to a medium scale in the near term. And that’s something the de Blasio folks are well aware of.

Plans for several other smaller residential developments in the ferry area have

been announced. Are you concerned that there is too much speculation right now, or do you think there is enough residential demand to fill all of these units?

No. I welcome it. Staten Island is overwhelmingly a bedroom community. I am not really interested in establishing new neighborhoods or increasing density in most of Staten Island, because we don’t have the infrastructure to withstand the additional cars.

Along this corridor, we have the ability to draw folks who are much more inclined to use mass transit, who don’t have a problem walking to the ferry and going to Manhattan and the rest of the city. To me, it’s a very different dynamic than the overwhelming majority of Staten Island.

Elysa Goldman Director of Development, Triangle Equities How many more development sites are available in the area, and what sort of projects do you expect to see proposed for the neighborhood?

The Bay Street corridor connecting Lighthouse Point to Stapleton is perfect for additional commercial and residential development, given the strong transit connections, existing infrastructure, and proximity to a strong commercial district anchored by the Richmond County government center. I think we’re going to see more hotel and residential plans being proposed in St. George as well.

Do you think adequate safeguards are being put in place to guard against Sandy-like flooding and related damage from future storms?

Yes, I do. We all saw what happened during Superstorm Sandy and everyone is especially conscious of the vulnerability of the location, like any waterfront location. www.TheRealDeal.com September 2014 83

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Q&A However, leaving a beautiful spot with as much potential as the North Shore underutilized is not the answer.

With three hotels planned for the area, is there a concern about oversaturation?

I think a borough of 470,000 people has significant capacity for hotel room growth. An independent city of similar size generally has over a half dozen significant hotels. Hotel development is vastly important for making this a true destination spot, rather than people taking day trips on the ferry.

Nicholas Siclari Chairman, Community Board 1 What’s changed in the market in the last few years to attract developers to step in on the Staten Island waterfront now?

When CB 1 gave its support to NYC HPD to enter into an agreement to build what is now The Rail [apartment complex] at the former Stapleton parking lot, it caught the attention of developers.

How many more development sites are available in the area, and what sort of projects do you expect to see proposed for these neighborhoods?

There are many opportunities for development in the area. It has long been our belief that Downtown Staten Island should reflect the type of housing and retail found in Brooklyn and lower Manhattan. The North Shore along Bay Street and the Richmond Terrace corridor could and should be a walkable community, so we support development similar to The Rail all along the stretch. We are the one area that is serviced by both bus and train. We are also set up with town centers, which need to be zoned to allow retail at the bottom and several stories of apartments above. This type of zoning will bring the density necessary to support retail. We also believe that the beautiful historic houses further inland and in the hills should be preserved to keep the character of those neighborhoods quaint and bucolic.

A local developer was recently unable to get Community Board approval for a mixed residential-retail project at the old Fishs Eddy warehouse. Are you concerned that community opposition could make it harder to move forward with future projects?

The developer was unable to properly answer the simple questions asked of him and the presentation was very poor. The vote reflected his lack of preparation. We take our job seriously; so advice to future developers — be prepared with a good plan and to answer questions.

74 August 2015 www.TheRealDeal.com

Some have cautioned that the North Shore waterfront, which flooded during Superstorm Sandy, is still vulnerable and is not primed for this type of development.

Do you think adequate safeguards are being put in place to guard against flooding from future storms?

We are working with the Governor’s office to fund projects that will ease flooding. The North Shore Waterfront Greenway, which was born out of CB 1, is a 12-mile-long linear park that would run from Verrazano Narrows to the Goethals Bridge along the waterfront. Some of the plans for the park would help ease flooding. What we found following Superstorm Sandy was that The Rail, which was a relatively new building, did not receive damage from the flood due to the new building requirements. New buildings will have even more strict requirements, so between the two, we think we will fare much better in future storms.

What are some unexpected things you’ve seen in terms of development in the waterfront neighborhoods in the past few months or year?

We were surprised to learn how many young people and seniors were moving off Staten Island due to the lack of rental units. When The Rail filled up so quickly, it showed us that we needed this type of housing here. We were very surprised to learn how many people wanted to live vertically, but were not afforded the opportunity. This is our chance to keep Staten Islanders on Staten Island.

James Prendamano Managing Director, Casandra Properties How much development has the area seen in terms of dollar volume in the last few years and what overall impact do you think these projects are having on the surrounding area?

There has been over a billion dollars in public and private investment in the North Shore. When leading development firms such as Ironstate Development, BFC Partners and Madison Realty Capital and institutional firms such as Goldman Sachs invest in a community, the impact is significant.

Are you concerned that community opposition could make it harder to move forward with future projects?

Much of the successful development of the North Shore occurred because our firm, and the developers we represent, met with the community and addressed their concerns. The open dialogue between the community and the developer has historically resulted in projects that work well for everyone.

Do you think a master plan is needed to address infrastructure issues?

I disagree with the statement that there is no master plan. City Planning had the vision many years ago to rezone St. George and Stapleton, creating special districts to avoid many of those issues. We are seeing responsible development in accordance with those guidelines come to fruition now.

What are some unexpected things you’ve seen in terms of development in the waterfront neighborhoods in the past few months or year?

An influx of international money.

Joseph Ferrara Principal, BFC Partners How many more development sites are available in the area, and what sort of projects do you expect to see proposed for the neighborhood?

I am aware of several large-scale residential projects that are in the pipeline. These projects consist of market rate rental housing with a commercial component on the first floor. Currently there is a rezoning effort being targeted for a stretch of the Bay Street corridor that will convert existing manufacturing zoning to a residential district that will bring rise to at least another 1,000 mixed-income units for the North Shore.

Are prices rising rapidly because of all of the new investment in the area?

There are property owners that have placed properties on the market and have asked an incredibly elevated asking price.

One day, condos will sell at $800+ per square foot and rent for $80+ per foot, but today isn’t that day. The trend is on the uptick, but quite a few million square feet of existing pipeline needs to become reality before we hit the levels of Williamsburg and other trending neighborhoods.

Are you seeing an increased number of properties listed or preparing to sell in anticipation of further development?

Or are sellers holding off?

I find that there is a mix of both. I do know with the rezoning that current building owners are holding out for a bigger bang for their buck. With affordable/mixed-income housing, which will be a required component of the rezoning, there is only so much value that can be assumed in order to bring one of these projects to reality. If property owners are smart about the asset they own, they would be prepared to put together a development plan to be able to build and/or partner with a developer. ... Waiting for a huge payday could be a

mistake, unless someone is willing to wait about seven years.

Do you think adequate safeguards are being put in place to guard against Sandy-like flooding from future storms?

Our project has been designed to deal with occurrences like Superstorm Sandy; we have implemented a “crash wall” that will protect the existing MTA building and surrounding track area that we will bridge over during our construction process. Our entire project has been elevated due to the new FEMA flood elevations. During Superstorm Sandy, [our] building on Bay Street took on 3 feet of water across the entire first floor, and with smart planning, like elevating all mechanical equipment above the first floor, we had that building up and running six hours after the waters subsided. All new projects need to address these issues if one wants to maximize the life of their property.

Cesar Claro President, Staten Island Economic Development Corp.

What’s changed in the market in the last few years to attract developers to step in on the Staten Island waterfront now?

In 2007, the Staten Island EDC issued a report showing how development can take place on these sites. We brought the study to NYC EDC, who eventually released an RFP to developers, which ultimately led to these developments.

Given that three of the new projects are clearly aimed more at tourists than residents, how much can they influence prices and activity for the broader community?

Right now, we expect the tourist activity to be aimed exclusively at the Wheel, Empire Outlets and Lighthouse Point. For it to spill over the broader community will require a bigger plan.

Do you think a master plan is needed to address infrastructure issues?

Many of us have waited decades for this development. Is it happening before a traffic plan and master plan are in place?

Yes. But that will come in time. Traffic is the biggest impediment and there will be some very difficult days ahead, but I expect the powers that be will eventually put a plan together.

What are some unexpected things you’ve seen in terms of development in the waterfront neighborhoods in the past few months or year?

An increase in requests for space by industrial firms. TRD www.TheRealDeal.com July 2013 65

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ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY STATING REPRESENTATION OF THE DEVELOPER. FOR CORRECT REPRESENTATIONS, MAKE REFERENCE TO THIS BROCHURE AND TO THE DOCUMENTS REQUIRED BY SECTION 718.503, FLORIDA STATUTES, TO BE FURNISHED BY DEVELOPER TO A BUYER OR LESSEE. THE PROPERTIES OR INTEREST DESCRIBED HEREIN ARE NOT REGISTERED WITH THE GOVERNMENTS OF ANY STATE OUTSIDE OF THE STATE OF FLORIDA. THIS ADVERTISEMENT DOES NOT CONSTITUTE AN OFFER TO ANY RESIDENTS OF NJ, CT. HI, ID, IL, OR ANY OTHER JURISDICTION WHERE PROHIBITED, UNLESS THE PROPERTY HAS BEEN REGISTERED OR EXEMPTIONS ARE AVAILABLE. PLANS, FEATURES AND AMENITIES SUBJECT TO CHANGE WITHOUT NOTICE. ALL ILLUSTRATIONS AND PLANS ARE ARTIST CONCEPTUAL RENDERINGS AND ARE SUBJECT TO CHANGE WITHOUT NOTICE. CONRAD® IS A REGISTERED TRADEMARK OF HLT CONRAD IP, LLC, AN AFFILIATE OF HILTON WORLDWIDE INC. (“HILTON”). THE RESIDENCES ARE NOT OWNED, DEVELOPED, OR SOLD

BY HILTON AND HILTON DOES NOT MAKE ANY REPRESENTATIONS, WARRANTIES OR GUARANTIES WHATSOEVER WITH RESPECT TO THE RESIDENCES. THE DEVELOPER USES THE CONRAD® BRAND NAME AND CERTAIN CONRAD TRADEMARKS (THE “TRADEMARKS”) UNDER A LIMITED, NON-EXCLUSIVE, NON-TRANSFERABLE LICENSE FROM HILTON. THE LICENSE MAY BE TERMINATED OR MAY EXPIRE WITHOUT RENEWAL, IN WHICH CASE THE RESIDENCES WILL NOT BE IDENTIFIED AS A CONRAD BRANDED PROJECT OR HAVE ANY RIGHTS TO USE THE TRADEMARKS.

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

SOUTH FLORIDA REPORT

Fine spec home asks $30M New York real estate tycoon Peter Fineâ&#x20AC;&#x2122;s first spec home in Miami Beach is set to hit the market, asking $30.5 million, The Real Deal has learned.

The seven-bedroom, eight-bath estate is under construction, with completion expected in November. It will have a 2,500-squarefoot roof deck, an expandable garage for up to six cars, 12-foot tall sliding glass walls and

Peter Fine, inset, is asking $30 million for his spec house at 6220 North Bay Road.

The 15,000-square-foot mansion, at 6440 North Bay Road, will be listed by Darin Tansey of the Tansey Group at Douglas Elliman, said Josh Young, vice president of Fineâ&#x20AC;&#x2122;s To Better Days Development.

100 feet of frontage on Biscayne Bay. Fine launched To Better Days earlier this year, with

plans to develop ultra-luxury waterfront City Centre adds luxury brands mansions on ritzy North Bay Road and on Brickell City Centre has added a series of Miami Beachâ&#x20AC;&#x2122;s Palm Island. luxury brands to its retail lineup.

So far, the firm purchased four sites in The projectâ&#x20AC;&#x2122;s developer, Swire Properties, Miami Beach, including 6010 North Bay and retail co-developers Whitman Family Road, a formerly unbuilt lot where con- Development and Simon Property Group, struction started on another home, with completion expected next year; 158 Palm Island and 6342 North Bay Road, bought in May for $9.5 million.

Fine has a long history in real estate development and management in the New York area. He developed about 9,000 multifamily units over 20 years, mostly under Anchored by Saks Fifth Avenue, Brickell City Centreâ&#x20AC;&#x2122;s retail complex will include other luxury brands from around the world when it opens in 2016. the banner of the Atlantic Development Group, where he is announced last month that Valentino CEO. The companyâ&#x20AC;&#x2122;s holdings also in- and Chopard will be among the luxury clude 300,000 square feet of retail space boutiques in the mall portion of the $1.05 in New York City. billion mixed-use development.

The Italian fashion house and Swiss watch and jewelry designer will join anchor tenant Saks Fifth Avenue in Brickell City Centreâ&#x20AC;&#x2122;s 500,000-square-foot shopping center when it opens in fall 2016.

Also on tap are U.S.-based footwear and accessories maker Cole Haan, Canadian yoga and athletic apparel retailer lululemon, Important News Italian sunglass retailer Illesteva, Italian casualwear brand Harmont & Blaine and Colombian swimwear designer OndadeMar, the developers said.

The space will also host a mix of ďŹ ne dining, casual fare and new international food purveyors.

Brickell City Centreâ&#x20AC;&#x2122;s two condominium towers, two ofďŹ ce buildings and its EAST Miami Hotel will accompany the shopping center. The mixed-use projectâ&#x20AC;&#x2122;s condo, ofďŹ ce, and hotel components are set to start opening at the end of the year. Condos in the towers are listed from $550,000 to $2.7 million.

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For the 12th consecutive month, Brazil was the No. 1 foreign country dominating searches for South Florida real estate online in May, according to the Miami Association of Realtors.

Over the past year and a half, Brazil has led the list for all but three months. Colombia, Canada, Venezuela and Argentina made up the rest of the top ďŹ ve for May. In 2014, Brazilians registered 11 percent of all South Florida international real estate deals. They spend the most on South Florida properties among foreign buyers, paying an average of $495,000, compared with $444,000 for all international buyers.

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Oral representations cannot be relied upon as correctly stating representations of the developer. For correct representations, make reference to this brochure and the documents required by Section 718.503, Florida Statutes, to be furnished by a developer to a buyer or lessee. This offering is void where prohibited by law. Your eligibility for purchase will depend upon your state or territory of residency.

A RRERF FL Condo Owner, LLC project. The Residences at W Fort Lauderdale are not owned, developed or sold by Starwood Hotels & Resorts Worldwide, Inc., W Hotel Management, Inc. or their affiliates, nor by The Related Companies or The Related Group. This condominium is marketing using the W速 trademarks and trade names under a license from Starwood Hotels & Resorts Worldwide, Inc. If this license is terminated or expires without renewal, the residential project will no longer be associated with, or have any right to use, the W速 brand trade names or trademarks. The Residences at W Fort Lauderdale are owned and sold by RRERF FL Condo Owner, LLC, which is a bulk buyer as provided in 718.704(3).

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

?2=<?A Real estate prices in Seattle have reached new heights.

Playwright, actor and all-around entertainment mogul Tyler Perry listed his palatial 34,688square-foot Atlanta home. The seven-bedroom, 11.5-bathroom house features a doubleheight foyer, reception area and family room, massive swimming pool, underground ballroom with catering kitchen, fitness center and spa, home theatre, “presidentiallevel security system” and much more. It’s listed at $25 million.

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.

SEATTLE emand from tech workers and foreign buyers is pushing Seattle real estate prices to new heights.

Pending home sales in the Seattle area rose 16 percent in June to their highest level in almost a decade. Residential inventory is at its lowest level since 2007. Median single-family home prices reached a record $575,000, more than double the national average, and up at least 13 percent from a year earlier in each of the last five

D

CHICAGO

Mid-century ranch and split-level homes in the suburbs north of Chicago are seeing an influx of new buyers.

The suburbs north of Chicago are experiencing a buying boom as young families and first-time homebuyers seek smaller, more affordable homes. While million-dollar homes closer to Lake Michigan are seeing weak demand and price reductions, there’s a surge of interest in towns like Morton Grove, Niles and parts of Skokie and Wilmette.

One broker called it “a new suburban wave,” Chicago Magazine reported. Average sales prices in those towns rose nearly 12 percent in the first quarter compared with last year, on top of double-digit gains from 2012 to 2013.

Average time on the market for the mostly mid-20thcentury split-level and ranch homes dropped by half from 2012 to 2014. These changes strike a contrast with national trends for housing demand in city centers, but reflect rising interest in smaller, more affordable family homes.

WASHINGTON D.C. Maryland’s suburban office parks are losing tenants, especially government leases.

Office parks north of Washington D.C. in Montgomery County, Maryland, are facing dire times. A county Planning Department study found a dozen empty office build78 August 2015 www.TheRealDeal.com

Atlanta

months, according to a report in Bloomberg Business.

While still far short of the $1 million median in San Francisco, Seattle seems in some ways to be following in that city’s development path. Prices are being driven in large part by workers at companies like Amazon, Google, Facebook and Seattle-based Zillow, and by Chinese and other foreign buyers seeking investment properties and homes for their expat children.

ings and major tenants downsizing their leases at the county’s office parks, amid a national trend toward urban, walkable, mixed-use office space, the Washington Post reported. The federal government, the largest tenant in the county, could reduce its leased office space by 1.1 million square feet over the next five years. Federal leases expire for 2.4 million square feet this year alone, and while some leases were extended, it was generally for 10 to 25 percent less space. The county includes the suburbs of Bethesda and Silver Spring, but the worst hit areas are further afield, outside the D.C. beltway. Office parks in those areas, accessible only by car, fail to meet the needs of employees seeking smaller spaces with modern amenities and access to public transportation.

JACKSON, MISSISSIPPI

Jackson, Mississippi, is the city with the fastest rising rent prices in the nation.

The fastest growth in rental prices nationwide is in the unlikely real estate hot spot of Jackson, Mississippi, a recent survey found. Homes there are renting for $1,169 per month on average, 23 percent higher than last year.

Another off-the-radar market, Portland, Maine, was No. 2, with prices up 17 percent. Nationally, rents rose by a seasonally adjusted 4.3 percent over last year, the survey

by Zillow found. The robust price growth alarmed some analysts, the Associated Press reported. Wages are growing only half as quickly. The survey found 73 percent of renters must make financial trade-offs like taking a second job or taking on credit card debt to pay the rent. And while the industry recorded a 5.1 percent national increase in home sales in May, 61 percent of Americans say the U.S. is still in the grip of a housing crisis. Compiled by Ariel Stulberg

Aspen Supermodel Elle Macpherson listed her seven-bedroom, 10-bathroom house on 66 gated acres in Aspen for $35 million. The mansion, built in 2004 and once owned by Saudi Prince Bandar bin Sultan, features an indoor pool, French limestone floors, commercial kitchen, gym with steam room and hot tub, juice bar and two elevators.

Fort Lauderdale, Florida “Partridge Family” actor, singer and former teen idol David Cassidy woke up in debt earlier this year and after being forced to declare bankruptcy will auction his six-bedroom, six-bathroom, 6,400-squarefoot home on Fort Lauderdale’s Harbor Beach. The house, which Cassidy bought for $1.1 million in 2001, features 130 feet of private beachfront, a chef’s kitchen, pool and gazebo.

Montecito, California Academy Award-winning actor Jeff Bridges is selling the 19.5-acre estate where “The Dude” and his family have abided for two decades. The property, listed for $29.5 million, includes a 9,500-square-foot Tuscaninspired house with five bedrooms, five bathrooms, recording studio, greenhouse and small vineyard. The property overlooks the Montecito and Channel islands and offers multiple waterfront views.

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COLDWELL BANKER RESIDENTIAL REAL ESTATE

SCORECARD

The second quarter brought historic changes to the Manhattan residential market, with record sale prices alongside the first-ever freeze in stabilized rents. In the commercial markets, foreign investors joined the front of the investment sales pack, and strong demand for space continued to push asking office rents to new heights.

RESIDENTIAL RECORDS AND FREEZES

Closed sales by price category QTR 2 2015

$0-$500k $500k-$1M

QTR 2 2014

16%

$1M-$2M $2M-$3M $3M-$5M $5M+

39%

20%

24%

36%

0

20

25%

40

60

6%

9% 6%

9% 7% 80

3%

100

The share of $5M+ home sales in Manhattan has doubled, according to a Bond New York report, accounting for 6 percent of total sales in the second quarter of 2015. and 6 percent in the 2015 second quarter.

1.00% 0.00% 2000

2005

2010

2015

2016

Source: StreetEasy/New York City Rent Guidelines Board

Median rental price and new rental supply in Manhattan Median rental price

# of new rentals

$3,700

6,000

$3,460

4,800

$3,220

3,600

$2,980

2,400

$2,740

1,200

$2,500

0

comparisons for the 16th consecutive month. TRD

Jun 15

Average sales prices

Source: Brown Harris Stevens

Apr 15

Median sales prices

May 15

$0

2.00%

Mar 15

$200, 000

3.00%

Jan 15

$400, 000

Feb 15

$800, 000 $600, 000

4.00%

Dec 14

$920, 700

Oct 14

$890, 000

Nov 14

$1, 000, 000

5.00%

Sep 14

$1, 200, 000

Jul 14

$1, 400, 000

For the first time ever, the NYC Rent Guidelines Board voted for a 0% increase in annual rent for stabilized apartments where tenants signed one-year leases.

The chart shows the historic rates for one-year leases without landlord-provided heat.

6.00%

Aug 14

$1, 565, 471 $1, 573, 404

Jun 14

$1, 800, 000 $1, 600, 000

Annual stabilized rent increases since 2000

Apr 14

Q2 2015

ALEKSANDRA SCEPANOVIC, IDEAL PROPERTIES GROUP

May 14

Q1 2015

A

Mar 14

Median and average resale apartment prices hit a record in Q2

“The rent freeze is expected to put the ‘fierce’ into competition.”

Jan 14

GREGORY HEYM, BROWN HARRIS STEVENS

BY WILL PARKER partment resale prices reached an all-time high in the three months ending June 30, climbing to $1.57 million on average, according to a report from Brown Harris Stevens.

The median reached $920,700, while total closings were down 10 percent from the same period last year.

“Sellers are not cutting prices, even though we’re seeing fewer sales,” said Gregory Heym, an executive vice president at BHS. In another leap, the $5 million-and-over sales market accounted for twice the share of closed sales compared to a year ago, making up 6 percent of the total in Manhattan.

As sale prices swelled, the New York City Rent Guidelines Board voted for the first stabilized rent freeze in history in June, affecting more than one million New York apartments. But staking out a rent-stabilized unit is easier said than done. “With the numbers of stabilized apartments dwindling, the rent freeze is expected to put the ‘fierce’ into competition,” said Aleksandra Scepanovic, managing director at Ideal Properties Group.

Meanwhile, rents for market-rate apartments continued to climb. A report by Douglas Elliman found that Manhattan median rents rose in year-over-year

Feb 14

“Sellers are not cutting prices, even though we’re seeing fewer sales.”

MANHATTAN RENTALS

Maximum Annual Rent Increase ( Rent Regulated Units)

MANHATTAN SALES

Source: Douglas Elliman/Miller Samuel

Source: Bond New York

COMMERCIAL GOING GLOBAL

INVESTMENT SALES

COMMERCIAL LEASING

Profile of investors based on Manhattan purchases

2015 buyers so far

S

The share of foreign investors in commercial real estate climbed sharply to 42% through the second quarter of 2015, up from 19% of the buyer pool at the end of 2014.

Source: JLL

YTD 2015 Manhattan land/redevelopment investment sales activity # of deals

Midtown

Midtown South

Downtown

25

37

12

Square feet

2,543,698

Dollar volume

$1.1 billion

Total

77

3, 139,309

807,358

6,490,365

$2.5 billion

$382 million

$4 billion

Source: JLL

“Global investors are now at the forefront of deals.”

STEPHEN SHAPIRO, JLL

80 August 2015 www.TheRealDeal.com

Q4

20 10 20 11 Q4 20 11 Q2 20 12 Q4 20 12 Q2 20 13 Q4 20 1 Q2 3 20 14 Q4 20 14 Q2 20 15

$80 $75 $70 $65 $60 $55 $50 $45 $40 $35 $30

Q2

20 10

20 09

Foreign

Private Capital

Q2

42%

20 09

48% Private Capital

63%

Q4

19% Foreign

20 08

REIT

Q2

9%

13% REIT

20 08

5%

$68.47

Q4

Pension Fund 1%

Q2

2014 buyers Pension Fund

Asking office rents on the rise in Manhattan

BY WILL PARKER o far this year, foreign money accounted for more than twice the total investment sales dollars in Manhattan compared to all of 2014, according to a report from JLL. Global investment dollars made up 42 percent of total sales through the second quarter of 2015, compared with 19 percent for all of last year.

The key difference, according to Stephen Shapiro, an executive vice president at JLL, is that foreign investors are now the leading parties on more deals, rather than just backing domestic buyers. With the lure of strong returns involved in such investments, Shapiro said, “global investors are now at the forefront of deals, as opposed to simply participating in the capital stack.”

In leasing, asking rents continued their uninterrupted rise. “Demand is strong and coming from various industries, such as tech, healthcare and creative industries,” said Chemerie Cheng, a managing director in research and consulting at Colliers International.

The report also included a breakdown of tenant leasing during the second quarter, with TAMI (technology, advertising, media and information) and FIRE (financial institutions, insurance, and real estate) accounting for more than 50 percent of total square feet leased. TRD

Manhattan office asking rents are currently on the longest uninterrupted rise since before the recession.

Source: Colliers International

Q2 tenant profile Professional Services

20%

22% Other

20% TAMI (Tech, Advertising, Media and Information)

BY SQUARE FOOTAGE

38% FIRE ( Financial Services, Insurance and Real Estate)

Source: Colliers International

“Demand is strong and coming from various industries.”

CHEMERIE CHENG, COLLIERS INTERNATIONAL

AKA UNITED NATIONS NEW YORK OWNERSHIP FOR THE GLOBAL CITIZEN

FULLY-FURNISHED ONE-BEDROOM LUXURY CONDOMINIUM RESIDENCES For the first time, AKA intends to introduce a limited release of condominium residences at AKA United Nations—a rare opportunity to acquire ownership in the world’s most recognized luxury extended-stay brand. Anticipated in Summer, 2015.

AKA UNITED NATIONS 234 EAST 46TH STREET, NYC ON-SITE SALES GALLERY NOW OPEN BY APPOINTMENT AKAUNITEDNATIONS.COM 917.546.4747

Exclusive sales by Prodigy Realty Developed by Korman Communities/Prodigy Network 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 (CP14-0119). Property address is 234 East 46th Street, New York, NY 10017. Sponsor Name: 234 East 46th Street. Property Owner LLC. Sponsor Address: 40 Wall Street, New York, NY 10005. Equal Housing Opportunity. Images are artist’s renderings.

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 6/15/15 to 7/15/15. Please submit future deals to deals@therealdeal.com.

Office leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

237 Park Avenue

270,000 sf

J. Walter Thompson / Mary Ann Tighe, Gregory Tosko, Lauren Crowley and Brendan Herlihy, CBRE

RXR Realty and Walton Street Capital / RXR Realty

The marketing and communications firm signed a 10-year renewal lease.

888 Seventh Avenue

100,000 sf

TPG Capital / Neil Goldmacher, Newmark Grubb Knight Frank

Vornado Realty Trust / Jared Solomon, Vornado Realty Trust

The DTZ parent company signed a 10-year expansion and renewal lease, of which 20,000 square feet is new.

601 West 36th Street

60,000 sf

Ralph Lauren / David Goldstein, Savills Studley

RXR Realty / in-house

The clothing company signed a lease for an additional 60,000 square feet at the Starrett-Lehigh Building.

241 37th Street (Brooklyn)

55,000 sf

Time / Zev Holzman, Howard Nottingham and Matthew Barlow, Savills Studley

Industry City / Bruce Mosler, Mitchell Arkin, Kelli Berke, Joseph Cirone, Haley Fisher and Mikael Nahmias, Cushman & Wakefield

Time signed a long-term lease at Industry City, where over 300 employees in the company’s Technology, Content Solutions and Editorial Innovation departments will be moving at the end of the year.

111 West 19th Street

46,000 sf

Law360 / Paul Ippolito, Newmark Grubb Knight Frank

Kaufman Organization / Steven Kaufman, Barbara Raskob and Yvonne Chang, Kaufman Organization

The legal news service signed a lease, bringing the building to full occupancy.

Asking rent was in the mid-$60s per square foot.

50 West 23rd Street

43,600 sf

SoundCloud / Eric Ferriello and Bob Tunis, Colliers International

Two Trees Management / Dan Conlon and Elizabeth Bueno, Two Trees Management

The Berlin-based tech company signed a 5-year lease.

250 West 55th Street

30,400 sf

Watson Farley & Williams / Mark Ravesloot, Bill Iacovelli, Michael Wellen and Cara Chayet, CBRE

Durst Organization / Peter Turchin, Christie Harle, Sam Seiler and Caroline Merck, CBRE

The law firm signed a lease for the partial 30th and entire 31st floor of the building.

125 Park Avenue

30,365 sf

Haworth / Jim Wenk and Paul Formichelli, JLL

SL Green Realty / Brett Herschenfeld and Cryder Bancroft, SL Green Realty

The furniture company signed a 10-year lease renewal.

1155 Sixth Avenue

29,000 sf

Keller Williams NYC / Jeffrey Rosenblatt, Coldwell Banker Commercial Alliance

Dow Jones / Chris Mansfield and Ken Rapp, CBRE

The firm signed a lease to move its headquarters and expand to a larger space.

275 Seventh Avenue

28,019 sf

ClassPass / Dennis Someck and Justin Myers, Lee & Associates NYC

Tishman Real Estate Services / Ross Zimbalist, Brian Dooley and Ivan Hillman of CBRE; Joseph Simone, James Fitzgerald and Andrew Kaminsky of Tishman Real Estate Services

The tech company signed a lease for the entire 11th floor.

285 Madison Avenue

18,242 sf

Ziff Capital Partners / Herbert Chou, Warburg Realty

RFR Realty / Alexander Chudnoff, Mitchell Konsker and Dan Turkewitz, JLL; A.J. Camhi, RFR Realty

The firm signed a 10-year, 11-month lease to relocate from 350 Park Avenue.

120 Broadway

16,000 sf

United Synagogue of Conservative Judaism / Marc Shapses and Ira Schuman, Savills Studley

Silverstein Properties / Roger Silverstein, Silverstein Properties

The synagogue signed a 15-year lease.

5 Hanover Square

14,126 sf

Nonprofit Finance Fund / David Lebenstein, Janet Woods and Nicholas Woodhull, DTZ

CIM Group / Todd Stracci, Hal Stein, Travis Wilson and Daniel Appel, Newmark Grubb Knight Frank

The national not-for-profit organization signed a 15-year lease to relocate from 70 West 36th Street, where it had been for almost 20 years.

20 West 22nd Street

11,901 sf

Materne North America / ABS Partners Real Estate

20 West 22nd Street Associates / Jason Fein, Robert Finkelstein, Gregg Schenker, Steven Hornstock and Earle Altman, ABS Partners Real Estate

The company signed a five-year, one-month lease for the entire 12th floor.

640 Fifth Avenue

10,278 sf

Hitchwood Capital Management / Alexander Chudnoff, JLL

Vornado Realty Trust / Jared Solomon and Glen Weiss, Vornado Realty Trust

The firm signed a 10-year, nine-month early renewal lease.

275 Seventh Avenue

10,044 sf

MaxPoint Interactive / Daniel Posy and Jason Roberts, Savills Studley

Tishman Real Estate Services / Ross Zimbalist, Brian Dooley and Ivan Hillman of CBRE; Joseph Simone, James Fitzgerald and Andrew Kaminsky of Tishman Real Estate Services

The digital advertising company signed a lease for part of the 17th floor.

5-25 46th Avenue (Queens)

10,000 sf

Barneys New York / n/a

Plaxall Properties / n/a

Barneys New York signed a lease for manufacturing and office space.

48 West 37th Street

8,749 sf

John B. Murray Architect / David Levy, Adams & Company

Forty Eight Thirty Seven Associates / David Levy, Adams & Company

The architecture firm renewed its lease.

477 Madison Avenue

8,200 sf

Rivkin Radler / Michael Leff, Arthur Mirante and James Lizmi, Avison Young

Shorenstein Realty Services / David Hoffman and Whitnee Williams, DTZ

The Long Island-based law firm signed a lease for the entire 20th floor of the building.

29 West 30th Street

6,400 sf

Cyrus JM Corporation / Elliot Klein, EVO Real Estate Group

29 West LLC / Elliot Klein, EVO Real Estate Group

The jewelry and accessories company renewed its lease.

20 West 22nd Street

5,974 sf

Index Exchange / ABS Partners Real Estate

20 West 22nd Street Associates / Jason Fein, Robert Finkelstein, Gregg Schenker, Steven Hornstock and Earle Altman, ABS Partners Real Estate

The company signed a five-year, one-month lease.

915 Broadway

5,885 sf

Board of Trustees of Leland Stanford Junior University / Aaron Maltz, Newmark Grubb Knight Frank

915 Broadway Associates / Jay Caseley, Carol Sacks and Alex Kaskel, ABS Partners Real Estate

The university signed an eight-year, three-month lease for space on the 18th floor for its Stanford in New York pilot program.

630 Third Avenue

5,829 sf

Sard Verbinnen & Co. / Alan Friedman, ABS Partners Real Estate

n/a / Newmark Grubb Knight Frank

The company signed a four-year lease for the entire 22nd floor.

16 West 36th Street

5,320 sf

Plusgrade US / Nick Zervis, Fountain Realty Group

Kiamie Industries / Howard Epstein, EVO Real Estate Group

The tenant signed a lease.

1000 Dean Street (Brooklyn)

5,193 sf

Pratt Area Community Council / n/a

1000 Dean LLC / Chris Havens, aptsandlofts.com

The tenant signed a 10-year lease to install offices, open spaces, conference room and pantry for a 25-person staff.

15 West 26th Street

4,500 sf

Reflexions Data / ABS Partners Real Estate

n/a / EVO Real Estate Group

The company signed a seven-year, 3-month lease for the entire sixth floor.

82 August 2015 www.TheRealDeal.com

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

320 Park Avenue

3,913 sf

DBV Technologies / John Brod, Charles Conwell and Joseph LaRosa, ABS Partners Real Estate

n/a / JLL

The company signed a two-year, one-month lease for part of the 19th floor.

210 11th Avenue

3,857 sf

Minagawa Art Lines / Joseph La Rosa and Audrey Novoa, ABS Partners Real Estate

Onbar / Joseph LaRosa, Audrey Novoa and Gregg Schenker, ABS Partners Real Estate

The company signed a five-year renewal lease.

110 West 40th Street

3,491 sf

New Leaf Literary & Media / David Levy and Brett Maslin, Adams & Company

One Ten West Fortieth Associates / David Levy and Brett Maslin, Adams & Company

The full service boutique literary firm signed a lease with plans to use the space as general and executive offices for marketing and promotions.

276 Fifth Avenue

3,254 sf

Black Spruce Management / Elliot Klein, EVO Real Estate Group

3 West 35th Co. / Elliot Klein, EVO Real Estate Group

The company signed a lease.

55 West 39th Street

3,250 sf

Velocity Consulting / Howard Epstein, EVO Real Estate Group

Millinery Syndicate / Alan Sinovsky, Steinberg & Pokoik Management

The company signed a lease.

200 Park Avenue South

3,179 sf

Pageant Media / Cresa New York

n/a / Alan Friedman, Charles Conwell, Gregg Schenker, Earle Altman and Steven Hornstock, ABS Partners Real Estate

The company signed a three-year lease.

436 Utica Avenue (Brooklyn)

3,000 sf

Payless / Michael Friedman, In Line Realty

Bawabeh Brothers / Josh Augenbaum Realty

The shoe chain signed a lease.

44 Wall Street

2,941 sf

The Rosen Group / Newmark Grubb Knight Frank

44 Wall Owner / Gregg Schenker, Keith Lipstein, Jason Kreisberg and Joe D’Apice, ABS Partners Real Estate

The company signed a three-year, one-month lease.

126 East 56th Street

2,626 sf

Kinneret / Greg Taubin, Savills Studley

Pearlmark Real Estate Partners / Harry Blair and Sean Kearns, Cushman & Wakefield

The tenant signed a lease for space at Tower 56.

49 West 38th Street

2,500 sf

Anik Architecture / Crosstown Commercial

n/a / Andrew Udis and Ron Zimmerman, ABS Partners Real Estate

The company signed a seven-year lease.

353 Lexington Avenue

2,400 sf

Torrenzano Group / Robert Finkelstein and Jonathan Cohen, ABS Partners Real Estate

353 Lexington Avenue, LLC / Adams & Company and Hilson Management

The company signed a three-year lease.

231 West 29th Street

2,322 sf

Daniel Rainn / James Buslik and Jeff Buslik, Adams & Company

231/249 West 39 Street Associates / James Buslik and Jeff Buslik, Adams & Company

The tenant signed a lease for office and showroom space.

231 West 29th Street

2,078 sf

Kendra Scott Design / James Buslik and Jeff Buslik, Adams & Company

231/249 West 39 Street Associates / James Buslik and Jeff Buslik, Adams & Company

The tenant signed a lease for office and showroom space.

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84 August 2015 www.TheRealDeal.com

1015 Madison Avenue, Suite 501 New York, NY 10075 Tel: 212.999.6105 | Fax: 212.999.4736 www.plazagroupnyc.com

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

110 West 40th Street

2,063 sf

Advance Fashion Technology / David Levy and Brett Maslin, Adams & Company

One Ten West Fortieth Associates / David Levy and Brett Maslin, Adams & Company

The tenant plans to use the space as general and executive offices.

37 West 57th Street

1,838 sf

Shirt Club / Moshe Pinsky, Douglas Elliman

Prospect Resources / Andy Conrad and Matt Coudert, George Comfort & Sons

The custom men’s suit company signed a lease.

530 Seventh Avenue

1,700 sf

U ART RICH / Michael Schoen, Savitt Partners

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

The women’s clothing company signed a lease.

530 Seventh Avenue

1,700 sf

Just for Wraps / Marc Schoen, Savitt Partners

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

The women’s clothing company signed a lease.

110 West 40th Street

1,652 sf

MM Management / David Levy and Brett Maslin, Adams & Company

One Ten West Fortieth Associates / David Levy and Brett Maslin, Adams & Company

The tenant plans to use the space as general and executive offices.

231 West 29th Street

1,594 sf

Anonymous Showroom / James Buslik and Jeff Buslik, Adams & Company

231/249 West 39 Street Associates / James Buslik and Jeff Buslik, Adams & Company

The tenant signed a lease for office and showroom space.

110 West 40th Street

1,587 sf

Brunet and Friedberg / David Levy and Brett Maslin, Adams & Company

One Ten West Fortieth Associates / David Levy and Brett Maslin, Adams & Company

The tenant plans to use the space as general and executive offices.

1 World Trade Center

1,500 sf

Cartridge World / n/a

Servcorp and Durst Organization / n/a

The tenant is the first from the demolished Twin Towers to lease in 1 World Trade. Greg Carafello of Cartridge World, who at the time ran a small color printing business, moved operations to New Jersey following the attacks.

122 Orchard Street

1,400 sf

Oak Labs / Yesim Ak, Misrahi Realty

122-124 Orchard Corp. / Daniel Barcelowsky, Misrahi Realty

Oak Labs signed a lease for the creative office and showroom.

20 West 22nd Street

1,359 sf

Diane Paparo / ABS Partners Real Estate

20 West 22nd Street Associates / Jason Fein, Robert Finkelstein, Gregg Schenker, Steven Hornstock and Earle Altman, ABS Partners Real Estate

The company signed a three-year lease.

45 West 34th Street

1,305 sf

Roku / Ben Fastenberg, CBRE

41 West 34th Street LLC / Richard Price and Dana Moskowitz, EVO Real Estate Group

The tech company signed an expansion lease, bringing its total space to 4,319 square feet.

20 West 22nd Street

1,261 sf

P&W Press / ABS Partners Real Estate

20 West 22nd Street Associates / Jason Fein, Robert Finkelstein, Gregg Schenker, Steven Hornstock and Earle Altman, ABS Partners Real Estate

The company signed a seven-year lease.

20 West 22nd Street

1,249 sf

Transportation Simulation Systems / ABS Partners Real Estate

20 West 22nd Street Associates / Jason Fein, Robert Finkelstein, Gregg Schenker, Steven Hornstock and Earle Altman, ABS Partners Real Estate

The company signed a five-year lease.

231 West 29th Street

1,086 sf

Schneiders Salzburg / James Buslik and Jeff Buslik, Adams & Company

231/249 West 39 Street Associates / James Buslik and Jeff Buslik, Adams & Company

The tenant signed a lease for office and showroom space.

110 West 40th Street

974 sf

Sunnyhaile / David Levy and Brett Maslin, Adams & Company

One Ten West Fortieth Associates / David Levy and Brett Maslin, Adams & Company

The tenant plans to use the space as general and executive offices.

231 West 29th Street

936 sf

True Divinity & Trevormaxx / James Buslik and Jeff Buslik, Adams & Company

231/249 West 39 Street Associates / James Buslik and Jeff Buslik, Adams & Company

The tenant signed a lease for office and showroom space.

231 West 29th Street

890 sf

Elan International / James Buslik and Jeff Buslik, Adams & Company

231/249 West 39 Street Associates / James Buslik and Jeff Buslik, Adams & Company

The tenant signed a lease for an office and showroom for the sale of contemporary wholesale apparel.

231 West 29th Street

842 sf

Chapter One Sportswear / James Buslik and Jeff Buslik, Adams & Company

231/249 West 39 Street Associates / James Buslik and Jeff Buslik, Adams & Company

The tenant signed a lease for the sale of contemporary apparel at wholesale and not retail.

110 West 40th Street

825 sf

KR Intercorp / David Levy and Brett Maslin, Adams & Company

One Ten West Fortieth Associates / David Levy and Brett Maslin, Adams & Company

The tenant plans to use the space as general and executive offices.

270 Madison Avenue

788 sf

Grant McCarthy Group / Cushman & Wakefield

270 Madison Avenue Associates and Independence 270 Madison, LLC / Alex Kaskel, Gregg Schenker, Earle Altman, Steven Hornstock and Peter Burack, ABS Partners Real Estate

The company signed a two-year, one-month lease.

110 West 40th Street

780 sf

Crossover Consulting Group / David Levy and Brett Maslin, Adams & Company

One Ten West Fortieth Associates / David Levy and Brett Maslin, Adams & Company

The tenant plans to use the space as general and executive offices.

8 West 38th Street

725 sf

Axiom Solutions / ABS Partners Real Estate

n/a / Andrew Udis and Ron Zimmerman, ABS Partners Real Estate

The company signed a three-year renewal lease.

110 West 40th Street

445 sf

Vandis / David Levy and Brett Maslin, Adams & Company

One Ten West Fortieth Associates / David Levy and Brett Maslin, Adams & Company

The tenant plans to use the space as general and executive offices.

110 West 40th Street

349 sf

Splash / David Levy and Brett Maslin, Adams & Company

One Ten West Fortieth Associates / David Levy and Brett Maslin, Adams & Company

The tenant plans to use the space as a textile design studio and general offices.

530 Seventh Avenue

n/a sf

Dragon Crowd Garment / n/a

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

The LA-based men’s and boy’s clothing company signed a lease.

Retail leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

195 Broadway

20,344 sf

Anthropologie / Wade McDevitt and Stephen Plourde, McDevitt Company

L&L Holding / Alan Schmerzler and Bradley Mendelson of Cushman & Wakefield; David Berkey of L&L Holding

Anthropologie, a division of Urban Outfitters, signed a lease in the historic building.

86 August 2015 www.TheRealDeal.com

Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

8214 Foster Avenue (Brooklyn)

20,000 sf

AutoZone / Richard Senior, Ripco Real Estate

Jacal Realty and Development / Richard Senior, Ripco Real Estate

AutoZone signed a 15-year lease in Canarsie, Brooklyn.

227 Fourth Avenue (Brooklyn)

16,700 sf

Blink Fitness / Ezra Saff, Retail Zone

Greystone & Company / Brandon Berger, Alex Beard and Eddie Mamiye, RKF

The gym signed a 15-year lease for the entire Brooklyn Lyceum building.

240 West 52nd Street

12,000 sf

Howl at the Moon / Robert Kunikoff and Richard Kave, Lee & Associates NYC

n/a / Victor Menkin, Menkin Realty Services

The club signed a long-term lease.

51 Astor Place

11,500 sf

CVS Pharmacy / Jason Pruger, Newmark Grubb Knight Frank

Minskoff Properties / Patrick Smith, SRS Real Estate Partners

The drugstore signed a lease.

112 Madison Avenue

10,000 sf

Poliform USA / Elliot Klein, EVO Real Estate Group

112 Madison Realty / Jeffrey Smith, Samco Properties

The luxury home furnishings brand signed a lease for a showroom and store.

2026 Westchester Avenue (Bronx)

9,200 sf

Dollar Tree / Miles Mahony, Esther Bukai, Richard Senior, Jeffrey Howard, Ripco Real Estate

2026 Managers / Kathy Zamechansky, KZA Realty

The discount chain signed a lease.

4602 Avenue D (Brooklyn)

8,000 sf

Family Dollar / Gluck Realty

Duraland Realty / Gluck Realty

The retailer signed a lease.

1720 Atlantic Avenue (Brooklyn)

7,500 sf

Dollar Tree / Miles Mahony, Esther Bukai, Richard Senior, Jeffrey Howard, Ripco Real Estate

Bermuda Realty No. 2 / Miles Mahony, Esther Bukai, Richard Senior, Jeffrey Howard, Ripco Real Estate

The discount chain signed a lease.

575 Madison Avenue

7,000 sf

Breitling / Jonathan Moss, M&M Retail Luxury Consulting

Steinberg & Pokoik / Amira Yunis and Anthony Stanford, CBRE

The high-end watch brand signed a lease on Billionaire’s Row.

41 Murray Street

6,600 sf

Rosa Mexicano / n/a

off-market / Barry Lipsitz

The tenant signed a 10-year lease in an off-market deal.

305 Canal Street

5,500 sf

SGNY1 LLC / Steve Rappaport, Sinvin Real Estate

Canal St Studio and Rudman’s Realty / Steve Rappaport, Sinvin Real Estate

The tenant signed a lease.

113 Reade Street

5,400 sf

Serafina Restaurant Group / David Latman, DLL Real Estate

Triumph Hotels / David Abrams, RKF

The restaurant group signed a lease for the entire building.

1006 Madison Avenue

5,250 sf

Roland Mouret / n/a

Thor Equities / n/a

The UK-based women’s fashion brand signed a lease for the entire Madison Avenue townhouse.

7 East 14th Street

5,200 sf

Ricky’s Union Square / Jason Richter, Hudson Real Estate

Victoria Retail / Steven Baker and Aaron Fishbein, Winick Realty Group

The retailer signed a lease.

5119 Fourth Avenue (Brooklyn)

5,000 sf

Bubbles and Suds Laundromat / Miles Mahony and Dillon Fraioli, Ripco Real Estate

S&B 4th Ave Realty / Miles Mahony and Dillon Fraioli, Ripco Real Estate

The tenant bought the laundromat business and took over the existing lease.

270 Park Avenue South

4,325 sf

Morton Williams Wine & Spirits / in-house

Pan Am Equities / Joshua Strauss and David Abrams, RKF

The company signed a lease for its second Manhattan store.

1004 Flatbush Avenue (Brooklyn)

4,081 sf

Carter’s Retail / Sholom & Zuckerbrot Realty

1,004 Flatbush Realty / Eddie Mamiye, Ike Bibi, Ariel Schuster, Barry Fishbach and David Rosenberg, RKF

The children’s clothing chain signed a lease.

860 Madison Avenue

4,000 sf

Elie Saab / Eric Le Goff and Jim Downey, Cushman & Wakefield

Solil Management / Brett Weinblatt, Solil Management

The fashion designer signed a lease for his first shop in the U.S.

329 First Avenue

3,800 sf

Sleepy’s / Richard Smith, Winick Realty Group

329 1st Ave LLC / Richard Smith, Winick Realty Group

The retailer signed a lease.

79 Grand Street

3,600 sf

Gentle Monster / John Choi, Sandbox Real Estate and Development

n/a / Sarah Shannon, Sinvin Real Estate

The tenant signed a lease.

1305 Kings Highway (Brooklyn)

3,500 sf

City Property USA NY / Newmark Grubb Knight Frank

1,305 Properties / M.C. O’Brien

The urgent care provider has committed to a long-term lease.

158 Franklin Street

3,475 sf

Urban Investments / Roxanne Betesh, Sinvin Real Estate

Steven Alan / Roxanne Betesh, Sinvin Real Estate

The tenant signed a lease.

49 West 116th Street

3,270 sf

Flynn O’Hara Uniforms / Dillon Fraioli, Ripco Real Estate

Central Harlem Pa / Hal Shapiro, Winick Realty Group

The retailer signed a lease.

25 West 14th Street

3,111 sf

Liberty Travel / Gene Meer, Friedland Realty

EPIC W14 LLC / Christopher Owles and Max Talpalar, Sinvin Real Estate

The tenant signed a lease.

2726 Frederick Douglass Boulevard

3,000 sf

7-Eleven / Greg Covey and Ariel Schuster, RKF

2726 Realty / n/a

The convenience store chain signed a lease.

436 Utica Avenue (Brooklyn)

3,000 sf

Payless / Michael Friedman, In Line Realty

Bawabeh Brothers / Josh Augenbaum Realty

The shoe chain signed a renewal lease.

2455 McDonald Avenue (Brooklyn)

2,900 sf

Sam Kitchens NYC / Bernard Kostovetsky, United National Realty

Saljel Realty / Gennady Gerovich, United National Realty

The tenant signed a lease.

8 West 38th Street

2,700 sf

Blaggards III Restaurant / ABS Partners Real Estate

n/a / Andrew Udis and Ron Zimmerman, ABS Partners Real Estate

The restaurant group signed a 12-year renewal lease for part of the ground floor and lower level.

149 Reade Street

2,600 sf

Schurman Fine Papers / Jacqueline Klinger, SCG Retail

Greenwich Street / Joshua Siegelman, Winick Realty Group

The retailer signed a lease.

2826 Church Avenue (Brooklyn)

2,500 sf

Payless / Michael Friedman, In Line Realty

Bawabeh Brothers / Josh Augenbaum Realty

The shoe chain signed a lease.

428 Amsterdam Avenue

2,400 sf

Crave Fishbar / Brandon Eisenman, RKF

420-428 Amsterdam / n/a

The restaurant signed a lease for the Upper West Side space.

176 Fifth Avenue

2,200 sf

Pinkyotto / Jeeun Elizabeth Kim, Winick Realty Group

174 Fifth Avenue / Sean Moran, CBRE

The retailer leased a two-month pop-up store.

444 10th Avenue

2,000 sf

Fresh & Company / Mark Kapnick, SRS Real Estate Partners

Care Realty / Blaine Stiegler and Erin Grace, SRS Real Estate Partners

The food retailer signed a lease.

10 West 37th Street

2,000 sf

Rock & Soul Electronics / Richard Smith, Winick Realty Group

Sachsol Realty Company / Richard Smith, Winick Realty Group

The retailer signed a lease.

598 Ninth Avenue

2,000 sf

Sticky Fingers / Jonny Isbit, Sinvin Real Estate

Clinton 42nd Street / Steven Baker and Aaron Fishbein, Winick Realty Group

The retailer signed a lease.

918 Third Avenue

1,920 sf

Wok Chi / Adam Weinblatt and Reed Zukerman, Newmark Grubb Knight Frank

Solil Management / Brett Weinblatt, Solil Management

The Chinese restaurant signed a lease.

516 Vandalia Avenue (Brooklyn)

1,800 sf

Gateway Pharmacy / M.C. O’Brien

Gateway Elton Street II / M.C. O’Brien

The pharmacy has committed to a long-term lease.

88 August 2015 www.TheRealDeal.com

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Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

231 West 29th Street

1,740 sf

Level 7 / James Buslik and Jeff Buslik, Adams & Company

231/249 West 39 Street Associates / James Buslik and Jeff Buslik, Adams & Company

The tenant signed a lease for the sale of contemporary wholesale apparel.

582 Fifth Avenue (Brooklyn)

1,550 sf

Pay-O-Matic Check Cashing / Dillon Fraioli and Miles Mahony, Ripco Real Estate

580 5th Avenue, LLC / Dillion Fraioli and Miles Mahony, Ripco Real Estate

The company signed a lease.

227 Lenox Avenue

1,500 sf

Sottocasa Pizzeria / Charles Piazza of Charles Piazza Real Estate and Eric Piazza of DJK Commercial Realty

Aizer Realty Group / Joseph Aizer, Aizer Realty Group

The Italian restaurant signed a lease for its second New York location.

1321 Madison Avenue

1,450 sf

Seraphine / Sarah Shannon, Sinvin Real Estate

1321 Madison Avenue Corp. / Anita Loewy, Anita Loewy, Inc.

The tenant signed a lease.

474 Lexington Avenue

1,400 sf

Fresh & Company / n/a

Solil Management / Brett Weinblatt, Solil Management

The food retailer signed a lease.

401 Broadway

1,260 sf

Rachel Riley / James Costello, Sinvin Real Estate

401 Broadway Building / Michael Rouzenrouch, Abe Saks and Mayer Jotkowitz, Miyad Realty

The tenant signed a lease.

9 Clinton Street

1,200 sf

Anthom / Todd Lewin, Core

HM Village / Tom Brady and Sal Falcone, TOWN Real Estate

The womenâ&#x20AC;&#x2122;s shoes retailer signed a lease.

303 East Houston Street

1,100 sf

Pay-O-Matic Check Cashing / Dillon Fraioli and Miles Mahony, Ripco Real Estate

Pjb Properties / Dillion Fraioli and Miles Mahony, Ripco Real Estate

The company signed a lease.

161 Prince Street

1,092 sf

Joe & The Juice / Benjamin Zack and Caleb Petersen, RKF

159-191 Prince Owners / Christopher Owles, Sinvin Real Estate

The tenant signed a lease.

193 Bedford Avenue (Brooklyn)

1,000 sf

Schmackaryâ&#x20AC;&#x2122;s Cookie Company / Harrison Abramowitz, Newmark Grubb Knight Frank Retail

Reno Capital / Hymie Dweck and Joseph Colista, Newmark Grubb Knight Frank Retail

The food retailer signed a lease.

2111 Nostrand Avenue (Brooklyn)

1,000 sf

Cricket / Gluck Realty

n/a / Gluck Realty

The retailer signed a lease.

231 West 29th Street

900 sf

Stephanie Newmark / James Buslik and Jeff Buslik, Adams & Company

231/249 West 39 Street Associates / James Buslik and Jeff Buslik, Adams & Company

The tenant signed a lease for the sale of contemporary wholesale apparel.

3450 Broadway

873 sf

WO USA / Tomo Morita, Natural Habitat Realty

Broadway 3450 LLC / Kenneth Hochhauser and Zach Diamond, Winick Realty Group

The retailer signed a lease.

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Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

199 Prince Street

800 sf

The Laundress / Steve Rappaport and Margie Sarway, Sinvin Real Estate

Prince Street Investment / Christopher Owles, Steve Rappaport and Margie Sarway, Sinvin Real Estate

The tenant signed a lease.

246 West 38th Street

750 sf

Chrystoph Marten / Michelle Stone, Sinvin Real Estate

n/a / Evan Lieberman, EVO Real Estate Group

The tenant signed a lease.

67 Wall Street

700 sf

La Colombe / Greg Covey and Ariel Schuster, RKF

DTH Capital / Winick Realty Group

The coffee shop signed a lease.

1535 Broadway

640 sf

Laline / Julia Maksimova and Ilan Bracha, Keller Williams NYC

Vornado Realty Trust / Nick Howell and Sherri White, Vornado Realty Trust

The Israeli bath and body shop signed a lease to open its U.S. flagship location.

119 Court Street (Brooklyn)

553 sf

Stolle Pie Shop / Aaron Fishbein, Winick Realty Group

Tio Pio Court Street / Zach Diamond and Jordan Kaplan, Winick Realty Group

The Russian pie-maker signed a lease.

292 Bedford Avenue (Brooklyn)

500 sf

Dirty Hands Jewelry / Eddie Mamiye and Barry Fishbach, RKF

292 Bedford LLC / Eddie Mamiye and Barry Fishbach, RKF

The jewelry shop signed a lease.

355 Atlantic Avenue (Brooklyn)

400 sf

Barbers Blueprint / Joseph Colista and Hymie Dweck, Newmark Grubb Knight Frank

355 357 Atlantic Ave. Corp. / Joseph Colista and Hymie Dweck, Newmark Grubb Knight Frank

The barbershop signed a lease.

152 West 57th Street

350 sf

Ameriflora Florist / Peter Weiner, Fawn Realty

Carnegie Hall Tower / Steven Baker and Aaron Fishbein, Winick Realty Group

The retailer signed a lease.

3005 Church Avenue (Brooklyn)

350 sf

Diallo Mamadou / M.C. O’Brien

3001 Church Avenue LLC / M.C. O’Brien

The tailor has relocated its business to the busy intersection of Church and Nostrand Avenues.

163 West 10th Street

300 sf

Té Company / Sal Falcone, TOWN Real Estate

163 W. 10th / Tom Brady, TOWN Real Estate

The company signed a lease to use the space for serving specialty tea, as well as the retail/whole sale of raw tea for home preparation.

85 Pitt Street

300 sf

Pitt Pizza / Jason Misrahi, Misrahi Realty

85 Pitt Street LLC / Daniel Barcelowsky and Yesim Ak, Misrahi Realty

The pizza restaurant signed a lease.

5 Tudor City Place

289 sf

Tudor Wines / Margie Sarway, Sinvin Real Estate

Windsor Owners / Margie Sarway, Sinvin Real Estate

The tenant signed a lease.

2667 Broadway

235 sf

Shiny Tea NY / MHP Real Estate Services

101 Broadway LLC / Andrew Connolly and Joshua Strauss, RKF

The tea shop signed a lease.

32 East 31st Street

n/a

Tone House / Francesco Bardazzi, PD Properties

Mark Furst / MHP Real Estate Services

The tenant signed a lease.

Buys Address

Size

Buyer / Representative

Seller / Representative

Notes

120 West 45th Street

460,000 sf

Kamber Management / n/a

SL Green Realty / Richard Baxter and Yoron Cohen, JLL; Darcy Stacom and William Shanahan, CBRE

The firm purchased SL Green Realty’s Tower 45 for $365 million.

460 West 42nd Street

top 13 floors

Kuafu Properties / n/a

Related Companies / n/a

The company bought the top 13 floors of the building for $260 million, with plans to turn the 151 apartments into condominiums.

787 11th Avenue

464,000 sf

Georgetown Company and Bill Ackman / Adam Flatto, Georgetown Company

Ford Motor Company / Darcy Stacom and Bill Shanahan, CBRE

The partnership closed on its purchase of the eight-story property for $250 million.

3 Mitchell Place

170 units

A foreign investor and Chaim Miller / Ben Reifer

Silverstein Properties / Doug Harmon, Adam Spies and Adam Doneger, Eastdil Secured

Beekman Tower, the vacant, 170-unit Art Deco building, sold for $138 million.

223-237 East Sixth Street

92,000 sf

Abro Management / Aaron Jungreis and Devin Cohen, Rosewood Realty Group

Hudson Companies / n/a

The East Village rental building sold for $60 million.

1899 Belmont Avenue (Bronx)

11 buildings, 345 residential units, two retail units

Black Spruce Management / Aaron Jungreis, Rosewood Realty Group

Alpert & Sons / Aaron Jungreis, Rosewood Realty Group

The 11-building package sold for $51.5 million.

Includes 1898-1910 Belmont Avenue, 1892-1894 Arthur Avenue, 2082 Crotona Parkway, 2083, 20882090 Mohegan Avenue, 2095 Honeywell Avenue and 876 East 180th Street.

99 Hudson Street

3 stories, 34,724 sf

LaSalle Investment Management / in-house

JMC Holdings / Kevin Donner, Eastdil Secured

The office penthouse on the top three floors sold for $48 million.

22-12 Jackson Avenue (Queens)

169,500 sf

Adam America Real Estate / Ronald Solarz and Chris Matousek, Eastern Consolidated

Diamond Service Corporation / Ronald Solarz and Chris Matousek, Eastern Consolidated

The residential development site sold for $43.5 million.

221 West 70th Street

7 buildings, 64 residential units

n/a / HPNY

n/a / HPNY

The seven-building Upper West Side portfolio, which includes 21 West 87th Street, 18, 26, 28, 30 West 88th Street and 37 West 89th Street, sold for $40 million.

19-21 West 31st Street

8 stories, 96 hotel rooms, 38,000 sf

Mitchell Holdings / Peter Kim, Tri-State Hanmi Realty

Puchall Family / Robert Skinner, Rutenberg Realty NY

The Herald Square Hotel sold for $38.5 million.

385 Union Avenue (Brooklyn)

6 stories, 47 residential units, 40,000 sf

Sugar Hill Capital Partners / Aaron Jungries and Michael Guttman, Rosewood Realty Group

Madison Realty Capital / Aaron Jungries and Michael Guttman, Rosewood Realty Group

The vacant elevator rental building sold for $37.4 million.

704 Eighth Avenue (Brooklyn)

2 buildings

n/a / Adam Hess and Ofer Cohen, TerraCRG

RedSky Capital and Megalith Capital Management / Adam Hess and Ofer Cohen, TerraCRG

The buildings sold for $37 million, a record price for a multifamily building in Park Slope. Includes 719-723 Eighth Avenue.

467 Keap Street (Brooklyn)

10 stories, 29 residential units, 1 commercial unit

n/a / n/a

Tommie Hui / Reliance Realty of Manhattan

The building sold for $33 million, or $465 per square foot.

55 Spring Street

2 buildings, 33 residential units, 18,552 sf

Joseph Brunner / n/a

Marolda Properties / n/a

The two rental buildings sold for $15.5 million each.

Includes 57 Spring Street.

455 Hudson Street

22,000 sf

Cherney Real Estate / n/a

Benchmark Real Estate Group / Peter Von Der Ahe and Joe Koicim, Marcus & Millichap

The mixed-use rental building sold for $30 million.

92 August 2015 www.TheRealDeal.com

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Buys continued Address

Size

Buyer / Representative

Seller / Representative

Notes

152 Ludlow Street

9 residential units

Hubb NYC / n/a

Jonis Realty and Four Winds Real Estate / Glenn Tolchin, Yoav Oelsner, Anthony Ledesma, Jason Gold and Richard Baxter, JLL; Eric Hoberman, Kriss & Feuerstein

A partnership of the two joint ventures sold the Gotham Court properties, at 152 Ludlow Street and 149-151 Essex Street, for $29.1 million.

43-31 45th Street (Queens)

6 stories, 94 residential units, 1 commercial unit, 79,830 sf

JRC Management / Aaron Jungreis, Rosewood Realty Group

BRG Management / Aaron Jungreis, Rosewood Realty Group

The elevator building, built in 1931, sold for $27.5 million.

260 East 72nd Street

5 stories, 28 residential units, 26,800 sf

SL Green Realty / n/a

Walter & Samuels / n/a

The mixed-use residential building sold for $27.1 million.

220 West 116th Street

5 buildings, 52 units

Galil Management / Steven Vegh, Westwood Realty Associates

Springhouse Partners / Steven Vegh, Westwood Realty Associates

The five-building package, which includes 449 West 125th Street, sold for $25.8 million.

55 Third Avenue

15,311 sf

n/a / n/a

Benchmark / James Nelson and Robert Knakal, Cushman & Wakefield

The retail condominium sold for $24.4 million.

116 University Place

3,300 sf

Ranger Properties and Sagamore Capital / Asop Realty and ASG Realty

Verison Realty / n/a

The building sold for $22 million.

305 East 56th Street

5 buildings, 78 residential units, 1 office, 1 retail unit, 41,365 sf

n/a / Eric Lupo and George Niblock, Friedman-Roth Realty Services

private family / Eric Lupo and George Niblock, Friedman-Roth Realty Services

The five Upper East Side buildings, owned by the same family for over 40 years, sold for $21.5 million. Includes 315 East 57th Street and 167-169-171 East 99th Street.

213-217 West 238th Street (Bronx)

2 buildings, 122 total residential units

Related Companies / Aaron Jungreis, Rosewood Realty Group

Black Spruce Management / Aaron Jungreis, Rosewood Realty Group

The properties sold for $19.3 million. Includes 38003806 Bailey Avenue.

1514 West Eighth Street (Brooklyn)

3 buildings

private investor / Aaron Jungreis, Rosewood Realty Group

private investor / Aaron Jungreis, Rosewood Realty Group

The three-building portfolio, which includes 1270 Ocean Avenue and 101 Woodruff Avenue, sold for $19 million.

1985-1991 Third Avenue

30,000 sf

n/a / Lily Ren, FriedmanRoth Realty Services

Emmut Properties / Richard Guarino, Friedman-Roth Realty Services

The development site sold for $16 million, or $246 per buildable square foot.

508 West 158th Street

4 buildings, 78 total residential units, 62,680 sf

n/a / n/a

n/a / Robert Shapiro and Robert Knakal, Cushman & Wakefield

The four-building package sold for $15 million. Includes 512 West 158th Street, 516 West 159th Street, and 522 West 161st Street.

210 West 251st Street (Bronx)

7 stories, 70 residential units

private investor / Aaron Jungreis, Rosewood Realty Group

210 W 251 LLC / Aaron Jungreis, Rosewood Realty Group

The seven-story elevator apartment building sold for $15 million.

2217 Caton Avenue (Brooklyn)

9 stories, 29 residential units, 1 retail unit, 24,214 sf

Caton Acquisition Partners / n/a

Second City Real Estate / Rob Rizzi, Jeff Julien, Rob Hinckley and Steven Rutman, HFF

The mixed-use building sold for $14.23 million.

36 West 71st Street

4 residential units, 7,620 sf

n/a / Vandenberg

n/a / Paul Smadbeck of Cushman & Wakefield and Harris Philip of Alexander Hidalgo Real Estate

The townhouse sold for $14 million.

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Buys continued Address

Size

Buyer / Representative

Seller / Representative

Notes

366 Audubon Avenue

4 buildings, 54 residential units, 3 retail units, 46,013 sf

n/a / Richard Guarino, Friedman-Roth Realty Services

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

The four contiguous buildings sold for $12 million.

Includes 550-556 West 184th Street.

142-21 37th Avenue (Queens)

11 residential units, 4 community facility units

undisclosed / Greg Corbin and Miguel Jauregui, Besen & Associates

undisclosed / Greg Corbin and Miguel Jauregui, Besen & Associates

The Flushing property sold for $11.8 million.

4377 Bronx Boulevard (Bronx)

3 stories plus penthouse, 46,300 sf

private investor / Richard Guarino, Friedman-Roth Realty Services

n/a / Langsam Property Services

The elevator office building sold for $11 million, or $239 per square foot.

6 West 190th Street (Bronx)

6 stories, 57 residential units, 6 commercial units

n/a / Aaron Jungreis, Rosewood Realty Group

6 W 190th St. Bronx LLC / Aaron Jungreis, Rosewood Realty Group

The six-story walk-up apartment building sold for $10.5 million.

529 West 158th Street

2 buildings, 55 total residential units, 37,122 total sf

Springhouse Partners / Victor Sozio, Shimon Shkury, Michael Tortorici, Josh Berkowitz and Samuel Atlas, Ariel Property Partners

Soho Properties / Victor Sozio, Shimon Shkury, Michael Tortorici, Josh Berkowitz and Samuel Atlas, Ariel Property Partners

The two buildings sold for a combined $9.7 million.

Includes 504-506 West 159th Street.

19 Howard Street

3 stories, 4,500 sf

Wang Tao / Ribo International Commerce / n/a

Silvershore Properties / Robert Burton, Cushman & Wakefield

The upscale Chinese fashion designer bought the property, with plans to open her first U.S. location, for $9.6 million.

286 Clinton Avenue (Brooklyn)

19,000 sf

Kash Group / Mark Spinelli, Michael Tortorici, Shimon Shkury, Victor Sozio, Jonathan Berman and Daniel Tropp, Ariel Property Advisors

Two Trees Management / Mark Spinelli, Michael Tortorici, Shimon Shkury, Victor Sozio, Jonathan Berman and Daniel Tropp, Ariel Property Advisors

The multifamily property sold for $8.15 million.

2511 Frisby Avenue (Bronx)

6 stories, 46 residential units, 37,380 sf

n/a / Aaron Jungreis, Rosewood Realty Group

n/a / Aaron Jungreis, Rosewood Realty Group

The elevator apartment building sold for $7.4 million.

392 Clinton Avenue (Brooklyn)

4 stories, 16 residential units

n/a / HPNY

n/a / HPNY

The four-story walk-up apartment building sold for $7 million.

309 Amsterdam Avenue

4 stories, 3 residential units, 1 retail space, 4,080 sf

n/a / n/a

n/a / Paul Smadbeck and Robert Stufano, Cushman & Wakefield

The mixed-use building sold for $6.7 million.

245 Fourth Avenue (Brooklyn)

21,810 buildable sf

local investor / Yona Edelkopf, EPIC Commercial Realty

n/a / Baruch Edelkopf and Mike Rybinskov, EPIC Commercial Realty

A property sold for $6.5 million.

124-22 Queens Boulevard (Queens)

2 stories, 4 commercial units, 9,790 sf

undisclosed / Ronnie Shaban, Besen & Associates

124-22 Queens Boulevard LLC / Michael Besen and Amit Doshi, Besen & Associates

The Kew Gardens property sold for $6.5 million.

5255 Kings Highway (Brooklyn)

4 buildings, 34,396 sf

private investor / Jonathan Berman, Mark Spinelli, Daniel Tropp and Michael Tortorici, Ariel Property Advisors

Zelnuck Corporation / Jonathan Berman, Mark Spinelli, Daniel Tropp and Michael Tortorici, Ariel Property Advisors

The industrial facility, consisting of four buildings and a vacant lot, sold for $6.4 million. Includes 2-24 Preston Court.

1217-1221 Bedford Avenue (Brooklyn)

4 stories, 14,760 sf

n/a / n/a

n/a / Michael Amirkhanian and Robert Shapiro, Cushman & Wakefield

The property sold for $6.3 million.

507 Osborn Street (Brooklyn)

2 stories, 60,000 sf

Knights Collision Experts / Christopher Halliburton, Halstead Property

Tuck-It-Away Osborn / Neil Dolgin of Kalmon Dolgin and Christopher Halliburton of Halstead Property

The industrial property sold for $6.2 million.

675 East 234th Street (Bronx)

6 stories, 42 residential units, 38,600 sf

n/a / Aaron Jungreis, Rosewood Realty Group

675 East 234 Associates LLC / Aaron Jungreis, Rosewood Realty Group

The elevator apartment building sold for $5.4 million.

38-04 11th Street (Queens)

8,540 sf

developer / Jakub Nowak and Jonathan Eshaghian, Marcus & Millichap

limited liability company / Jakub Nowak and Jonathan Eshaghian, Marcus & Millichap

The warehouse sold for $4.3 million.

932 Grand Street (Brooklyn)

17,840 buildable sf

local investor / n/a

n/a / Justin Zeitchik and Seth Peyser, EPIC Commercial Realty

The properties, which include 315 Maujer Street, sold for $4.2 million.

350 East 19th Street

5 stories, 8 residential units, 4,975 sf

n/a / William Radmin and George Niblock, FriedmanRoth Realty Services

n/a / n/a

The apartment building sold for $4 million.

148 West 24th Street

6,500 sf

Okada Acquisition / n/a

Guru State / n/a

The retail co-op sold for $3.4 million.

243 Fourth Avenue (Brooklyn)

10,926 buildable sf

local investor / Yona Edelkopf, EPIC Commercial Realty

n/a / Baruch Edelkopf and Mike Rybinskov, EPIC Commercial Realty

The development site sold for $3.3 million.

402-422 Snediker Avenue (Brooklyn)

2 buildings, 33,500 sf

private investor / Jonathan Berman, Shimon Shkury, Mark Spinelli and Daniel Tropp, Ariel Property Advisors

private investor / Jonathan Berman, Shimon Shkury, Mark Spinelli and Daniel Tropp, Ariel Property Advisors

The two industrial properties, which include 485-515 Sinderen Avenue, sold for $3.3 million. The total lot size is approximately 45,000 sf.

149 Rivington Street

4 stories

Silvershore Properties / n/a

n/a / n/a

The four-story mixed-use walk-up building sold for $2.8 million. The buyer plans to develop the space into a larger property.

156-160 17th Street (Brooklyn)

3 stories, 2 residential units, 2 commercial units, 10,028 sf

n/a / n/a

n/a / Stephen Palmese and Aaron Warkov, Cushman & Wakefield

The mixed-use building sold for $2.7 million.

186 Greenpoint Avenue (Brooklyn)

7,194 sf

n/a / n/a

n/a / Brendan Maddigan, Cushman & Wakefield

The development site sold for $2.5 million.

876 Bergen Street (Brooklyn)

10,847 sf

private investor / Jonathan Berman, Mark Spinelli, Daniel Tropp and Michael Tortorici, Ariel Property Advisors

private investor / Jonathan Berman, Mark Spinelli, Daniel Tropp and Michael Tortorici, Ariel Property Advisors

The vacant lot sold for $2.25 million.

354 East 116th Street

4 stories, 3 residential units, 1 commercial unit, 4,390 sf

undisclosed / Ronnie Shaban, Besen & Associates

Allianz Realty Holding Corporation / Greg Corbin and Miguel Jauregui, Besen & Associates

This East Harlem property sold for $2.2 million.

902-906 Jennings Street (Bronx)

41,896 sf

New Destiny Housing / Jason Gold, Scot Hirschfield and Marko Agbaba, Ariel Property Advisors

private investor / Jason Gold, Scot Hirschfield and Marko Agbaba, Ariel Property Advisors

The development site, owned by a private investor since the 1970’s, sold for $2.1 million.

92-06 Jamaica Avenue (Queens)

7,760 sf

n/a / n/a

n/a / Brian Sarath, Cushman & Wakefield

The commercial building sold for $1.9 million.

154 Graham Avenue (Brooklyn)

4,500 sf

private investor / Daniel Tropp, Mark Spinelli and Jonathan Berman, Ariel Property Advisors

private investor / Daniel Tropp, Mark Spinelli and Jonathan Berman, Ariel Property Advisors

The mixed-use building, which includes an additional 3,000 sf of air rights, sold for $1.9 million.

51 Bruckner Boulevard (Bronx)

4 stories, 4 residential units, 1 commercial unit, 5,120 sf

n/a / Jason Gold, Michael Tortorici, Scot Hirschfield and Marko Agbaba, Ariel Property Brothers

n/a / Jason Gold, Michael Tortorici, Scot Hirschfield and Marko Agbaba, Ariel Property Brothers

The mixed-use building sold for $1.8 million.

1166 St. John’s Place (Brooklyn)

3 stories, 4 residential units, 1 commercial unit

n/a / n/a

n/a / n/a

The mixed-use walk-up building sold for $1.7 million.

96 August 2015 www.TheRealDeal.com

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Buys continued Address

Size

Buyer / Representative

Seller / Representative

Notes

2057 Ocean Avenue (Brooklyn)

3 stories, 6 residential units

local investor / Yona Edelkopf, EPIC Commercial Realty

n/a / Yona Edelkopf, EPIC Commercial Realty

The walk-up apartment building sold for $1.4 million.

1014 Cortelyou Road (Brooklyn)

3 stories, 2 residential units, 1 commercial unit, 3,486 sf

private investor / Derek Bestreich, Erik Rodriguez and Seth Schiffman, Marcus & Millichap

limited liability company / Derek Bestreich, Erik Rodriguez and Seth Schiffman, Marcus & Millichap

The property sold for $1.35 million.

191 Clarkson Avenue (Brooklyn)

3,048 sf

650 Met Partners / Derek Bestreich, Steve Reynolds and Thomas Reynolds, Marcus & Millichap

private investor / Derek Bestreich, Steve Reynolds and Thomas Reynolds, Marcus & Millichap

The land sold for $1.3 million.

1948 Amsterdam Avenue

2 stories, 2 residential units, 1 retail space

n/a / Lily Ren, FriedmanRoth Realty Services

n/a / Nadeem Haque and Phil Ragone, Friedman-Roth Realty Services

The mixed-use West Harlem building sold for $1.3 million.

1821-1837 Richmond Avenue (Staten Island)

84,000 sf

n/a / n/a

n/a / James Nelson, Cushman & Wakefield

The leasehold interest of a retail property sold for $1.3 million in an all-cash transaction.

2178 Pitkin Avenue (Brooklyn)

2 two-story buildings, 4 residential units, 4 commercial units, 7,150 sf

undisclosed / Joseph Friedman, Besen & Associates

Durga 2178 Pitkin LLC / Ari Weisfogel, Besen & Associates

The East New York properties sold for $1.12 million.

Includes 2182 Pitkin Avenue.

2405 Tilden Avenue (Brooklyn)

3 stories, 6 residential units, 6,190 sf

private investor / Derek Bestreich, Erik Rodriguez and Seth Schiffman, Marcus & Millichap

private investor / Derek Bestreich, Erik Rodriguez and Seth Schiffman, Marcus & Millichap

The apartment building sold for $1.1 million.

1403 Second Avenue

2 buildings

Salt Equities / Jeremy Aidan and Itan Rahmani, Venture Capital Properties

Don Thaler / Dan Kaplan, CBRE

The two-building package, which includes 28 East 72nd Street, was sold to Salt Equities.

Financing Address

Size

Borrower / Representative

Lender / Representative

Notes

550 Vanderbilt Avenue

278 residential units

Greenland Group and Forest City Ratner / n/a

HSBC Holdings / n/a

The Chinese developer and Forest City Ratner secured a $200 million loan for the condo project.

250 South Street

940,000 sf

Extell Development / n/a

Deutsche Bank / n/a

Extell received $150 million in bridge loan financing for its luxury condo tower.

23rd Street, Long Island City (Queens)

780,000 sf

Jia Shu Xu of C&G Empire Realty / Morris Betesh, Cushman & Wakefield

Ladder Capital / n/a

The firm closed a $104 million land loan for a Long Island City development site.

131-01 39th Avenue (Queens)

100,000 sf

Triple Star Realty / Jonathan Aghravi and Charles Han, Eastern Consolidated

RWN Management / n/a

A $42 million bridge loan was arranged to fund the purchase of a development site in Flushing.

163-05 Archer Avenue (Queens)

3 buildings

Jamaica Tower LLC

Madison Realty Capital

The lender provided $37 million in debt collateralized by three properties in Jamaica and Flushing. Includes 163-25 Archer Avenue and a third property.

508 East 78th Street

4 buildings, 6 stories, 377 units

Century Management Services

National Cooperative Bank

A $26.5 million first mortgage and $3 million line of credit was arranged for The Cherokee building. Includes 516 East 78th Street and 509-517 East 77th Street.

864 Nostrand Avenue (Brooklyn)

3 buildings, 18 total residential units, 2 commercial units, 57,040 total rentable sf

n/a / n/a

Avant Capital Partners / n/a

A $12.3 million bridge loan was secured by the properties.

Includes 372 Montgomery Street and 4377 Bronx Boulevard.

370 Ocean Parkway (Brooklyn)

131-unit co-op

Park Towers Owners Inc. / n/a

NCB / n/a

A $6 million first mortgage and $1 million line of credit were arranged for the cooperative.

2190 Boston Road (Bronx)

74-unit co-op

2190 Boston Owners Inc. / n/a

NCB / n/a

A $3.8 million first mortgage and $300,000 line of credit were arranged for the cooperative.

230 East 50th Street

43-unit co-op

230 Tenants Corp. / n/a

NCB / n/a

A $2.9 million first mortgage and $500,000 line of credit were arranged for the cooperative.

137 Greene Street

14-unit co-op

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

NCB / n/a

A $2.6 million first mortgage and a $500,000 line of credit were arranged for the cooperative.

321 West 90th Street

50-unit co-op

321 West 90th Street Owners / n/a

NCB / n/a

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

75-85 Grand Street

26-unit co-op

Grand Loft Corp. / n/a

NCB / n/a

A $1.8 million first mortgage and $1 million line of credit were arranged for the cooperative.

83-37 Saint James Avenue (Queens)

122-unit co-op

Croyden Apartments Inc. / n/a

NCB / n/a

A $2.1 million first mortgage and $500,000 line of credit were arranged for the cooperative.

175 East 79th Street

61-unit co-op

175 East 79 Tenants Corp. / n/a

NCB / n/a

A $2 million first mortgage and $500,000 line of credit were arranged for the cooperative.

240 East 79th Street

60-unit co-op

240-79 Owners Corp. / n/a

NCB / n/a

A $2 million first mortgage and $500,000 line of credit were arranged for the cooperative.

35 East 30th Street

44-unit co-op

35 East Tenants Corp. / n/a

NCB / n/a

A $2 million line of credit was arranged for the cooperative. Includes 133-135 Greene Street.

91 East End Avenue

4-unit co-op

Brooks Holding Corp. / n/a

NCB / n/a

A $1.6 million first mortgage and $250,000 line of credit were arranged for the cooperative.

157 East 75th Street

16-unit co-op

157 East 75th Street Corporation / n/a

NCB / n/a

A $1.3 million first mortgage and $250,000 line of credit were arranged for the cooperative.

341 West 87th Street

9-unit co-op

Whitney Realty / n/a

NCB / n/a

A $850,000 first mortgage and $500,000 line of credit were arranged for the cooperative.

838 Greenwich Street

27-unit co-op

838 Greenwich Corp. / n/a

NCB / n/a

A $1.3 million first mortgage and $250,000 line of credit were arranged for the cooperative.

396 Bleecker Street

35-unit co-op

Bleecker & 11st Owners Corp. / n/a

NCB / n/a

An $850,000 second mortgage and $250,000 line of credit were arranged for the cooperative.

131 Prince Street

9-unit co-op

131 Prince Cooperative Inc. / n/a

NCB / n/a

A $1 million first mortgage was arranged for the cooperative.

121 West 82nd Street

7-unit co-op

121 W. 82 Corp. / n/a

NCB / n/a

A $600,000 first mortgage and $200,000 line of credit were arranged for the cooperative.

121 West 72nd Street

79-unit co-op

121 W. 72nd St. Owners Corp. / n/a

NCB / n/a

A $750,000 line of credit was arranged for the cooperative.

98 August 2015 www.TheRealDeal.com

Financing continued Address

Size

Borrower / Representative

Lender / Representative

Notes

34 Downing Street

12-unit co-op

34 Downing Owners Corp. / n/a

NCB / n/a

A $750,000 first mortgage was arranged for the cooperative.

26 Bedford Street

16-unit co-op

26 Bedford Street Owners / n/a

NCB / n/a

A $335,000 first mortgage and $50,000 line of credit were arranged for the cooperative.

951 President Street (Brooklyn)

8-unit co-op

951 President Street Realty Corp. / n/a

NCB / n/a

A $200,000 first mortgage and a $100,000 line of credit were arranged for the cooperative.

Other Deals Blackstone buys retail, garage at Flushing complex for $400M

Developers of 111 Murray secure $445M loan

Sky View Parc

Blackstone Group is acquiring the retail mall and parking garage at the Sky View Parc complex in Flushing for $400 million, making a big bet on the fast-growing Queens neighborhood’s real estate market. Blackstone purchased the 560,000-squarefoot mall and 2,500-car garage from Onex, the Toronto-based private equity firm that codeveloped the complex. Eastdil Secured brokered the sale for Onex. The acquisition, done through the private equity giant’s Blackstone Property Partners fund, is the firm’s first deal in Flushing, according to Crain’s. The shopping mall is nearly fully occupied by major retailers and includes a Nike outlet store, a Nordstrom Rack and discount warehouse chain BJ’s Wholesale Club. Onex built the 14-acre, recession-era complex with original partner Muss Development, which it bought out last year. While originally falling behind schedule and over budget, the project includes three condo towers that have since sold out and the developers recently broke ground on another three high-rise condos at the property.

Fisher Brothers, Steve Witkoff and Howard Lorber’s New Valley closed a $445 million construction loan to help fund their 111 Murray Street condo development in Tribeca. The joint venture secured the financing from a group including lead lender Blackstone Real Estate Debt Strategies, M&T Bank and Deutsche Bank. The loan will fund construction of the 792-foot-tall luxury condo tower, which is slated for completion in 2018 and will feature 157 units and more than 20,000 square feet of amenities. The 58-story project will cost $820 million to build, according to the Wall Street Journal, with the developers having recently wooed a Chinese insurance company for funding, as The Real Deal reported. Witkoff, Fisher Brothers and New Valley paid $200 million for the site, which used to house a St. John’s University satellite campus, in 2013. Work on the Kohn Pedersen Fox-designed tower is due to break ground later this month, with sales having already launched.

Blackstone expands to 90K sf at Boston Properties’ 601 Lex Kamber Management is the buyer of Tower 45

Tower 45

Kamber Management is the buyer of SL Green Realty’s Tower 45, The Real Deal has learned. The firm dished out $365 million for the 460,000-square-foot tower at 120 West 45th Street. SL Green announced the sale in a press release last month, but didn’t disclose the buyer’s name. According to sources, Kamber plans to keep the property as a Class-A office building. JLL’s Richard Baxter and Yoron Cohen brokered the deal along with CBRE’s Darcy Stacom and William Shanahan.

Both teams declined to comment. SL Green had bought the building, which is 90 percent occupied, for $285 million in 2007. The real estate investment trust announced last month that the proceeds from the sale would be used to fund its $2.6 billion acquisition of 11 Madison Avenue. The purchase is a coup for Kamber, a small Manhattan firm that doesn’t appear to have a website and has very few properties tied to its name. According to Reonomy data, the firm owns or holds a stake in two Midtown office buildings: The 129,465-square-foot property 15 West 37th Street, and the 153,265-square-foot property 20 West 33rd Street.

111 Murray Street

601 Lexington Avenue

Private equity behemoth Blackstone Group is set to expand into Boston Properties’ 601 Lexington Avenue with a 90,000-square-foot lease. The firm signed on for 30,000 square feet on the 17th floor in February, and recently picked up its options on the 15th and 16th floors, for another 59,600 square feet, according to the New York Post. Starting rent for the February deal was $78.50 per square foot. Blackstone’s New York City headquarters is in 345 Park Avenue, near Lexington Avenue and just one block south. The new location at 601 Lexington Avenue is situated between 53rd and 54th streets. Newmark Grubb Knight Frank’s Neil Goldmacher represents Blackstone, and Boston Properties is represented by JLL’s David Kleiner, Cynthia Wasserberger and Frank Doyle. In the spring, Blackstone acquired most of General Electric’s $30 billion real estate portfolio along with Wells Fargo.

Citigroup sells LIC site to Queens developer for $143M Fairway to open second Brooklyn store

Fairway Market

Supermarket chain Fairway Market is expanding its presence in Brooklyn. The chain inked a 20-year, 40,000-squarefoot lease for a second Brooklyn location at 2149 Ralph Avenue. Fairway will be replacing a Waldbaum’s supermarket, which is currently occupying the space at the Georgetown Shopping Center in the Bergen Beach neighborhood in Brooklyn.

The chain currently has five Manhattan locations. In a report about the company’s fourthquarter 2014 finances, the company’s CEO, Jack Murphy, said the new location will be in a “densely populated submarket with ample parking in a dynamic section of Brooklyn.” He added that “this location will be the prototype for our new store model. It will have a smaller footprint and lower cost structure than our existing stores ... We have also spent a lot of time designing a more capital-efficient store and believe that we can build this store with a lower cost per square foot than our existing locations,” Murphy said in the statement from May.

Citigroup sold a huge Long Island City development site just north of One Court Square to Flushing-based developer Jia Shu Xu of C&G Empire Realty for $143 million, according to property records filed with the city last month. The property is made up of nine parcels — located just north of Court Square along 23rd Street between 44th Drive and 44th Road — each spanning 36,000 square feet, city records show.

The site holds roughly 780,000 buildable square feet. Most of the parcels are vacant, and some have industrial buildings.

The zoning allows for residential, office, retail and hotel space.

Xu could not immediately be reached for comment. A JLL team led by Jon Caplan and Richard Baxter marketed the site, as previously reported by The Real Deal. Caplan and Baxter Jia Shu Xu couldn’t immediately be reached for comment. Xu is planning four projects in Queens. In December 2014, he filed for a 14-story, mixed-use building that will replace a warehouse at 134-03 35th Avenue in Flushing. In March, Xu filed plans for a 197-unit mixed use project at 88-08 Justice Avenue in Elmhurst. He’s also planning projects at 136-21 Latimer Place in Flushing and 140-35 Queens Boulevard in Jamaica.

These deals were announced after the deadline for the Deal Sheet.

To view more deals visit our website: www.TheRealDeal.com 100 August 2015 www.TheRealDeal.com

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from page 53

products, said funds are starting to look outside of primary markets, both within the U.S. and abroad.

For example, Blackstone invested heavily in real estate in Southern Europe, where prices are still depressed in the wake of the euro crisis, buying 40,000 home mortgages in Spain. And given Blackstone’s stature as an industry trailblazer, others are likely to follow its lead.

Meanwhile, when REITs and funds invest in major markets like New York,

has become as an investment vehicle amid global economic turmoil and low bond yields, experts say.

That’s despite the fact that returns are not continuing their vertical trajectory.

For example, Blackstone’s Real Estate Partners Fund VII, which it closed in 2012, delivered annualized returns of 27.4 percent. Its most recent real estate fund, however, is targeting a slightly lower 20 percent.

And others are dealing with the same.

they now have to work harder to find deals that make financial sense, said Steven Moore, head of the U.S. real estate corporate finance practice at the mega auditing and tax firm KPMG. “People have become increasingly creative in their origination efforts,” he said, explaining that some firms are now retaining advisors to hunt for off-market opportunities and are often closing deals faster than they did in the past.

The real estate private fund manager Savanna is one firm churning out profits by what it claims is a less-traveled path.

“The market is competitive, but the competition is mainly chasing cashflowing stabilized properties,” said managing partner Nick Bienstock.

“We buy more complex transactions,” he said. “There is always competition for the kinds of deals we buy, but we typically compete only against a small field of two or three similar firms that

Preqin’s Moylan said the research company has already seen a “slight drop” in target returns among private equity firms.

But while real estate companies still have reason to be happy about continued interest from investors, there is real reason for concern.

After all, a flood of capital coupled with limited investment opportunities could be a recipe for an asset bubble, prompting funds to overpay for properties just so they can deploy their capital.

But according to observers, private funds and REITs today are still generally prudent investors — in part because of lessons learned during the last crash.

“I think that fund managers are arguably more responsible today than ever before, in terms of having a pretty clear view of what they’re looking to invest in before they go out and raise capital,” said Mitch Roschelle, the

have the capacity to execute a complex repositioning in New York City, not 50 bidders that receive an investment sales memorandum from a brokerage firm on a fully occupied cash-flowing asset.”

Both REITs and major funds are also showing increased interest in the outer boroughs and in new development deals, Moore said.

“My view is that there has been a recalibration of expectations,” he said, adding that these investors are also looking at more creative ways to structure deals by, say, pursuing joint ventures.

Of course, not pleasing investors takes a financial toll on these funds and REITs. While fund managers charge fees based on the assets they manage, they also typically get a share of profits once certain benchmarks are met — meaning poor performance affects their bottom line. More importantly, it makes it harder to raise future funds. REITs, meanwhile, are always under pressure from shareholders to ensure strong returns.

national practice leader of the real estate advisory division at the tax and auditing firm PwC. Roschelle explained that regulations and disclosure requirements are stricter today than in 2007, and that institutional investors are scrutinizing the funds and REITs they invest in more closely.

“The level of sophistication of investors and the level of transparency has improved greatly over time,” Roschelle added. “And that’s a good thing.” TRD

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The fact that investment funds and REITS are still able to make record fundraising hauls despite scarcer opportunities highlights just how attractive real estate

CORRECTIONS A N D C L A R I F I C AT I O N S In the July issue of The Real Deal, the “Movers and Shakers” column included the wrong photo of Christopher Barbaruolo, who joined Loeb & Loeb’s New York office as a partner in the real estate department.

The photo was of Allan Abshez, the new real estate chair of Loeb’s Los Angeles office. *** In the July magazine story, “Chinese Chess,” the architect of the Oosten in Williamsburg was misidentified. Piet Boon designed the building being built by Xinyuan Real Estate.

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from page 30

house has a pool, a tennis court and a basketball court. Sitt bought the 3.4-acre property for $5 million in 2000, but it’s appreciated in value nicely since. It was recently assessed at $11.4 million. Sitt also owns a property a few blocks away, at 166 Norwood Avenue. And his relatives are clustered in the neighborhood. Owners with the name Sitt are listed on 15 properties in Deal. For example, his cousin, Edward Sitt of Sitt Asset Management, which owns six properties in NYC, owns the house next door, at 162 Norwood Avenue. Meanwhile, Eddie’s brother and partner, Ralph Sitt, owns a house around the corner on Runyan Avenue.

The waterfront Cayre compound includes a baseball diamond, tennis court and multiple buildings.

Avenue. Meanwhile, owners with the last name Adjmi have four other Deal plots and two more in Long Branch.

Nakash The Nakash brothers — Joseph, Ralph and Avi — founded the era-defining jeans brand Jordache in 1978. In the decades since, the family’s real estate arm, Nakash Holdings, has bought dozens of hotels, offices, residential and retail properties nationwide, including several in New York. Joseph and Ralph each own four properties in Deal. Joseph owns three adjacent homes on either side of Almyr Avenue along with a connected vacant plot around the corner on Poplar Avenue.

The largest, the 2.9-acre 65 Almyr Avenue, has a market value of $4 million. Across town, Ralph owns two adjacent properties on Roseld Avenue. No need for him to head to the gym — the homes include a pool, tennis court and half-basketball court. And if he runs out of space, he can always retreat to one of the two other adjacent houses he owns up the street. Or, perhaps, one of the other two homes owned by Nakashes in Deal.

Gindi Cayre Joseph Cayre, the head of Midtown Equities, owns 18 and 24 Deal Esplanade and co-owns the adjacent plot at 11 Marine Place with his son Jack. The compound includes two main houses, a tennis court and a baseball diamond. And one of the lots is vacant, leaving open the door for another expansion. In addition, the compound has a block’s worth of beachfront plus an undeveloped beachfront plot. Cayre — who with his brothers founded the disco label Salsoul Records in the 70s and the video production company GoodTimes Entertainment in the 80s — owns two more adjacent homes on Queen Anne Drive. The Cayres grand total? Ten properties in Deal, plus four in Long Branch.

Adjmi The Adjmi family’s ACHS Management and A&H Acquisitions own and manage over 100 retail properties nationwide, many of them in New York. Alex Adjmi, president of both companies, makes his summer home just down the coast from Deal in Allenhurst, but his brother Harry, the “H” in A&H Acquisitions, owns five Deal properties. In 2005, he bought a roughly 6,700-square-foot house at 136 Ocean Avenue for $6.1 million. He followed that up with the purchase of the slightly more modest house next door in 2013 for $2.6 million. He owns three more properties up the street on Parker

American Realty Capital

Chehebar The Chehebar family founded the Brooklyn-based Rainbow Shops retail chain in the 1930s. Today it has 1,300 U.S. stores and is a staple in urban retail hubs and sub-

Jemal Members of the Jemal family, who co-founded the now-defunct-but-very-memorable Nobody Beats the Wiz electronics store chain, also have a big presence in Deal. The family first moved into real estate with the ISJ Management Group in the 1970s. More recently, brothers Samuel and Joseph founded the Jemstone Group, a real estate firm based in Manhattan that focuses mainly on the New Jersey suburbs. Samuel owns two Deal properties, including 48 Brighton Ave., which sits a half block from the ocean, has a tennis court, and is right next to the Deal Casino. The family owns five homes in a two-block area, one owned by Joseph and two by Alan Jemal, also of Jemstone. Meanwhile, Douglas Jemal, founder of D.C.-based Douglas Development and older brother to Marvin Jemal, who founded Nobody Beats the Wiz, owns two homes in Deal and a whopping 10 plots in Allenhurst, three of which have homes on them. In total, 26 area properties bear the name Jemal.

Tawil Ventura Enterprises, run by CEO Saul Tawil, has been importing clothing for decades. In the 1990s, Ralph Tawil founded Centurion Realty and amassed a retail and office portfolio centered in Soho. In Deal, the Tawils own three marquee properties on adjacent blocks off of Ocean Avenue. Ralph Tawil has a home at 8 Seaview Lane that Zillow puts at 5,300 square feet. Meanwhile, Elliot Tawil, who works for Sutton at Wharton, and Edward Tawil, a broker at Corcoran Group, have places nearby. Saul’s home, which includes a tennis court and half-basketball court, sits across town at 102 Deal Esplanade. Saul and Elliot Tawil each own a house in Long Branch as well, along with an apartment at 787 Ocean Avenue that they own together. Owners named Tawil are listed on 30 properties in the area in total. TRD

from page 50

the company replaced its accounting firm, Grant Thornton, with Deloitte and then brought on a new general counsel: Lauren Goldberg, a former Assistant United States Attorney and chief compliance officer for cosmetics firm Revlon.

Those moves are in line with what other major firms have done in the wake of accounting scandals.

For example, British supermarket chain Tesco dropped its auditor of 20 years, PricewaterhouseCoopers, in January for Ernst & Young in the wake of accounting irregularities that prompted a fraud investigation.

But getting the accounting in order will likely be the easy part. Observers say ARCP has been way too aggressive in buying properties for above market rate and expanding too rapidly.

“They started to show value where everyone else was scratching their heads,” Germain said.

Meanwhile, in June 2014, ARCP investor Richard McGuire of investment firm Marcato Capital wrote a letter 104 August 2015 www.TheRealDeal.com

The discount department store Century 21 is something of a landmark in Lower Manhattan — taking up a prime piece of retail space directly across from the World Trade Center site.

Cousins Sonny and Al Gindi built their fortune by founding that chain in the 1960s. Like many others in the SY community, their empires grew beyond retail into real estate. In 2012 their firm Gindi Capital, sold a portfolio of 26 properties — focused in Manhattan, plus several buildings in Brooklyn and Queens—for $164 million.

In all, residents with the last name Gindi own 28 properties in Deal and surrounding towns. Al’s son Raymond Gindi, Century 21’s COO, owns 62 Jerome Avenue, Eddie Gindi which features a putting green.

He and Century 21 co-owner Isaac Gindi jointly own the house at 103 Ocean Avenue, one parcel away from the beach, between the Suttons and Deal Casino. Eddie Gindi, Century 21’s executive vice president, also owns two Deal properties, as does Eli Gindi, the former co-owner of the Oak Room and Bar at the Plaza Hotel. One of those is co-owned with his former Oak Room partner Jeffrey Gindi.

urban malls. In 2007, brothers Isaac, Elliot and Gabriel Chehebar used their family fortune and founded the Manhattan-based Jackson Group, which manages over $400 million in commercial real estate, according to its website.

Ike Chehebar, Jackson’s president, owns two Deal properties: a vacant lot, and a roughly 3,200-square-foot home on Ocean Avenue, assessed at $2.7 million. And luckily for him, he doesn’t have to go far if he wants to meet up with his brothers for a swim. Elliot and Gabriel Chehebar each own a home there as well. Meanwhile, Jack Chehebar, who also works for Jackson, owns three more Deal properties, and Joseph Chehebar, the CEO of Rainbow, owns one more, plus another in Ocean Township just to the West. In total, the Chehebars lay claim to 18 properties in the area.

to the management, complaining about the company’s investment strategy (see related story on page 52).

“The company is engaging in too many transformative actions too quickly,” McGuire wrote.

Cutting ties If industry speculators are correct, Rufrano will be taking action to further cut ties to Schorsch and anyone who was part of the leadership team during his reign.

While ARCP technically spun off from Schorsch’s American Realty Capital when it went public in 2011 and Schorsch formally stepped down as ARCP’s chairman last year, some investors have complained about some remaining links.

Keith Meister, head of hedge fund Corvex Management — which is an investor in ARCP — sent a letter to the REIT’s management in February urging it to replace its board with “truly independent directors” and to “purge any remaining ties with past affiliated entities and leadership.” While

Schorsch no longer had formal ties to the company at the time of the letter, Meister was clearly implying that people close to him were still on the board.

Two board members — Leslie Michelson and former Pennsylvania Governor Edward Rendell — have since stepped down, but a new board won’t be named until the annual meeting in late September. Investors will undoubtedly be paying close attention to who is appointed.

And, the company name change, which is coupled with the company’s shift to the New York Stock Exchange from Nasdaq, is just one of many steps in the cleaninghouse process.

Robert Rostan, head of financial education company Training the Street and a former accountant at Deloitte, said for firms like ARCP getting back on track is “largely a function of time and keeping their house in order.”

“Most of the time these things blow over,” he said. TRD

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Residential agents

from page 20

on Bravo’s “Million Dollar Listing New York.” Commercial deals represent 10 percent to 15 percent of the duo’s business, and Gomes said they frequently field calls from developers hunting for opportunities.

Eklund and Gomes are in the midst of selling the 37 condos at DHA Capital’s 50 Clinton Street, a project they brought to the developer. They first worked with former owner Icon Realty Management, which bought the site for $7 million in 2012 and sold it to DHA for $28 million in 2014. The building’s total sellout exceeds $78 million. “We were working on this deal from the beginning,” Gomes said.

“It was in the best interest of the developer who bought it to hire us.”

Off-market finds Most of the commercial deals that residential brokers handle are off-market opportunities, which often flow organically from their daily business of selling apartments.

Elliman’s Patty LaRocco started selling commercial buildings in Tribeca, where she lived and worked for years. “I know a lot of building and loft owners,” she said. “When Tribeca was getting super-hot in 2005, they wanted to sell.”

She’s since branched out to other neighborhoods in Manhattan and Brooklyn. To date, she’s sold $150 million worth of commercial properties, including a former warehouse at 74 Ferris Street in Red Hook, which developer Est4te Four bought for $17 million. Est4te Four is now building 22 townhouses at the site and LaRocco is the sales agent.

“I sourced it, sold them the land and [determined] the highest and best use of the property,” she said. “If you get embedded in a neighborhood, people come to you.”

Gomes said he and Eklund only sell off-market

Commercial market

commercial properties. “Once it goes to the public market, you can bet your bottom dollar it will be really expensive and there will be a lot of people competing,” he said.

Similarly, Elliman’s Robert Dvorin sold a one-story garage at 30 Thompson Street in May for $13.1 million to a joint venture led by Adam Weis’ Weis Group, Mavrix Group and Tribeca-based builder Walker Ridge. The seller was Empire Office CEO Peter Gaslow. The spot will soon see a Karim Rashid-designed boutique condominium rise seven stories with fewer than 10 units, priced upwards of $3,000 per square foot.

Commercial complexities Still, brokering commercial deals isn’t for every residential agent.

Compass’ Leonard Steinberg, who is known for selling high-end new development condos, generally does not sell development sites. “We’ve helped with one or two along the way,” he said, “but we’re mostly focused on helping our developers evaluate the best and highest use of different sites they’re looking at.”

David Maundrell, president of aptsandlofts.com, also doesn’t sell sites, in part because of the complexities involved and also because many properties are sold via the open listing system, meaning there is no exclusive and any broker can bring a buyer. “My time is too valuable to be wasted running around on open listings,” he said.

Sotheby’s Schuster said having a deal’s fee structure and confidentiality agreement established early on is key.

“It’s more cowboy town in that world,” he said of the commercial market.

To be sure, commercial deals can be far more complex than residential sales, particularly if there are zoning and environmental restrictions. There’s also a longer due diligence period. “A lot can go wrong with a commercial

deal,” LaRocco said.

Schuster agreed. He’s working with a seller who’s given him permission to bring in potential buyers. But, he said, “It’s just an opportunity. It’s not a done deal.”

The extra effort can pay off, though. Brokering development sites can be extremely lucrative. “That’s where I think the big brokers are making the biggest net income, not just selling condos anymore,” said Nest Seekers’ Serhant.

Typically, brokers earn 1 percent to 3 percent commission on a commercial deal. “Million-dollar commissions are not uncommon. [And] some people pay more for off-market deals,” Maundrell said. If the agents are tapped to sell the condos, they collect commission on those sales, as well. “The numbers are tremendous,” he added.

The high stakes, of course, means competition is high.

Elliman’s LaRocco said she doesn’t compete with big fish at commercial firms like CBRE or Eastdil Secured. “I don’t go after exclusives, I’ll work for a buyer with a specific need and get it for them,” she said. “It happens very organically.”

But other brokers said that, in essence, every deal they do is one that a commercial broker lost out on.

Town Residential’s Eric Sidman put it this way: “There’s so much money at stake, lots of people are chasing the same deals.”

In addition to brokering sites, some residential agents are dabbling in development themselves.

Sidman, for example, recently launched sales at a sevenunit condominium he developed at 629 Grand Street in Williamsburg, which is located about four blocks from where he lives. One-bedrooms start at $638,000, and there’s a two-bedroom that will ask $1.375 million. Four units were in contract by early July. “I used my market knowledge,” he said, “and built a product that I thought the market was really looking for.” TRD

from page 26

Top 10 commercial loans in NYC RANK

BORROWER

ADDRESS

PROPERTY

AMOUNT

LENDER OR LEAD ORIGINATOR

1

Silverstein Properties

3 World Trade Center

Office

$1.59 billion

Port Authority, New York Liberty Dev.

2

Tishman Speyer Properties

200 Park Avenue

Office

$1.4 billion

Bank of America

3

Hudson’s Bay

611 Fifth Avenue

Commercial condo

$1.25 billion

Bank of America

4

Ivanhoé Cambridge, Callahan Capital Properties

1095 Sixth Avenue

Commercial condo

$1.13 billion

Deutsche Bank

5

General Growth Properties, Jeff Sutton

730 Fifth Avenue

Office

$1 billion

Deutsche Bank

6

Brookfield Property Partners

3333 Broadway

Multi-family

$800 million

Fannie Mae

7

RXR Realty

230 Park Avenue

Office

$785 million

American International Group, et al

8

Stahl Organization

277 Park Avenue

Commercial condo

$750 million

Deutsche Bank

9

Tishman Speyer Properties

512 Madison Avenue

Office

$675 million

Bank of America

10

Vornado Realty Trust

2 Penn Plaza

Office

$575 million

HSBC

Source: CrediFi. Data represents the largest commercial loans, traditional and CMBS, from July 1, 2014 to June 30, 2015.

Also driving lending in the market is the looming rise in interest rates, which most expect to happen in the coming months or years, although no one is sure when.

“Borrowers want to lock in the lower rates,” said Sean Barrie, a research analyst at Trepp.

106 August 2015 www.TheRealDeal.net

Mortgage lending professionals said CMBS loans are more restrictive.

“Most borrowers will choose a balance sheet lender any day over a CMBS lender,” said Gregg Winter, managing partner of Winter & Company Commercial Real Estate Finance.

He noted that CMBS often has high prepayment penalties or other restrictions that make it more difficult to modify the loan after closing than traditional loans. “There’s no comparison between the post-closing flexibility that’s available to a borrower.” TRD

REITs activists

from page 52

bid from Simon Property Group, the country’s largest REIT. Litt’s open letter to Macerich Chairman and CEO Art Coppola calling for governance changes was partially successful. In May, investors eliminated the stockholder rights plan — the so-called “poison pill” put in place to prevent Simon Property’s hostile takeover — and announced it would nominate two new independent directors, though Litt had wanted four.

Litt said he usually works quietly with management, but in cases where he meets resistance, he will deploy the tactics used by some of the more publicity-friendly investors.

“We work mostly behind the scenes, but in select cases,

we’ll be more public if [management is] not responding to unlock that value,” he said.

Not all activist campaigns are successful, of course. A trio of pension funds has twice tried unsuccessfully to shake up leadership at Vornado Realty Trust.

In 2013, the Central Laborer’s Pension Fund, the Connecticut Retirement Plans and Trust Funds and the United Brotherhood of Carpenters Pension Fund filed proposals that would give investors a greater voice. They included switching to the majority vote standard and having an independent chairman, a direct play to remove CEO Steven Roth from his dual role as chairman, which he

stepped into when Michael Fascitelli resigned in early 2013.

Connecticut State Treasurer Denise Nappier said that, as a matter of practice, she felt there is weak protection against conflicts of interest when a CEO serves as chair.

“In the case of Vornado, you have to ask, ‘Whose side is the board on?’ because for four of the past five years now, Vornado has failed to nominate an independent chair despite a majority of its shareholders voting for such a change,” she wrote in an email.

Vornado’s board voted down all three measures in 2013, and once again last year when they were reintroduced. None of the three investors filed proposals this year. TRD

FOLLOW US@TRDNY

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A U G U S T 1 The Brooklyn Historical Society hosts its quarterly Brooklyn Real Estate Roundtable. More than 100 real estate professionals will attend. Speakers are Jeffrey Simpson, CEO of Greystone Property Development, and AJ Pires, partner, Alloy Development. 12 p.m. at the Brooklyn Historical Society, 128 Pierrepont Street, Brooklyn. Fee: $300. Information and registration: brooklynhistory.org.

4

The American Institute of Architecture, NY Chapter, presents “The Politics of Preservation,” a lecture on the New York City Landmarks Law and the politics surrounding the process. Morris Adjmi, founder of Morris Adjmi Architects, Peg Breen, president, New York Landmarks Conservancy and Kenneth Fisher, member, Cozen O’Connor, will be the speakers.

6:30 p.m. at the Museum of the City of New York, 1220 Fifth Avenue.

Fee: $12 for AIA and MCNY members, $16 for non-members. Information and registration: aiany.org.

6

2 3 4 5 6 7 8 9 10

6

13 14 15

The Young Men’s/Women’s Real Estate Association of New York takes members and applicants out to the ballgame to cheer on the Yankees against perennial rivals the Boston Red Sox. Game starts at 7:05 p.m. at Yankee Stadium, 1 East 161st Street, the Bronx.

Fee: $80 for tickets. Information and registration: www.ymwrea.org.

18 19 20

10

17

The Institute of Real Estate Management offers a four-day Management Plan Skills Assessment, a course and examination that meets the management plan requirement for the Certified Property Manager designation. 8 a.m. to 5 p.m., continuing on Aug. 18, 19 and 20. Knickerbocker Plaza, 1751 Second Avenue. Fee: $1,295. Information and registration: www.iremnyc.org.

17

21 22

The Real Deal hosts its fifth annual golf outing. Last year’s trip to the links drew over 100 New York real estate players. Food and drinks will be served. All day, Baiting Hollow Golf Club, 11 Club Drive, Baiting Hollow, N.Y. Fee: $300 dollars for individuals; $1,000 for foursomes. Information and registration: www.therealdeal.com.

The Building Owners and Managers Association, New York Chapter, offers a three-day educational program on Environmental Health & Safety Issues. Jerome Silecchia is the instructor. All day, continuing on Aug. 18 and 19. BOMA/NY, 11 Penn Plaza. Fee: $1,235 per person plus $90 processing fee. Information and registration: www.bomany.org.

16 17

6

Commercial Real Estate Women of New York holds its third Leading Ladies Breakfast, concluding the series. Susan Swanezy, partner at Hodes Weill & Associates, a global real estate advisory boutique, is the speaker. 8:30 a.m. at Akerman, 666 Fifth Avenue. Fee: $30 for members; $50 for members of other CREW chapters; $60 for non-members. Information and registration: www.crewny.org.

12

11 12

The New York University School of Professional Studies offers an information session for college graduates interested in advanced studies in subjects including project management, real estate brokerage and financial planning. 6 p.m. at the NYU Event Space, 238 Thompson Street. No fee. Information and registration: www.scps.nyu.edu.

CoreNet, NY Chapter, hosts its NYC Women’s Community Summer Networking Reception, featuring food and drinks, rooftop views and networking with senior real estate professionals from top companies. 6 p.m., Refinery Rooftop, 63 West 36th Street. No fee. Information and registration: newyorkcity.corenetglobal.org.

12

23 24 25

The Skyscraper Museum hosts a talk featuring Jake Rajs and Francis Morrone, the photographer and author of “New York City Landmarks,” an architectural photography book.

6:30 p.m., The Skyscraper Museum, 39 Battery Place. No fee, registration required. Registration and information: www.skyscraper.org.

19

26 The Council of New York Cooperatives & Condominiums hosts a seminar for building managers, Your Hot Water System: An Energy Saving Opportunity. Engineer Eric Ansanelli will instruct attendees on steps for increasing the efficiency of water heating systems. 7 p.m., location TBA. Fee: free for members; $50 advance for non-members or $65 at the door.

Information and registration: www.cnyc.com.

12

27 28 29 30

Real Estate Investors Association of NYC presents a training session for real estate professionals and aspiring investors, “Turning Your Passion into Six Figure Profits,” with lecturer and consultant Teresa Martin. 1 p.m., TRYP Hotel, 345 West 35th Street. Fee: $39. Information and registration: www.reianyc.org.

29

31 114 August 2015 www.TheRealDeal.com

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

LUXE

“I liked the loft buildings in the area. To me, it was classic Lower Manhattan.”

Gawker’s recent too-long piece about ghost-hunting in NYC’s “most haunted building,” Merchant’s House Museum, using an EMF ghost meter and two ghost hunting i-Phone apps.

This pet-friendly restaurant in NoMad, Toshi, is doggone adorbs.

“It Is What It Is” and it’s a mess: Failed developer Colin Rath’s error-filled, selfpublished book prompts the thought that if this is how he handles all projects, it’s easy to see why his development foray went bust.

Locals protest Museum of Natural History plan to erect new building on adjacent parkland because it “will devour priceless green space and destroy at least nine stately trees.” #NIMBY

NY Mag highlights a Brooklyn artist couple living in a “cozy” 650-square-foot 1bdrm with two children and a bed in the living room who try desperately to make it sound romantic.

You lookin’ at me?

Actor Robert de Niro explains to the U.K.’s Telegraph how as the area’s unofficial amabassador, he helped change the face of Tribeca over the last 40 years.

Leonard Steinberg shows off hottest new property amenity on social media: a vault door to keep the building’s basement-housed mechanicals watertight even in a flood.

A celebration of mundanity: the Met’s Wolfgang Tillmans video installation exhibit Book for Architects is a curation of the most utilitarian contemporary architecture of the last 10 years.

On “Comedians in Cars Getting Coffee,” Jerry Seinfeld tells incoming “Daily Show” host Trevor Noah the “O” was added to Dumbo because no one wanted to live in DUMB.

Because social media is for posting food pics: This tower of macaroons celebrating the opening of the Baccarat Hotel & Residences via NY Post’s David Kaufman’s Facebook page ...

FAIL

RLTY NYC sponsors “A Night to Let it Be” exhibiting original drawings created for the Beatles short film, “She Said So” which first hung in MOMA, to celebrate its Soho office opening.

WIN

Because his salary barely covers maintenance on his loft in “one of the trendiest zip codes on the planet,” a Vice editor lists a bag of “Williamsburg air” on eBay for $20,000.

How the mighty have fallen: Famed YA novelist Bennett Madison writes Apartments. com-sponsored post on Gawker.

Comedian Colin Quinn tells the Observer that Park Slope “was a special place to grow up. Everyone felt it -- except the murder victims.”

Jeffrey Deitch and developer Joe Sitt host opening of Coney Art Walls, an outdoor museum of street art featuring the work of 30 celebrated artists, including Shepard Fairey.

Non-profit East Harlem community garden owner sells garden air rights for $500,000 and acquires more land for green space.

… And because the Internet is pretty much only good for porn and cat pix: “Trump Your Cat”

This map highlighting the many faces of Williamsburg from a Craigslist ad point of view.

A 24-year old recent buyer of a Jackson Heights 1BR laments that brunch “doesn’t happen” in the nabe and she’s forced to go to Brooklyn to get her fix in a recent NYT Hunt column.

Que lastima! Property owners Coltown Properties say adios to an entire block of Latino businesses in Washington Heights.

Los Angeles Magazine essay features writer contemplating leaving the city because of “high rents” we only wish we had: the avg 2BR rents for $2,550.

Perhaps he should move to Detroit?

East Villagers frustrated over crowds at of-themoment veggie eatery Superiority Burger glue rocks to tree wells to prevent loitering, winning ultimate game of rock, paper, scissors.

Detroit>Brooklyn: Hilarious parody blog “Fifty Shades of Grey Lady” highlights NYT article suggesting the NYC creative set will set up base in Detroit because it is “like a grown-up version of Williamsburg.”

Nutty subway vigilante Bernie Goetz fights eviction over illegally squirrelling away threelegged pet squirrel.

Boerum Hill Deli posts tongue-in-cheek “artisanal” product posters to highlight what they’d have to charge to stay in business with proposed rent hikes.

Celebrating 20 years of free performances, Shakespeare in the Parking Lot returns this summer to a new LES lot after being displaced last year due to mega-development Essex Crossing.

Real life imitates art: “Escape the Room,” an interactive 60-minute game sweeping NYC in which participants are locked in a room and must solve a series of puzzles in order to escape, offers version called “Escape the NYC Apartment.”

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COMINGS & GOINGS REBNY promotes Whelan to executive VP

Movers and shakers

he Real Estate Board of New York promoted James Whelan, a former Bloomberg administration official and Muss Development executive, to executive vice president.

Whelan has served as REBNY’s senior vice president of public affairs since 2010 and will now “lead the organization’s initiatives to address select political, communication and advocacy issues,” REBNY said.

Whelan’s new role will see him get more involved in politics at a time when the industry needs to reach an agreement with construction unions on wages for projects receiving the 421a tax incentive. The deal to preserve 421a, reached in Albany in late June, requires an agreement by January, or the tax abatement program will be scuttled. If they do finalize a pact, it will be extended for four years.

In his previous role, Whelan worked on advocacy and political issues, including REBNY’s strategy on crane operators and its efforts to change how the city evaluates historic districts.

Before joining the powerful trade organization, he served as senior vice president for public affairs at Muss Development and also as chief of staff and senior advisor to Daniel Doctoroff when he was deputy mayor for economic James Whelan development under Mayor Michael Bloomberg.

Whelan’s experience also includes time as executive director of the Hudson Yards Coalition.

REBNY president John Banks succeeded Steven Spinola as head of the influential industry organization at the end of June. By Rey Mashayekhi

JLL brought aboard Steven Robinson as a vice president of retail brokerage. He will handle new business development, retail tenant representation and agency leasing services. He spent the prior 10 years at CBRE, where he was a vice president. Robinson has completed approximately 200,000 square feet in retail Steven Robinson transactions and $500 million in investment sales during his career.

Charles Russell joined Warburg Realty as sales director for its 654 Madison office. He was previously manager of marketing and new business development at Stribling & Associates, and has also worked at Corcoran Sunshine and Douglas Elliman.

Brown Harris Stevens promoted Gregory Zammit to senior vice president of management accounting, responsible Cher Chang for accounts receivable. Zammit joined the firm in 2011 from Afreshstart, a trading firm. BHS also hired Anthony Milstein as a vice president in the residential management division. Prior to joining BHS, Milstein was managing director and team leader at FirstService Residential New York, and previously worked at Andrews Building Corp.

SGW Properties tapped Neil Stern as vice president of corporate development. He was previously director of marketing for healthcare consultant Senior Planning Services.

Cher Chang, formerly a portfolio manager at KCC 236 Holdings, and Jianhao (Michael) Zeng, formerly of China Merchant’s Bank, joined Carlton Group’s equity placement team.

GFI Capital Resources Group hired Eyal Karni as vice president of accounting Eyal Karni and compliance, a newly created position. He was previously managing director and global assistant corporate controller of accounting for Cushman and Wakefield’s New York corporate headquarters.

Leah Carr was promoted to managing directorproperty management at Margules Properties.

Angie Lee The new responsibilities are in addition to her role as acquisitions manager for new investments. Edward Margules also joined the company, as a property manager acquisitions associate.

Angie Lee joined FXFOWLE Architects as a principal and design director for interiors.

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Elliman taps Wilson as new development deputy eslie Wilson, a former senior vice president at the Related Cos., is now overseeing new development marketing efforts at Douglas Elliman.

Wilson, who was one of Related’s top salespeople, was named senior executive vice president and managing director of Douglas Elliman Development Marketing last month.

She is the top deputy to Susan de França, president and CEO of the brokerage’s new development division.

By hiring Wilson, Elliman is beefing up its fast-growing new development team, whose portfolio of projects includes Macklowe Properties and CIM Group’s 432 Park Avenue and Stella Tower, developed by Property Markets Group and JDS Development.

“Leslie’s decision to join Douglas Elliman marks yet another significant milestone for the company,” Elliman Chairman Howard Lorber said in a statement.

Wilson and de França previously worked together at Related, where de Leslie Wilson França was president of Related’s sales division until her move to Elliman in 2011. “We are long-time colleagues and friends. Even though I wasn’t at Douglas Elliman, I always had a front-row seat, watching the evolution of the development marketing,” Wilson said.

As a senior vice president at Related, Wilson oversaw $2 billion worth of luxury condo developments. She sold condos at the developer’s 57-unit Superior Ink building in the West Village as well as its 53-unit condo project at One Madison.

She became dually licensed at CORE last year, after Related acquired a 50 percent stake in the boutique brokerage. “I loved working for Related,” Wilson said. “But now I can extrapolate that experience and do it for multiple developers.”

Previously, she spent 19 years working on Wall Street, and later worked for the Trump Organization.

By E.B. Solomont

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Gricar to head sales at Houlihan Lawrence

Also on the move

im Gricar, who stepped down as president of Halstead Property in March, landed at Houlihan Lawrence in Westchester County, where he was named general sales manager.

In his new role, Gricar oversees sales and agent development for Jim Gricar the firm’s residential, commercial and project marketing arms. The brokerage has 30 offices and over 1,200 agents spread throughout New York City’s northern suburbs, according to its website.

Gricar will also work on business development initiatives, alongside CEO Stephen Meyers and managing principal Chris Meyers, who lead the brokerage with Nancy Seaman, their sister and the company’s chair.

“New York City fuels our entire region and Jim’s firsthand city knowledge, combined with his sales prowess, uniquely positions him for success in our company,” Chris Meyers said. “He has key relationships that will strengthen our ability to serve clients relocating to our communities, which is happening at an increased rate.”

Gricar, who became president of Halstead in 2013, stepped down when his contract expired. He previously served as general sales manager at Halstead, and executive vice president and managing director of sales at Brown Harris Stevens’ West Side division.

“I see this new position as a dream opportunity,” Gricar said. “I am truly excited to be working alongside Nancy, Chris and Stephen, who I have known for years and have the utmost respect for.”

Houlihan is headquartered in Rye Brook, New York. By Tess Hofmann

Engel & Völkers hired the team of Jennifer Roberts and Randi Fisher, as the FisherRoberts Team, as sales advisors.… Stribling & Associates hired Eyal Zabari and his assistant Lissette Nolasco of the Zabari Team, and the brother-sister team of Zafir Uddin and Riyah Mahariya.... Douglas Elliman brought on Scott Fava and Christine Barranca, both recently of Compass.

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118 August 2015 www.TheRealDeal.com

Jennifer Roberts and Randi Fisher

Announcements Zach Vella of VE Equities married Michelle Campbell at Ashford Castle, County Mayo, Ireland.

Zach Vella and Michelle Campbell

Will the stars align for “The Liar’s Ball?”

WE H E A RD

Even the producers of the GM building saga dream of Brad Pitt

t’s not to hard to envision Josh Brolin and Gene Hackman deep in negotiations on one of the most talked about real estate transactions in New York City history. Or a shiny conference room — or smoky backroom even — where Brad Pitt and Dustin Hoffman wrangle over a $1 billion transaction.

With “The Liar’s Ball” — Vicky Ward’s nonfiction bestseller about the redevelopment of the iconic GM Building — being turned into a movie, the real estate world is playing a guessing game about which A-listers will portrayy New York’s most powerful real estate magnates.

Early rumors had Pitt portraying former Vornado chieff Michael Fascitelli. But Neal Dodson, one of the producers, said it’s way too soon to officially talk about which actor will be cast as which mogul. “We’re not there yet,” Dodson told The Real Deal.

The director is set: J.C. Chandor, best known for directing 2011’s Academy Award-nominated “Margin Call.”

Zachary Quinto, known both for his behind-the-scenes work as well as his on-screen turns as Spock in the latest “Star Trek” movies, will serve as executive producer. And Gideon Yago, who wrote for HBO’s “The Newsroom,” is at work turning Ward’s tome into a screenplay.

Once the script is finished, the team will sit start thinking

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Brad Pitt as Michael Fascitelli? Or Josh Brolin?

Gene Hackman as Harry Macklowe? Or Mel Brooks?

about casting, with the help of a casting director.

Casting has its own protocol in the movie-making process, Dodson explained. Household-name actors like Pitt and

Brolin are snagged by making offers to their agents. Smaller roles will likely be cast through an audition process.

While the Pitt rumor wasn’t confirmed by anyone — including Ward herself, who said she isn’t involved in casting — nabbing the superstar isn’t out of the question.

“There’s no producer who wouldn’t love to work with Brad Pitt,” said Dodson.

Finding the perfect fit for the roles involves assessing both looks and other qualities. b But that doesn’t mean a producer can’t dream.

For Fascitelli, Dodson said, he could see Brolin — best known for his roles in “W.” and “No Country for Old Men” — in the part, if Pitt doesn’t sign on.

For Macklowe, Dodson has a clear, yet most likely unattainable idea. “Gene Hackman would be an amazing Harry Macklowe,” he said. If the Oscar-winning legend isn’t available? “Mel Brooks would be totally perfect.” (Yes, he meant that Mel Brooks.)

While Donald Trump plays a role in the earlier years of the story about the GM Building, it’s not clear yet whether or not the mogul and presidential candidate will make it into the screenplay. The script will hone in on Macklowe’s involvement in the deal, Dodson said, simply because the whole book will not fit into a screenplay. But, from a casting standpoint, including the Donald wouldn’t be easy either. “Trump,” Dodson said, “is impossible to cast.”

By Claire Moses

After the game: NBA stars shoot for real estate wins Heat’s Luol Deng, Knicks’ Lou Amundson and others get investing advice uol Deng, once a refugee from war-torn South Sudan, is 30 years old and extremely rich. In 11 years of professional basketball, the 6-foot-9-inch-tall small forward has made close to $100 million.

It’s only natural that Deng thinks a lot about what to do with all that money. Recently, much of that thinking has revolved around real estate.

“Throughout my career, I’ve been trying to find something that I really love doing,” Deng told The Real Deal. “And I looked at real estate as something you could really get into, if you understand it and if you have capital.”

The Miami Heat player was among 10 NBA stars who attended a day-long seminar on real estate investing organized by the National Basketball Players Association last month.

Avison Young principal David Eyzenberg played professor, talking to New York Knicks center Lou Amundson, Charlotte Hornets guard Brian Roberts and his wife, Jenna, and others about cap rates, joint ventures

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and due diligence, while the players scribbled notes like properties in South Sudan, and found that other players were also interested in real estate. very, very tall college students.

In essence, he taught them how to avoid common “It’s straightforward, it makes sense and they feel like mistakes when investing in commercial real estate. there’s no hocus-pocus, no voodoo where one day it’s going “This has been by far one of the most personally to disappear, like some of the financial instruments that they gratifying things I’ve done,” he said. “They know are pitched,” Gross said.

The NBPA, long wary of players going broke what they want to learn about, and what you teach them will have a meaningful impact on after retiring, incorporated the idea into its career their activities.” development program aimed at helping The program also featured a guest them ease into life after basketball. lecture by developer Don Peebles.

“These guys come out of the NBA The idea for the class came and they have these bank accounts, from Deng and his business but not necessarily a direction they manager David Gross, a former want to go in,” said Jenna Roberts, banker and graduate of Columbia the only spouse who attended.

“And real estate is a good way to University’s master’s program in real estate Heat’s Luol Deng, Knicks’ harness the drive from the NBA.” development. Gross and Deng invested in a Lou Amundson and others pick up investing tips residential project in London and developed

By Konrad Putzier

Hipsters in wonderland Down the rabbit hole of wacky new development campaigns N obody can say there’s a lack of demand for New York City real estate. That doesn’t mean, though, that developers aren’t trying to sweeten the pot by making their new projects as cool as humanly possible for the young and hip.

Welcome to the age of hipstertargeted marketing efforts.

DDG, for example, is publishing an entire comic book by DC Comics illustrator Shawn Fuchsia tresses aim to Martinbrough as part of its attract hipsters to 1N4TH.

120 August 2015 www.TheRealDeal.com

marketing efforts for its Soho chocolate factory-turnedcondo building XOCO 325. To decipher the name, you’ll need a Catalan-English dictionary (xoco = chocolate) to pick up on the tribute to the Tootsie Roll factory that once occupied the site.

At 15 Renwick, Izaki Group Investments subsidiary IGI-USA employed a host of steampunk-themed models dressed in everything from Victorian-era corsets to “Cinderella-Man”-inspired boxing gloves and trunks.

Renderings of the building’s exterior showcase blimplike aircrafts, horses and buggies and majestic sailboats.

Which of these objects is not like the rest? Hint: the one you’re buying!

At The Dermot Company’s 66 Rockwell Place in Downtown Brooklyn, tattoos mark its residents as the types who go against the flow (together with the 325 other residents of the new development). Some perks include in-house programming by the Brooklyn Academy of Music and BRIC to keep fueling the creative fire that will ultimately — hopefully — inspire more tattoos.

And along the Williamsburg waterfront, Douglaston Development has gone all-in on its advertising, repeating an image of a stoic girl with fuchsia tresses.

We like to think of her less literally than as a “through the looking glass” reflection of your spirit, creatively awakened as it will be, once you settle in your new pad.

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3. For EverBank Preferred Portfolio loans only. Minimum loan amount of $250,000. Subject to the review and approval by condo review team based on overall project risk. Program guidelines are subject to change. Contact our team for more information.

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15ERM0066. EverBank NMLS ID: 399805 © 2014-2015 EverBank. All rights reserved.

THE CLOSING

JOSHUA

MUSS Joshua Muss is the principal of Queens-based Muss Development, a family company founded by his grandfather Isaac in 1906. The firm has developed more than 15 million square feet of real estate in New York City. Its projects have included a 1,200home residential community in Staten Island called the Woodbrooke, which it built in the 1980s, and the Renaissance Plaza in Downtown Brooklyn, which has a 900,000-square-foot office building and a 667-room Marriott Hotel. More recently, it completed Oceana, a 15-building, 865-condo community in Brighton Beach as well as Sky View Parc, a $1 billion, three-tower project in Flushing.

Muss’ son Jason has taken over the firm’s day-today operation, although the elder Muss still works.

The firm’s current projects include a 30-story residential building in Sheepshead Bay that it’s developing with national real estate investment trust Avalon Bay. NAME: JOSHUA LAWRENCE MUSS

BORN: MAY 15, 1941 HOMETOWN: QUEENS

Where do you live now?

Lawrence, Long Island. We [also] have a small apartment in Miami Beach. We’ve owned it for about 10 years and we’ve been in it a total of three weekends or something.

Did you always plan to join the family business?

It was inevitable. At the time, I thought my father was a builder; that’s what we called ourselves. Then eventually we became builder-owners and then developers.

Now it’s a matter of financing. No one is a pure developer anymore.

You went to law school before getting into real estate.

My whole life was prescribed in advance, where I was going to elementary school, high school and college. I rebelled on law school. My father wanted me to go to Columbia, where he went, and I went to Harvard.

What’s it like to run a company that’s been around for more than 100 years?

The incredible thing is that you survive in this business. My father saw the Depression and was always very conservative. I didn’t know what conservative meant. But I saw the Great Recession in 2007-2010; it does make you think twice about what you do the next time.

Who has been the greatest influence in your life?

My father. He would say, ‘If the project is good, you don’t need a partner; if the project is bad, you don’t want a partner.’ His only mistake was, when he crossed the bridge to do his greatest developments, it was the Verrazano and not one of the East River bridges.

Which project gave you the most trouble?

They all give you trouble. There’s not a night that you don’t get up and say, ‘What the hell was I thinking?’ — which is the name of the book I might write some day.

MARITAL STATUS: MARRIED 53 YEARS Where did you grow up?

Flushing and then Forest Hills. My father [Hyman] graduated law school in 1932 and became a pulpit rabbi.

Eventually, he joined the family business, which my grandfather started when he came to this country from Russia via Shanghai and South Africa.

You were 21 when you got married. How did you meet your wife?

My first date with her was at her cousin’s Sweet 16 party.

She invited me. I was her tennis counselor at camp and everything after that was inevitable.

122 August 2015 www.TheRealDeal.com

You wrote a chapter in Donald Trump’s “Best Real Estate Advice I Ever Received.” What’s your best advice?

I think the best advice is don’t try to do beyond what you can do. At some point, you’re going to put yourself at risk.

What do you think of his current presidential campaign?

He’s a great showman. I once called him the quintessential New York developer, although he’s outgrown that.

Are you the quintessential New York developer?

I’m not quintessential because I never really played with the big boys in Manhattan, but I certainly was on the vanguard of developing the boroughs. All of a sudden everyone’s found Brooklyn.

What do you make of that?

I wish I [had] bought more land. I never had enough money to buy as much as I’d like.

What do you find exciting about development?

As a kid, when you build a sandcastle and it gets all the way to the top, you say, ‘Wow!’ It’s the same thing. You’re playing with Tinkertoys. Every kid does that. But every adult can’t do that.

What do you think of the super-tall condos being built?

I wish I could build them. I’d like to be a part of it, but the fact of the matter is I was part of it 10 or 15 years ago. Now I’m doing it vicariously through my sons.

What’s been your biggest challenge?

Trying to balance my personal and professional lives. One is going to suffer if you concentrate on the other. I’m not prepared to say my family suffered, but I spent more time in the business than I should have.

What do you do in your spare time?

Visit with my 13 grandchildren and five great-grandchildren. And I’ll golf any course that allows me to play.

Your son Jason is a company principal. Was bringing him into the business a given?

It’s a very seductive profession. It can make you wealthy. It can also make you broke if you’re not careful. But it’s not an easy business to get into. You can start off as a contractor, broker or lawyer. But the best thing to do is to start off as a son or a daughter.

Do you feel you got a leg up in that way?

If you walk into a bank and say, ‘My name is Joe Smith,’ they will look at you and say, ‘Who are you? What have you done?’

I walked in and said, ‘I’m Joshua Muss,’ and it was like, ‘Oh, you’re Hyman’s son.’ When I said ‘I’m building 1,000 houses on Staten Island,’ they didn’t laugh at me. I laughed at myself. I didn’t know a two-by-four from a lally column.

Is that a lot of pressure?

There are times when it’s tremendous pressure. We had some major difficulties during the Great Recession.

What’s your greatest extravagance?

Giving to charity and playing as much golf as I can.

Do you gamble?

I gamble every day [in real estate], but not in Atlantic City. A long time ago, I realized I might as well give the money away. By E.B. Solomont PHOTOGRAPH FOR THE REAL DEAL BY ERIN PATRICE O’BRIEN www.TheRealDeal.com July 2006 00

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