The Real Deal May 2013 by The Real Deal

Inside the Kleiers’ command center

Harney on the hot U.S. market

Architects get busy with condo plans

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a t : rid or DE SI lo p IN F e h R ut et S o ar k M

Massive LES projects on tap

Broker tattoo time

THEREALDEAL N EW YO R K R E A L E S TAT E N E W S

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NYC’s top firms TRD’s annual ranking of brokerages ,

including two new lists of power players BY KATHERINE CLARKE, HAYLEY KAPLAN AND ADAM PINCUS With inventory tight, Manhattan’s top residential brokerages have less on hand to sell than in typical years. But that doesn’t prevent some from outperforming others. This month, we bring you our annual ranking of biggest firms and boutique firms along with two never-before published lists, one on mid-sized firms and another looking at closed transactions for 2012. See stories beginning on page 38

Vol. 11 No. 5 May 2013 $3.00

An office building boom Competition for tenants heats up as more new towers start to rise on Far West Side Cushman & Wakefield’s Bruce Mosler at the site of Brookfield’s Manhattan West mega-project.

Brokers woo buyers With a scarce number of sellers in the market, NYC residential brokers are taking on more buyers as clients. Several agents told TRD that within the last few months the number of apartment-hunters they’re working with has shot up by 50 percent. See page 16.

After a scandal, hotelier Ed Scheetz is back on the NY scene with big plans BY DAVID JONES After running Ian Schrager’s Morgans Group, Ed Scheetz disappeared from the city’s hotel scene because of a headline-grabbing scandal. But he’s re-emerged at the helm SPECIAL REPORT of the boutique startup King & Grove. With the backing of investor Joe Chetrit, the company has already embarked on an ambitious plan to develop 3,000 hotel rooms over the next 36 months in New York, Miami and other cities.

Hedge funds profit one home at a time Big-ticket investors like hedge funds have been buying up distressed single-family homes in places like California for a while. Now they’re looking to the NYC area for deals. See page 18.

See story on page 72

More developers going global

432 Park: beauty in its ‘freakish thinness’

Who’s most actively building abroad BY HAYLEY KAPLAN American developers have long gone overseas seeking profitable returns. But recently, they’ve started investing with even more force in countries like China, India, Mexico and Brazil. Inside, a look at which U.S. and New York developers have emerged as the most active in each area.

BY ADAM PINCUS space on the Far West Side. But the projects Only a few times in modern Manhattan histo- (and it’s not just Related’s Hudson Yards) are ry has an entirely new office disFEATURE STORY in fierce competition to land antrict sprung up all at once. This is chor tenants in order to get conone of those times. Developers are planning struction in motion. This month, TRD looked nearly 15 million square feet of new office at the biggest West Side rivalries.

See story on page 52

See story on page 49

The big squeeze

See page 126 PHOTO CREDITS ARE HERE

Class A office space on Lexington Avenue has a shockingly high availability rate of 26.6%, versus 13.5% in Midtown overall. See page 24.

AT A GLANCE

Scheetz, uncovered

Jon Tisch: I’m the Susan Lucci of my generation

FACT

Developed by Harry Macklowe and the CIM Group, 432 Park will be the city’s tallest residential building when complete. Critic James Gardner says there’s a beauty in the “freakish thinness” of the Rafael Viñoly designed tower. See page 74.

RXR’s reckoning

A close-up on Manhattan’s inventory shortage by nabe

Rechler goes on buying binge, aiming for repeat of boom

BY C.J. HUGHES It’s become the defining feature of the NYC residential market: the much-discussed inventory crunch. And none of the major Manhattan neighborhoods have been spared, according to an analysis of data provided to TRD by StreetEasy. Inside, a breakdown of which areas have seen the sharpest drop in homes on the market. You may be surprised.

BY ADAM PIORE Only in recent months has it become fully possible to evaluate who’s benefited the most from the downturn and recovery. Near the top of that list: Scott Rechler. Not only did he sell his former company at the top of the market to SL Green, he’s one of the most frenzied buyers of NYC commercial real estate today. And he sees more room for growth in the market ahead.

See story on page 56

See story on page 30

A rendering of 432 Park Avenue

A guide to ICSC A tick-tock of the must-attend events at this month’s mega retail conference — from panels to poolside parties. See page 69.

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MOSLER AND TISCH PHOTOGRAPHS BY MARC SCRIVO; INVENTORY ILLUSTRATION BY PETER BONO

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Highlights UN VEILED

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Brokers turn to buyers

Hedge funds target single homes

The Lower East Side lowdown

With fewer sellers in the market, agents shift to wooing apartment hunters.

With other distressed markets played out, big-ticket investors are starting to snap up single-family homes here.

Developers are vying to build at the biggest city-owned site south of 96th St.

A sketch of Broome Street showing the potential redesign of the Seward Park project on the Lower East Side.

22 The Kleiers’ control center The superstar siblings share more than just genes. Their side-by-side desks at Kleier Residential are an homage to their business — and their relationship.

Samantha Kleier Forbes and Sabrina Kleier Morgenstern

When erected in 1952, the United Nations Secretariat symbolized the latest advances in curtain wall construction. But rapid deterioration by the elements soon masked the transparency envisioned in the original design. Only after HLW International and R.A. Heintges & Associates undertook its replacement as part of a 21st-century update has the facade’s intended splendor been revealed. Now, along with adding the energy efficiency and blast-resistance required by its prominence, it gives the city a longdenied glimpse of the grandeur that helped shape global architecture in its day.

In their words...

Judging Judi

This month’s funniest and most insightful comments on real estate.

Town & Country founder Judi Desiderio on building a Hamptons brokerage — and making a mean chili.

reckoning 30 Rechler’s RXR Realty goes on buying binge,

aided by luck and an aggressive but careful acquisition strategy.

Transforming design into reality

the boom market back? 32 IsColumnist Ken Harney on “naked” contingency offers and other boom-time behavior.

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Town’s blowup 34 Stuy In a new book, NYT reporter

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RXR CEO Scott Rechler

Design Architect, Architect of Record: HLW International Architect of Record, Facade: R.A. Heintges & Associates Photo: UN CMP/John Woodruff and Peter Brown

8 May 20132012 www.TheRealDeal.com October www.TheRealDeal.com

Town and Country founder Judi Desiderio

Charles Bagli looks at the biggest real estate deal in U.S. history.

First-place firms TRD’s annual ranking of Manhattan’s biggest residential brokerages.

The in-betweeners

The best of the boutiques

A first-ever ranking of Manhattan’s growing mid-size firms.

Just a few listings can make a big difference for the small but elite firms. www.TheRealDeal.com March 2012 00

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Highlights continued far side 49 The Developers, brokers duke it

UP STAGED

out for office tenants along Manhattan’s western edge.

global growth 52 Chasing A look at the most active U.S. (and NYC) developers in hotspots around the world.

Local developers are ramping up global investments.

The inventory squeeze TRD’s neighborhood breakdown of Manhattan’s severe shortage of available residential properties.

much does townhouse width affect sales? 66 How Both extra-wide and super-skinny townhouses fetch a premium, but size is not always the ultimate factor in closing the deal.

complete ICSC guide 69 The The must-attend events at the Eero Saarinen is a tough act to follow. But when Lincoln Center sought space to build a home for its LCT3 program by adding onto his 1965 Vivian Beaumont opus, it found H3 Hardy Collaboration Architecture right for the part. Opting to locate the new stage atop the existing theater—a design made possible by using lightweight steel trusses as exterior walls—the architects were able to create the longspan spaces needed for theatrical productions while giving theatergoers a fresh vantage point from which to view both emerging playwrights and Lincoln Center’s exciting 21stcentury encore.

biggest retail conference of the year, including the panels and the parties.

Scheetz, uncovered

After a fall from grace, Ed Scheetz returns to the boutique hotel biz in force.

Commercial Market Report

Reports from around the country on significant developments and trends.

Hotelier Ed Scheetz

A rendering of 432 Park

The new king of the hill The height of Viñoly’s 432 Park will be matched by its quality, says critic James Gardner.

10 May October 20132012 www.TheRealDeal.com www.TheRealDeal.com

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

National Market Report

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

Architect: H3 Hardy Collaboration Architecture Engineer: Severud Associates Photo: Francis Dzikowski/Esto

Residential Market Report

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

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on growing up a Tisch 126 Tisch The hotel heir talks about his family’s empire and why he’s the Susan Lucci of his generation.

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

100

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

122

Comings & Goings The stories behind the latest job moves and company announcements.

124

We Heard A lighter look at industry buzz.

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Bronx: Aggregate sales of

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The Real Deal is a registered trademark of Korangy Publishing Inc. Copyright © 2013. Call 212-2601332 or e-mail news@therealdeal.com. Warning: It is illegal to photocopy or reproduce any part of The Real Deal without express written consent. For reprints and duplication rights, call 212-260-1332. Principal office: 158 West 29th St., New York, NY 10001. The Real Deal is published monthly. Annual subscriptions cost $95. Send check or money order to 158 West 29th St., New York, NY 10001.

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EDITOR’S NOTE

THE NASSIMI GROUP REPRESENTING SELECT NEW DEVELOPMENTS

Consider this a warning

egendary New York City newspaper columnist Jimmy Breslin used to put out a year-end list of people who had wronged him. Dubbed “People I’m Not Talking to Next Year,” the list, which ran in the 1960s, included people like “the big shot maitre d’ at the 21 Club” who didn’t let him in, and Pepe, a bar owner who was trying to extort Breslin with an inflated bar tab. Well, I have my own list. Here are all the people that have wronged our editors’ sensibilities this past year or so. You know who you are — all the companies that have thrown good grammatical sense to the wind in their pursuit of hip and clever names. There are seemingly more of them every day. The following should consider themselves warned: Architectural firms like SHoP Architects, FXFOWLE and FLAnk: stop it with the mix of all capital and lowercase letters already. We get it, you’re cutting edge! There is also the city’s BluePRint program — meant to streamline approvals through the Department of City Planning — which just looks like a bureaucratic error. BRGR, TIKL and ROK:BRGR are equally vexing, in the restaurant world. Koffeecake Corner is a minor infraction. (Potbelly and Pounds & Ounces get a pass, but you have to wonder about the wisdom of naming a restaurant to lure customers with references that will make them feel fat.) The Related Companies. Come on, guys — why can’t it just be one company? There is also the real estate event sphere, with the popular and confusingly named RECon conference and smaller companies like Expos Your Business. (My advice: just don’t expose yourself there.) WEmi:t (Where East Meets West), a development firm, would cause any selfrespecting editor to commit hara-kiri. That infraction is much worse than others like

Taking a page from legendary newspaper columnist Jimmy Breslin, I’ve got my own list of those who have wronged me this year — grammatically speaking.

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Harlem Property Re+Development. Condos like +aRt and One57 (for the missing space) are also on the list. On the broker front, there is Gad Realty (E-gad!), CORE, EAR NYC (someone’s initials apparently), plus Brick&Mortar and I&I (again, people, get familiar with the space bar!). Finally, any company that has “Manhattan” or “Citi” or “Urban” in its title is not a violator per se, but new companies should stop putting any of those words in their names because it makes them instantly indistinguishable from 10 other firms. Again, architects are the worst violators. To Christoff:Finio Architecture, please, finito on writing your name like this. Now that I’ve vented on that subject, it’s on to the issue, where there’s a lot to feast on this month. Inside, we feature our ranking of Manhattan’s biggest residential brokerage firms, starting on page 38. This year, our 10th annual survey, seemed to be more hotly contested than most years, which we attribute largely to the inventory crunch. We also survey the top boutique firms, and for the first time, the top mid-sized firms. In addition to measuring who has the most listings, we also take a look at closed sales volume in 2012 to see who finished tops. Being able to match closed sales data with brokerage information is something that just recently became available, thanks to StreetEasy, and this is our inaugural run in presenting it. In a story starting on page 56, we take a neighborhood-by-neighborhood look at the shortage of available apartments in Manhattan — perhaps the defining feature of today’s market and the reason behind prices rising (as well as a factor in the top firms survey). Meanwhile, residential development has long overshadowed commercial building in the city. Very little has been built in terms of new office buildings, but that’s starting to change, particularly in the Hudson Yards area. Check out our story on page 49. Finally, take a look at James Gardner’s review of 432 Park Avenue, which is slated to be the tallest residential building in the city (and the tallest outright, if you don’t include the spire atop One World Trade) when it is completed. Gardner says the Rafael Viñoly– designed condo reminds him of a conceptualist sculpture with its beautiful “freakish thinness.” High praise considering our architectural critic seems to dislike much of what he sees rising in the city — he has a longer list of things that annoy him than even I do. Enjoy the issue, and watch the spelling!

The Corcoran Group is a licensed real estate broker. Owned and operated by NRT LLC.

Stuart Elliott 14 May 2013 www.TheRealDeal.com

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Brokers turn to buyers to boost business

With lack of inventory to sell, agents shift their attention to apartment hunters BY HAYLEY KAPLAN ith a scarce number of sellers in the market, New York City residential brokers have — unintentionally — found themselves taking on substantially more buyers as clients. “Right now I’m working with very, very hungry buyers at the same time I would normally spend handling my listings,” said Frances Katzen, a Douglas Elliman broker, who noted that she’s working with 45 to 50 percent more buyers than she was before the market tightened. “I’ve never had a conscious choice or decision in that. It just depends on the climate.” Kane Manera, also of Elliman, similarly said the number of buyers he’s working with has shot up by about 50 percent in about the last three months. And he noted that his colleagues are generally agreeing to work with more buyers. “Buyers are saying, ‘Oh my goodness, we

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year-over-year to 4,960 units from 7,560, as TRD has previously reported. Meanwhile, the number of sales dropped quarter-over-quarter to 2,457 in the first quarter from 2,598 in 2012’s fourth quarter. Those lucky brokers who do get listings in this market have a big advantage, sources say. “Getting high offers and more buyers in the door is always my goal,” said Christopher Stokes Moseley of Rutenberg Realty. “With these market conditions of little supply and larger demand, it makes for more successful sales for sellers.” However, agents who are used to working only on exclusives have been forced to come up with new strategies for dealing with the unique market conditions. Like other brokers, Stan Ponte of Sotheby’s International Realty told TRD that he is going back to the old-school approach of aggressively working the phones to try to get

“Right now I’m working with very, very hungry buyers at the same time I would normally spend handling my listings.”

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have to get it now.’ Sellers are saying, ‘Oh my goodness, [the market is getting] stronger, why would I want to sell now?’ Those two parallels of strength are causing extremely low inventory and extremely hungry buyers,” Manera said. “There’s a real hint that prices are going to keep going and going and going up.” The extreme lack of inventory in the market (see related story on page 56), has prompted many brokers to shift not just their clientele, but also their strategies for doing business. For starters, it means that competition to score the limited number of for-sale apartments as listings has heightened, largely because those assignments are almost guaranteed sales — as long as they’re viewed as well-priced. But it’s also requiring brokers who are representing buyers to hustle harder than usual. “I had to become very proactive and creative in finding apartments for my customers to see,” said Kevin Ryan-Young, a broker at Bond New York, “whether it’s expanding their criteria or writing letters to owners in a particular building. “Also, keeping the buyers engaged during the extended search process has become a major part of my working time.” According to Elliman’s latest market report for the first quarter of 2013, listing inventory in Manhattan fell by 34.4 percent

new exclusives — rather than waiting to be contacted by new or former clients. “Brokers like myself, who have traditionally represented exclusives, have revved up their seller representation because it’s a seller’s market,” Ponte stated. “My business model has been to push harder on new exclusives and get that business, because it’s not a buyer’s market anymore.” Ponte said he has been reaching out to former clients who purchased properties with him during the boom and explaining to them why selling now would be profitable. Ponte said he has “thankfully” been winning bidding wars on the buyers’ side, but he noted that’s becoming increasingly harder to pull off. Kathy Braddock, the co-founder of Rutenberg Realty, noted that in a market like this one, brokers should figure out “what they’re really good at” and zero in on it. “If someone is really strong [at pitching exclusives, for example] they can play off of that,” she said. “It’s about marketing [yourself ]. It’s not about changing your strength.” But, for many, the shift of working with more buyers has been a challenge. “It’s frustrating,” Katzen said. “[Buyers] feel like we’re holding back [and] we’re not doing our job finding apartments for them, but we can’t make it up. It’s brick and mortar. It’s hard to hide.” TRD www.TheRealDeal.com March 2010

Hedge funds try to turn a profit, one home at a time With other distressed markets played out, big-ticket investors start snapping up homes in Northeast have competed to buy thousands of foreclosed houses in states like California, Nevada and Arizona — where the downturn left thousands of homes available for pennies on the dollar — renting them out to yield handsome returns. The buying frenzy has been so intense that distressed homes in these areas have grown scarce, driving up prices and forcing investors to expand to other markets. As a result, some institutional investors are now looking

By Candace Taylor ver the past year, much ink has been spilled on the phenomenon of institutional investors snapping up distressed single-family homes across the country, a trend that took off last year after famed investor Warren Buffett famously said he’d buy up “a couple hundred thousand” single-family homes if it were practical. Since then, REITs, hedge funds and private equity players

at homes and commercial properties in the New York City area. And industry insiders said they expect that interest to grow as more foreclosed properties become available here. The single-family home-buying trend is “moving east,” said Daren Blomquist, vice president at RealtyTrac, which monitors foreclosures. “We’ll start to see this shift to other markets as these investors run out of good inventory to buy in the Western market.”

He noted that there have been fewer foreclosures in New York than in harder-hit regions, and the foreclosures here have been slower to appear because the state takes longer to process them. But the supply of foreclosures here has increased over the past 10 months, he said, providing more opportunities for investors. A first-quarter market report from RealtyTrac showed that foreclosure starts in New York State increased some 200 percent from

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the same quarter of last year — the highest annual increase in the nation. Of course, investors will need a different strategy in New York, where homes have retained much of their boom-time value, than in hard-hit markets. Rather than focusing primarily on short-term yields, institutional investors buying properties here are more often interested in long-term price appreciation. That can mean distressed single-family homes or other types of real estate; sources said they’ve already seen hedge funds buying commercial properties in the Hamptons. “There are institutional buyers that are buying in New York, and even are buying in [Upper] Manhattan, because they think there is a supply constraint there and that the market is going to go up,” said Ryan Hinricher, a portfolio manager at the residential real estate investment firm Investor Nation, which has worked with institutional buyers purchasing single-family homes. It’s unlikely that the New York area will ever see hundreds of homes being snapped up at once by investors, experts said. Still, “there’s high demand and a lot of money behind these folks, so they’ll be looking for every opportunity they can get to buy properties,” Blomquist said.

An institutional shift Investing in single-family homes is, of course, nothing new. For decades, investors have purchased houses or apartments on the cheap, fixed them up and sold or rented them for a profit. But that market has traditionally been the province of mom-and-pop investors and smaller companies; until recently, deep-pocketed Wall Street players have largely stayed away. “The institutional buyers have always purchased shopping centers, major apartment communities — they’ve never really been in housing,” Hinricher said. But that’s changed in the past two years, Blomquist said, with hedge funds and institutional investors acquiring thousands of distressed single-family houses and leasing them out. Typically, these investments yield annual cash-on-cash returns of 5 to 8 percent, Hinricher said. Continued on page 106

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BY THE NUMBERS

The Lower East Side lowdown Compiled by Evan Bleier

A new ‘path’

Seward — at long last

Old promises fulfilled

A mixed (use) bag

Wedding cakewalk

Schrager goes Downtown

Residential renaissance An illustrative sketch from the city of Broome Street, showing the potential redesign of the Seward Park project.

The Lower East Side is seeing a surge of new development. In March, Extell Development paid nearly $150 million for the site of a now-shuttered Pathmark store at 227 Cherry Street along with the store’s longterm lease. The ﬁrm is expected to build a high-rise residential rental tower on the site. (The Lo-Down)

Bids for the LES’s six-acre, 1.65 million-square-foot Seward Park Mixed-Use Development Project — which will be developed on nine sites located on Delancey and Essex streets — are due this month. The Related Companies, Forest City Ratner, Edward J. Minskoff Equities, AvalonBay Communities and the Gotham Organization are among the big-ticket developers expected to submit proposals. (New York Times)

Seward Park, the largest piece of undeveloped city-owned land south of 96th Street, has been vacant since the city displaced 2,000 residents and bulldozed their homes in 1967, and then failed to develop the site when funding dried up. Later attempts to develop the site, in 1981 and 2003, were unsuccessful. (New York Times)

The city’s Seward Park RFP calls for 500 affordable and 500 market-rate housing units units. The project also calls for about 600,000 square feet of retail and a hotel or ofﬁce space. Plans for a revamped (and bigger) Essex Street Market are also part of the project. (New York Times)

On a smaller scale, the LES is getting a new 12-story, 44,000-squarefoot, 38-unit residential building at 100 Norfolk Street. Brooklynbased developer Urban-Scape purchased the property from Forest City Ratner in 2012 for $8.8 million. ODA Architecture, the project’s architect, said the building’s cantilevered design will rise “over the adjacent low-rise buildings like an inverted wedding cake.”

At the end of last year, investors including Steve Witkoff (pictured) and boutique hotelier Ian Schrager purchased a site at 215 Chrystie Street for $50 million from a group led by landlord Rubin Schron. The new owners plan on building a 25-story tower,, with the first 17 floors devoted to a Public brand hotel and the remaining floors serving as residential space. (WSJ & TRD)

Adding to the LES’s residential stock in recent years has been the construction of a 25-unit condo 50 Orchard Street (2007), the 243-unit rental Ludlow (2008), the 27-unit condo 55 Hester Street (2010) and the 24-unit condo 115 Norfolk Street (2010). Meanwhile, so far in 2013, 54 residential deals have closed at an average price of about $521,000. (StreetEasy)

TraNquiliTy Zephyr Cove, nevada $75,000,000 Referral Agent: eAST SIde mAnhATTAn BRokeRAge Nikki Field | 212.606.7669 | nikkifield.com For more information: SIeRRA SoTheBy’S InTeRnATIonAl ReAlTy COMPILED BY YAFFI SPODEK Jean Merkelbach | 775.901.0704 | jean@dhsir.com This advertisement does not suggest that the broker has a listing or has done a transaction in this property or properties. Sotheby’s International Realty (SIR) advertises this property as a referring agent only, and SIR does so with the consent of the listing broker. SIR will be referring buyers to the seller or local listing broker for the property who will provide information about the property and negotiate any agreements for the purchase of this property. Any information provided by SIR about the property was provided to SIR by the seller or local listing broker and has not been verified by SIR. Buyers should consult with their legal counsel or local real estate professional concerning the property or any resultant transaction.

20 May 2013 www.TheRealDeal.com

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22 May 2013 www.TheRealDeal.com

THE

DESK

OF:

SAMANTHA KLEIER FORBES AND

This tote bag is from Horace Mann, the private school both girls attended from nursery through high school. Now their children are students there, and the family has established a scholarship at the school in the name of their late brother Jonathan.

This photo was taken when the Kleiers were shooting a so-called “sizzle reel” — essentially a pilot — for “Selling New York.” When the producers first approached them in 2008, they were adamantly opposed to participating. They began to consider it when they learned that the production company was a family business like their own.

Samantha is pictured here with her seven-year-old son, Chase, ice-skating in Central Park. Chase may be the next family member to join the business, his mother said: Not only does he know how to use the listings website StreetEasy, he recently told Samantha’s friend to consider apartments in Brooklyn because “prices are lower there.”

This Kleier family photo was taken in front of a green screen for a “Selling New York” shoot. “We felt silly; we aren’t actresses,” Sabrina said.

A promotional poster for “Hot Property,” which ABC Family has begun developing into an hour-long “dramedy.” The show will draw on stories about the Kleiers’ real-life clients, but will rework them as composites. “People always call and say, ‘Oh, is that [character] so and so?’” Samantha said. “But obviously, we never tell.”

This sign was bought in Florida, not far from the Kleier family’s Boca Raton home. The Kleiers now represent One Thousand Ocean, a 52-unit new condo in Boca Raton.

SABRINA KLEIER MORGENSTERN

amantha Kleier Forbes and Sabrina Kleier Morgenstern share more than just their sisterly genes. They also share an offi ce at Kleier Residential, the boutique residential fi rm co-founded by their mother, Michele, as Gumley Haft Residential Management in the 1990s. Today the brokerage is one of the city’s top boutique fi rms (see related story on page 43), and the three Kleier women have sold some $130 million worth of real estate in the past year. These days the Kleiers’ activities extend far beyond brokering deals for high-end and celebrity clients. The trio costars on the HGTV reality show “Selling New York,” and their novel, “Hot Property,” is being made into a TV movie. The sisters’ offi ce space at 415 Madison Avenue, they point out, is perfectly proximate to Bergdorf’s and Bloomingdale’s. B Y G UELDA V OIEN

022 may desk of se FINAL.indd 1

PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN

Samantha and Sabrina’s brother, Jonathan Jonathan, died suddenly in 2009 at age 26 from a heart virus. Before his death, he worked at the company helping with technology and marketing, and shared this office space with his sisters. His desk remains exactly as he left it.

The sisters have matching purple cell phones and both still use oldfashioned day planners. The two agree on most everything — from clothes (they describe their fashion palette as “gum-ball colors”) to men (though both happily married, they are fond of Tom Cruise). “We speak in the royal ‘we,’” explained Sabrina.

A documentary by Jonathan Kleier about swindler Bernie Madoff premiered posthumously at the Tribeca Film Festival in 2011.

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Commercial Ma r k e t

Midtown malaise extends beyond Sixth Avenue Other Midtown corridors are getting hit, but overall Manhattan pre-leasing activity on rise, pros say

By Adam Pincus ffice-leasing brokers have been blaming Midtown’s lackluster activity on Sixth Avenue for some time. Yet it’s now becoming clear that the percentage of available space on several neighboring avenues is higher than it is on Sixth — and it’s rising. At the start of last month, the percent of available Class A office space along Sixth Avenue hit 12 percent. But the availability rate — which measures the amount of office space that’s available or will become available over the next 12 months — was even higher along Madison, Third and Fifth avenues. And Lexington Avenue had the highest rate at a shocking 26.6 percent, according to commercial firm Colliers International. That’s compared to 13.5 percent for overall Class A office space in Midtown.

office space lately and that there’s been an uptick in early-stage negotiations — known as “trading paper”— between tenants and landlords. “All of a sudden there is more activity. We are all scratching our heads,” said Joseph Harbert, president of the Eastern Region for Colliers. “There is paper going back and forth and there’s a little more momentum.”

“The industries in Midtown just aren’t growing,” said Peter Kozel, chief New York economist at Colliers. “It’s not a disaster — just a combination of slower growth and a push [by companies] to slim down.” The lack of growth in Midtown has impacted Manhattan’s overall availability rate and average asking rents. On the whole, Manhattan’s availability rate was 12.2 percent last month, up 0.2 points from March, preliminary data from Colliers showed. The average asking rent for Manhattan was nearly flat, falling by 3 cents to $55.66 per foot. At the same time, insiders say more tenants have been looking at

based than that,” said Kozel, whose firm analyzed available Class A space from 38th to 60th streets in Midtown. There were new deals afoot in Midtown, however. A medical advertising company called Centron signed a more than 27,000-square-foot sublease at 1745 Broadway, the Random House Tower, data from CoStar Group showed. Publishing behemoth Random House — which is consolidating its footprint in the building and sublet the space — was represented by a Cassidy Turley team led by Richard Bernstein, CoStar shows. Centron was represented by CBRE Group’s Gerry

Midtown While Sixth Avenue’s Class A availability rate has been inching up over the past year, it’s not the only area seeing office vacancies. “We realized it’s not just a Sixth Avenue story, it was more broad-

Miovski and Barry Finkelman, a source familiar with the deal said. Meanwhile, Marc Holliday, CEO at Manhattan’s largest office landlord SL Green Realty, said during the firm’s first-quarter earnings call last month that his company was shrinking concession packages. “Concessions were down significantly in the first quarter. [They were] consistent with prior lows we’ve had in other quarters, but [were] certainly down from our average,” said Holliday, whose REIT has reported its largest recent leases in Midtown. “This is attributable, in some respect, to being very prudent on renewal leases and getting [the] best deals possible.” The area’s availability rate ticked

“The industries in Midtown just aren’t growing.” Peter Kozel, Colliers up by 0.1 point in April to 12.7 percent, though the average asking rent was nearly flat, slipping 4 cents to $65.03 per square foot, the Colliers data revealed.

Midtown South A block south of Union Square, in a building that has not had any availability for almost three years, three full floors were listed last month. A search in CoStar shows a steep increase in asking rents in the building at 841 Broadway, since a market low in 2005. A tenant in the building, which is owned by the Feil Organization, paid $30 per square foot that year.

But since then, rents in the building have roughly doubled, CoStar shows. Robert Fisher, Feil’s director of commercial leasing, would not comment on prior leasing rates, but said the asking rent today for the available floors is about $65 per square foot. Last month, the average asking rent in Midtown South was $50.60 per foot, up a penny from March. The market’s availability rate rose by a slight 0.1 point to 9 percent in April, Colliers figures showed. “We are getting mostly tech and new media,” Fisher said. The building’s ability to attract those media and tech companies may be traced back to its proximity to Union Square, as well as the amenities in the building, including the Jivamukti Yoga School and the Jivamuktea Cafe. Both are the kinds of retail selling points tech firms use to attract talent, Fisher said.

Downtown

While deal volume might be slow Downtown, sources say landlords are not responding by cutting rents. Indeed, the average asking rent rose by 28 cents to $45.73 per square foot last month. Instead, they are responding by beefing up contributions. Peter Hennessy, president of the New York tri-state region for Cassidy Turley, is seeing that firsthand. “If a landlord makes changes in a deal structure, it is around concessions, not around rents,” said Hennessy, whose firm is representing about a half-dozen tenants looking

When your “all-cash” buyer has less cash than your kid...

Manhattan office stats AVAILABILITY AVG. ASKING RATE RENT

Manhattan Apr ’13 12.2% $55.66 Mar ’13 12.0% $55.69 Midtown Apr ’13 12.7% $65.03 Mar ’13 12.6% $65.07 Midtown South Apr ’13 9.0% $50.60 Mar ’13 8.9% $50.59 Downtown Apr ’13 15.7% $45.73 Mar ’13 15.3% $45.45 Source: Colliers International

to relocate to space between 20,000 and 40,000 square feet Downtown. But even as the Downtown availability rate increased more than Manhattan’s other two major markets — it jumped by 0.4 points to 15.7 percent — Brookfield Office Properties, the area’s largest landlord, said it has some major deals in the works that could cut that figure significantly. “We continue to advance discussions with a pipeline of office tenants with combined space requirements exceeding 4.5 million square feet,” Dennis Friedrich, the company’s CEO, said during a first-quarter earnings call. If the deals work out, he said he expected them to be finalized by the end of this year or in early 2014. TRD

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24 May 2013 www.TheRealDeal.com

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In their words...

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

“Had [the listings] been legitimate, I would probably never have gotten any calls.” Keller Williams agent Luis Ortiz — the newest cast member on “Million Dollar Listing New York” — on posting bait-and-switch listings when he first started out in real estate.

“The new $50 million is $100 million.” Warburg Realty’s Richard Steinberg, on the rapidly growing prices of ultra-luxury apartments in New York.

“Go to medical school.” Equity International’s Sam Zell, speaking at a REIT symposium, when asked if he had any advice for newbie real estate players.

“I’m very dead set on a 917 or 212, because I’m not one of the new people. [A 212 number shows clients] I’m not sitting in some borough somewhere. They think, and I immediately think, ‘office in Manhattan.’”

“A peacock is supposed to bring good luck … so I knew I had to have one. I mentioned it to someone … and there you go, a vintage peacock.”

Citi Habitats agent Diana Mitchell on the importance of the traditional Manhattan area codes. (Bloomberg News)

“Oh, he takes her all the time — but with me. He wouldn’t know what to do if she was crying or needed a diaper change.” Ivanka Trump, on the Donald as a grandfather. (Redbook magazine) 26 May 2013 www.TheRealDeal.com

026 may funny quotes se FINAL.indd 1

Douglas Elliman broker Jared Seligman, on one of several pieces of taxidermy in his apartment. (The Coveteur website)

“When [a] taxi driver told me years ago he did real estate, I knew the boom was done.” ESPN sports business analyst Darren Rovell. (Twitter)

“It’s very difficult to say, ‘Occupants: 1,000 pairs of Jimmy Choo shoes.’” Douglas Elliman agent Tristan Andrews, on finding a client a rental apartment to use as a closet. (The New York Times)

“Meatpacking: It’s more show than dough.” Newmark Grubb Knight Frank Retail broker Jason Pruger explaining that the Meatpacking District is more of a nightlife destination than a shopping area.

“I thought, screw Madison Square Garden, let’s call Barclays.” Loucas George, producer of ABC’s “Nashville,” on MSG’s request for a fee and creative control in exchange for filming at the arena. (Crain’s)

“Before these enormous buildings went up — the Singer, the Metropolitan Life, the Woolworth — the New York skyline was really religious.” Architectural historian Anthony Robins, referring to a time when the Manhattan skyline was dominated by church spires. (Wall Street Journal)

“Most people don’t wash their rental cars.” Pershing Square Capital CEO William Ackman, on maintenance issues in single-family home rental portfolios. www.TheRealDeal.com August 2006 00

4/30/13 2:28 PM

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Town & Country founder talks about building a brokerage firm in the Hamptons — and making a mean chili ents what they liked. They also came up with the motto, “the power of deep roots.” I think they did a great job. You want to shake things up now and then. 11:00 A.M. On Friday, I met with some clients who are trying

to sell a Montauk home, a cottage with two bedrooms on the water. It’s owned by three siblings, and is an estate sale. It’s listed at $8.5 million and has been shown about 20 times in 5:00 A.M. My eyes open at 5 and I get out of bed at 5:30. I’m

Desiderio has half decaf, half regular coffee because she’s “wired by nature.”

the last two months. But we’re not going to lower the price. Then we went to lunch at Rowdy Hall in East Hampton. I had a croque-monsieur that was slobbered with butter and

a morning person and hit the ground at level 10.

all sorts of stuff. Everybody else had salads, but I let go a bit. 5:45 A.M. I make some French-press coffee: half decaf and

half regular, because I’m wired by nature. I drink three cups.

2:00 P.M. I serve on the board of Fighting Chance, a can-

While the coffee is steeping, I walk outside. I live on a bay in

cer-counseling charity. Our annual gala is on June 1 at the

East Hampton. The other day, I walked to the garden to see

Devon Yacht Club in Amagansett. So, I’ve been shaking the

what the deer didn’t get, but they had eaten part of my rho-

trees to get people to donate things for the silent auction. Elie

dodendrons. They must have been really hungry this year.

Tahari, the designer, is also a landlord. He donated women’s handbags. We get a lot of great things; our firm also gives

6:30 A.M. The guy drops off the papers — the Wall Street

One of Town & Country’s eight Hamptons offices.

money to the cause.

Journal and Newsday — around 6:30. Then I go and work out, from about 6:45 to 7:30. I work out seven days a week in

4:00 P.M. Today, I’m preparing for a meeting with the part-

my basement. If you’re as busy I am, if you don’t set aside time

ners about summer rentals. We’re deciding what to put in

to take care of your vessel, it just won’t get done. I lift weights

the canvas beach bags we leave in the homes for when rent-

twice a week, I do Pilates once, and the other four days I do

ers check in. They’re usually filled with T-shirts and hats and

something aerobic on the bike or treadmill. I have a master’s

beach balls, or wine and gift certificates to a cheese shop. It’s

in exercise physiology, so I practice what I preach.

really chock-full of good stuff. Rentals have been very, very good this year. People are coming out here because they aren’t

7:30 A.M. I make breakfast after I work out. It’s usually a

Desiderio likes to unwind with a Dark ’n’ Stormy.

going to the Jersey Shore or Fire Island, because of damage

shake, with Greek yogurt, vanilla soy milk, and frozen man-

from Sandy. Montauk is on fire. It’s been getting more and

goes and peaches, which I blend with flaxseed. Then I shower

more notoriety; it’s a fun place, and I think people are itching

and dress. I’m out of there by 8 o’clock. But I do fill up a mug

to have fun again.

with hot water and lemon and cayenne pepper, and a squirt of agave, for the commute. It warms you up and keeps you slim.

5:30 P.M. I try to do something social on Friday. Last Friday,

we took a friend out for cocktails at East Hampton Point. I 8:30 A.M. I’m the first to arrive at the office in East Hamp-

like a good Dark ’n’ Stormy. Otherwise, I’m home cooking.

ton [the firm, which was founded in 2005, has eight offices

I make a mean chili. I also make my own pasta, but my hus-

and 140 agents]. I meet with my managers in person every

band, John Tracy, who’s a former New York firefighter, is not

day, or at least talk to them by phone. We always tackle that

into red sauce; I make a lobster sauce for him. My son Drew,

in the morning.

25, who is an agent at our firm, joins us. So does Jack, who’s

10:00 A.M. This winter we had a meeting every Monday

Fashion designer Elie Tahari donates handbags to a charity Desiderio is on the board of.

18 and a lifeguard. We try to have dinner together as a family Monday through Thursday.

morning about our rebranding. We’re still using British racing green, but instead of using it for our background, we

8:30 P.M. Dinner is over by 8:30. I don’t usually watch TV, but

now have a white background. Burkhart Marketing was the

I do catch the 10 o’clock news. But I might also watch “Two

company we used. They interviewed each of our 10 managers

and a Half Men.” My day is so serious that I like a little comic

and some of the agents, and then asked customers and cli-

relief. Bed is between 11 and 11:30. By C.J. Hughes

An easy lunch spot with clients: Rowdy Hall in East Hampton.

28 May 2013 www.TheRealDeal.com

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Rechler’s reckoning T By Adam Piore he names of those who got crushed when the real estate market crashed have been splashed in the headlines for several years: Harry Macklowe, Kent Swig and Lev Leviev, to name a few. But it’s only in recent months that it’s become fully possible to evaluate who’s benefited the most from the fallout and recovery. Somewhere on the top of that list: Scott Rechler. “Everything in our business is luck and timing,” said Richard Baxter, a top investment sales broker at Jones Lang LaSalle. “And he’s had great luck and incredible timing.” In January 2007, Rechler closed on a deal to sell Reckson Associates, the $6 billion real estate investment trust he ran, to SL Green Realty. As part of the deal, Rechler partnered with two pension funds to buy back about 30 percent of the portfolio. And the very next day, he and his team were working at a newly formed private company called RXR Realty. Still, the firm largely stayed out of the trophy office market in Manhattan. Instead, it watched from afar, cultivating relationships, raising money and biding time until the market imploded. Then — when the time was right — the company pounced. In recent months, RXR has been on an acquisition tear that ranks it as among the most aggressive buyers of trophy office towers in the city (see accompanying chart). Last July, the company acquired 450 Lexington Avenue from Istithmar World Capital — months after buying into the building’s capital stack and trying to make itself indispensible by helping Istithmar through arbitration with a tenant and with other matters. In January, it took control over 75 Rockefeller Plaza through a 99-year triple net lease. And in March, it announced plans to buy 237 Park Avenue for about $800 million. Those deals follow investments of more than $3 billion in Manhattan inked between 2010 and 2011, according to Real Capital Analytics. The Park Avenue purchase marked a watershed of sorts for RXR, bringing the value of its assets to over $6 billion for the first time — about the same level Reckson was at in 2007 when Rechler cashed out. And replicating that success as a private company has been no easy feat. “When we were public, I could basically pick up the phone and call an investment bank and sell $200 million in bonds in literally 10 minutes,” said Mi-

30 May 2013 www.TheRealDeal.com

chael Maturo, RXR’s president, chief financial officer and treasurer, who also served as Reckson’s CFO and president. “You can’t do that when you are private. It’s much more time-consuming. Scott and I are pretty much fundraising every day of our lives.” That fundraising has thus far been successful, and Rechler and his team have no plans to stop buying anytime soon. “I imagine we will get bigger,” Rechler

RXR Realty goes on buying binge, aided by a little luck and an aggressive but careful acquisition strategy

VITAL STATS

FIRM: RXR Realty

NUMBER OF EMPLOYEES: 243 HEADQUARTERS: Uniondale, Long Island ASSETS UNDER MANAGEMENT: $6 billion–plus NYC HOLDINGS: 8 buildings (7.5 million sq. ft.) TOTAL PORTFOLIO: 107 properties (19.7 million sq. ft.)

Scott Rechler, the head of RXR Realty, said he’s looking for buildings to buy that are “tarnished gems” so that he can “polish them up” and sell them.

“We have a lot of investment opportunities that we are pursuing right now.… We think this is the time to be active. We believe we are still in the early stages of this market.” Scott Rechler, RXR Realty told The Real Deal during an interview in his Uniondale, Long Island, headquarters. “We have a lot of investment opportunities that we are pursuing right now. We have capital that we have been raising to invest.… We think this is the time to be active. We believe we are still in the early stages of this market.” But buying buildings in the current New York market has not been without

difficulties. With multiple buyers going after properties, the competition is fierce. Still, RXR has often found itself with an edge, according to industry insiders. At 75 Rockefeller, RXR was up against other major investors — at least one of whom bid more, one source said. But RXR still won, in part because it committed to a concrete redevelopment plan, said Arthur Mirante, tri-state president

of Avison Young, who helped represent the building owner, British department store tycoon Mohamed Al Fayed. “It wasn’t just about who was going to pay the most money [for the 99-year deal], it was more about, who did we have the greatest confidence would elevate the building?” Mirante said. “Who did we have the greatest sense of confidence could do the work, and could then lease the building? I can tell you my client was very impressed.” JLL’s Baxter, who worked on the 237 Park deal, attributed RXR’s recent coups to an ability to move quickly. Rechler and his team have a “keen understanding of capital stacks and the ability to fund a substantial non-refundable deposit within hours of being selected as the winning bidder,” he said. “New York City is the most competitive market in the world, and as a buyer, you’re usually one of at least half a dozen who are at the same price level vying to acquire whatever building you are working on,” Baxter said. “You’ve got to act very quickly and decisively.” But RXR’s purchases also involved months of behind-the-scenes planning. And they are part of a deliberate strategy, which traces back, ironically enough, to the frustration Rechler encountered in the heady days of 2006, when Reckson found itself repeatedly outbid for trophy office towers.

The set-up

Rechler, 45, grew up in Port Washington and Roslyn in a prominent Long Island real estate family. His grandfather formed Reckson Associates in 1968 with his sons Donald and Roger (Scott’s father) to build Long Island office buildings. Rechler inherited the family gene for wheeling and dealing. At Clark University in Worcester, Mass., he was elected student body president. His treasurer, Jason Barnett, recalled that the student activities’ budget was facing a shortfall, threatening an array of programs. Rechler suggested that the student council “float a bond.” In a foreshadowing of the hustle that would come to distinguish him in New

www.TheRealDeal.com January 2011 25 PHOTOGRAPH OF RECHLER FOR THE REAL DEAL BY CHRIS MARTIN

Pr o f i l e York real estate, Rechler made a presentation to top university officials that culminated with the school agreeing to advance the funds to close the budget gap. “Even back in school he was into macroeconomics,” Barnett said. “He was getting it done.” After Clark, Rechler went to New York University’s Schack Institute of Real Estate, and then went into the family business. It was the early 1990s and the real estate industry was just coming off a bruising downturn. Reckson, which emerged relatively intact, sensed opportunity: If it could raise enough capital to buy up some of the distressed properties from companies in a 50-mile radius of the city, it could spread its costs out and vastly reduce operating expenses per building. The family, pushed along by Rechler and others, began to explore taking the company public — a plan that would raise a huge war chest and grant them a number of tax advantages. It was around this time that Rechler approached an international law firm called Brown & Wood, which specialized in REITs. Soon he realized he already knew one of the associates — Jason Barnett, his treasurer at Clark. Within months, Barnett jumped ship and joined Rechler. (The two still work side-by-side at RXR.) In 1995, the company went public as Reckson Associates Realty Corp. with a portfolio valued at roughly $300 million, Rechler said. Soon Reckson was snapping up properties in Long Island, Westchester, Connecticut and New Jersey. And in 1997, Rechler, the key architect of the expansion, was named Reckson’s president. The buys included an $83 million Westchester portfolio; a six-building, $77 million complex in Stamford, Conn.; and five New Jersey office buildings for $56 million. The plan was simple: Acquire entire portfolios and their management teams, and then provide a high level of service to tenants. And as a public company, Reckson now had easy access to credit and could always issue more equity or acquire new portfolios by granting equity stakes to the old owners. From the beginning, however, Rechler and his team had their eyes on the prize: New York City. That city opportunity arrived in 1998 in a big way, with a $734 million bid to purchase Tower Realty Trust Incorporated, a REIT. The deal was far larger than any single transaction Reckson had completed up to that point. The portfolio — 65 percent of which was in New York City and about 35 percent of which was in Florida and Arizona — included 100 Wall Street, 819 Seventh Avenue and 120 West 45th Street, along with four older scattered buildings on

75 Rockefeller Plaza, where RXR beat out competitors and scored a triple net lease.

RXR’s senior team, from left to right: Michael Maturo, Todd Rechler, Jason Barnett, Scott Rechler and Richard Conniff.

RXR’s recent purchases Address/Name

Building Size (Sq. Ft.)

Price

601 West 26th St. (Starrett Lehigh)

2.3 million

$920 million

237 Park Ave. (Park Ave. Atrium)

1.3 million

$800.1 million

450 Lexington Ave.

910,473

$667.5 million

620 Sixth Ave. (Bed, Bath & Beyond)

670,000

$500 million

1166 Sixth Ave.

556,000

$500 million

1330 Sixth Ave.

535,600

$400 million

340 Madison Ave.

750,000

$279.3 million

75 Rockefeller Plaza

578,241

$250 million

450 Lexington Avenue, which RXR bought for $667.5 million last year.

Source: Data from Real Capital Analytics and news sources. Price at 340 Madison Avenue reflects the 49 percent stake RXR owns. At 75 Rockefeller, the company committed $250 million plus an additional $250 million to renovate the building.

Broad Street and Madison Avenue that Rechler flipped to SL Green. The Tower Realty deal took months, and was complicated by a number of factors — including the loss of a major equity partner, the Russian debt crisis and a major renegotiation, replete with screaming, threats and New York City–style bravado. Yet it marked a turning point for the suburban-based REIT. After it closed in 1999, Rechler assumed the title of coCEO, which he shared with his uncle, Donald. Within months of closing on its purchase of Tower, the company bought 919 Third Avenue and shelled out $126.5 million for 1350 Avenue of the Americas — which involved hammering out an agreement with 50 members of the Minskoff family. As the expansion continued, however, the interests of the family began to diverge. While Rechler and his increasingly tight team argued for a continued expansion into New York City and a focus on office properties, other family members — including Scott’s brother, Gregory,

RECHLER GROUP PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN 28 March 2012 www.TheRealDeal.com

and cousin, Mitchell — were looking to return to the simpler days as a private developer. In 2003, with the value of Reckson having risen to $3 billion, Rechler and his family decided to part ways and divvy up the spoils — with Gregory, Mitchell, Roger and Donald launching a new company called Rechler Equity Partners and Rechler and his team taking over at Reckson. Rechler handed over 95 industrial properties totaling 5.9 million square feet in exchange for $315 million from his family. He then reinvested the funds in the $321 million purchase of 1185 Avenue of the Americas. The move worked out financially for Rechler. Between 2003 and 2006, under his leadership, Reckson was one of the most active firms in New York. By 2006, it had about $6 billion in assets, 70 percent of which were in the city. In total, over the course of Reckson’s tenure as a public company, Maturo estimated the company acquired about $4 billion in assets and sold $2.5 billion. “We’re not empire builders,” he said. “Our philosophy is buy, create value and

The Starrett-Lehigh Building, which RXR paid $920 million for in a 2011 megadeal.

237 Park Avenue, which RXR agreed to buy for about $800 million.

then sell to realize the value.” It was a strategy that set the firm up perfectly for what came next.

Losing out As the real estate market became red-hot in 2006, Maturo, Rechler and the rest of their team saw it becoming harder to win deals. That spring, they bid on 1211 Avenue of the Americas, the 1.9 million-squarefoot office tower known as the News Corp. Building. Reckson had signed up a German Continued on page 114

www.TheRealDeal.com May 2013 31

REGULATING REAL ESTATE

Signs of a boom market reappear

With inventory down across the country, buyers offer “naked” bids and escalation clauses By Kenneth Harney hey’re back after barely a decade: Escalation clauses in real estate contracts, “naked” contingency-free offers and lowball-priced listings designed to pull in dozens of bidders and turn routine sales transactions into auctions. These are all techniques last seen with frequency during the frothiest months of the housing bubble, when prices were rising at double-digit rates, buyers thought they couldn’t lose money in real estate, and mortgage financing was available to anybody who could sign a loan application. Now they are reappearing in some of the hottest sellers’ markets from coast to coast — the byproduct of severe shortages in houses listed for sale combined with strong de-

of Florida, among others. In a handful of fiercely competitive areas, some listing agents reportedly are even restricting buyers’ access to properties to narrow time windows — say, a few hours on Saturday and Sunday — in order to fan the flames. To get a leg up in such situations, some buyers and their agents are using techniques that can be effective, but that also come with drawbacks and snares. Among them:

Contingency-free and contingency-light offers Carl Medford, an agent with Prudential California Realty in the San Francisco East Bay market, said these are almost routine for buyers determined to win a bidding competition. He calls them

with roots and a chimney cracked so badly that it was condemned.

Escalation clauses These are add-ons to contract language that keep bidders in the competition, even when the price soars well beyond the original asking amount. Typically the bidder agrees to match and exceed any verifiable, bona fide competing offers by set increments — say, $500 to $1,000 — up to some maximum amount. Tom Conner, an associate broker with RE/MAX Gateway in Gainesville, Va., said, “We’re seeing them all the time now” in multiple-offer situations. The upside: Properly used, they work. Bidders with the highest maximums often get the property. Downside: For buyers who need a mortgage, the ap-

Nationwide, according to surveys of 800-plus local markets by Realtor.com, inventories are down by 16 percent from year-ago levels. mand by qualified purchasers. Nationwide, according to surveys of 800-plus local markets by Realtor.com, inventories are down by 16 percent from year-ago levels. But in the hottest areas, listings are down by double or even triple that and prices are moving up fast. Buyers, meanwhile, are out in droves, scanning newspapers and online realty sites for the latest listings, and signing up for alert services provided by realty firms. In the San Francisco Bay area, for example, agents say that realistically priced new listings are attracting dozens — sometimes even hundreds — of shoppers to open houses and stimulating bidding competitions with 30 to 50 or more participants. Bidding wars are also increasingly frequent on well-priced listings in New York City, Washington, D.C., and its Maryland and Virginia suburbs, much of California, Seattle, Phoenix, Las Vegas, Richmond, Va., Boston and parts

“unprotected” contract offers. Essentially the idea is to strip away some or all of the customary contingencies in an offer that might irritate a seller or render the buyer’s bid less attractive. The financing contingency, which makes the entire transaction dependent on the buyer obtaining a satisfactory loan and appraisal, often is the first to go if the bidder is confident of qualifying for a mortgage, has been preapproved or is willing to pay what could be a lot more than market value. Many buyers are also willing to delete the inspection contingency, which Medford considers much more risky, since the bidder agrees to fly blind with no way out of the deal if costly defects — tens of thousands of dollars’ worth, potentially — later arise. Tracy King of Teles Properties in northeast Los Angeles said she knows of buyers who have waived the inspection contingency and later discovered sewer lines clogged

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praisal could be a problem because it’s likely to come in lower than the purchase price. They should be prepared to throw extra cash into the deal upfront.

Lowball listings Rather than list a house at the price that comparable recent sales in the area indicate it’s worth — say $495,000 — the sellers, advised by their agent, cut that to $479,000, hoping to stimulate a bidding war. Astute shoppers immediately spot the house as a “bargain,” and multiple competing offers push the final price to $520,000. Good for the sellers, right? Probably. They get top dollar. But the ultimate buyers end up committed to a contract requiring them to pay what may be $25,000 over the likely current appraisal value — and that could have negative consequences for both the buyer and the seller. Kenneth Harney is a syndicated columnist.

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GOVERNMENT BRIEFS Revamped Pier A set to open in 2014 After years of delays and cost overruns, plans were unveiled last month for an overhaul of a long-vacant historic structure at Pier A in Lower Manhattan, DNAInfo reported. The landmarked, three-story building first opened in 1886 as the headquarters for the New York Harbor Police and Department of Docks. After completA rendering of the new Pier A ing repairs to the building’s shell and core by June, the Battery Park City Authority said it will turn the building over to a group of developers including the Poulakakos family, who will spend $18 million to create an oyster bar, upscale 100-seat restaurant, catering hall and tourist-information center at the site. The developers also unveiled renderings for a pedestrian plaza surrounding the building. Danny McDonald, a Poulakakos partner, said the complex is slated to open by May 2014.

Architecture firms reimagine Penn Station The nonprofit Municipal Art Society of New York has asked four high-profile design firms to come up with new designs for Penn Station and Madison Square Garden, the New York Times reported. Designs created by the firms — Santiago Calatrava, Diller Scofidio + Renfro, SHoP Architects and Skidmore, Owings & Merrill — will be unveiled to the public May Madison Square Garden 29. “We’re really trying to unlock people’s imaginations about the very real potential of a new arena and of a new Penn Station,” Vin Cipolla, the society’s president, told the Times. With Madison Square Garden’s 50-year special permit expired, the arena’s owners in December filed an application to continue to operate an arena on the site in perpetuity. That request is now going through the city’s land-use review process, with a final decision by the City Council expected this summer. But Manhattan Borough President Scott Stringer and others have recommended that the permit be restricted to a 10-year term.

Federal regulators take heat for botched foreclosure review Private consultants and federal regulators are facing criticism for creating red tape that delayed relief to homeowners in foreclosure, the New York Times reported. Regulators from the Federal Reserve and the Office of the Comptroller of the Currency designed a flawed review of troubled loans, which private consultants then carried out, according to a new Government Accountability Office report. Consultants, who were ordered by regulators to scrutinize whether homeowners had been wrongfully evicted, ran up more than $2 billion in fees despite reviewing only a small number of foreclosed loans, the report said.

HPD issues RFP for Bronx site The city’s Department of Housing Preservation and Development has issued a request for proposals for one of the largest remaining development sites in the Bronx, Crain’s reported. The 185,000-squarefoot site, composed of two parcels near the Hub shopping district in Melrose, is zoned for more than 1 million square feet of development. Submissions, which must include affordable housing, are due July 3. The Hub The city at one point owned more than 46 acres of land in the Bronx, after taking over abandoned properties in the 1970s and 1980s. Since then, many of those properties have been developed. The Melrose site includes “some of the last large city-owned lots in the South Bronx,” city Department of Housing Preservation and Development Commissioner Mathew Wambua said in a statement. Compiled by Sanna Chu

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A blowup worth billions

Following a cutthroat “beauty contest” BY LEIGH KAMPING-CARDER n the years since the financial crisis, a — in which every broker who was anyone bookcase full of writers have taken a pitched MetLife to become the complex’s crack at telling the story of the boom exclusive sales agent — MetLife hired and bust — each one turning a cast of Darcy Stacom of CBRE Group to market bankers, analysts and government officials the sprawling property. “Stacom, bidders said, was very effective into their own heroes, villains and Cassandras. at leaving each bidder with the impression In “Other People’s Money: Inside the that she was telling them, and them alone, Housing Crisis and the Demise of the some vital piece of information that would Greatest Real Estate Deal Ever Made,” au- help them gauge the unfolding battle,” Bagli thor Charles Bagli examines writes. the collapse through the lens Bagli studs his account of a single transaction: the with these behind-the-scenes much-ballyhooed acquidetails. For example, Eastdil sition and subsequent loss Secured’s Doug Harmon is “a street dragster of a real estate of Manhattan’s Stuyvesant Town–Peter Cooper Village. executive.” Richard LeFrak, At the height of the marwho considered a bid, scoped ket, developer Tishman out Stuy Town’s boilers. Rob Speyer and the asset manSpeyer, the co-CEO of Tishager BlackRock paid an unman Speyer, looks dapper in a precedented $5.4 billion suit and has a “machine-gun for the 80-acre residential laugh.” rental complex — the largAs it turned out, Speyer won the bidding war, topest real estate deal in U.S. hisping his nearest rival — a tory. A mere three years latpartnership of Apollo Real er, they turned the property over to lenders, losing hunEstate Advisors (now known dreds of millions of dollars as AREA Property Partners), for their investors. ING Clarion and the Dermot But in this nuanced and Company — by $70 million. exhaustive retelling, pubTo fund the deal, Tishlished last month, Bagli man Speyer and BlackRock took on a $3 billion makes the case that the failed deal wasn’t merely a victim interest-only mortgage plus Top: “Other People’s Money” of the downturn, but was an another $1.4 billion in loans; was published last month. over-leveraged gamble based Bottom: author Charles Bagli. they drummed up an addion flawed financial forecasts. tional nearly $2 billion from “The catastrophic failure was not simply pension funds, foreign governments and a matter of bad timing,” Bagli writes. “The other sources. The final cost of the deal was $6.3 bilreality is that nearly every single assumption in their business plan for Stuyvesant lion, but Tishman Speyer invested only $56 Town–Peter Cooper Village was wrong, million of its own money. The developer’s profit-making strategy dead wrong.” While “Other People’s Money” isn’t ex- involved a plan to aggressively raise rents actly a page-turner, it offers a compelling — both by deregulating the 72 percent of look at how, during the boom, a Wall Street the complex’s units that were rent stabimentality seized even the unsexy world of lized, and by renovating apartments and affordable housing. Investors took on the introducing building amenities to woo a same kind of risk acquiring rent-stabilized younger, more affluent clientele. apartments as they did buying into esoteric In short, Speyer wanted to turn this “urfinancial instruments. ban version of Levittown” into a “yuppie As a reporter with the New York Times, haven,” Bagli writes. But from the start, the projections were Bagli has been covering Stuy Town since its former owner, the insurance giant MetLife, wildly optimistic. When the deal closed, the put the 11,000-unit complex on the market complex’s annual rental income didn’t even in 2006. MetLife built Stuy Town in the cover the cost of debt service. And tenants late 1940s, urged on by Mayor Fiorello La distrusted Tishman Speyer, the only bidder Guardia, who provided the company with that did not meet with their representatives free city land and a 25-year tax abatement. before submitting an offer. “It got to the point where anything that When the company went public in 2000, however, it began selling off many Tishman Speyer did at Stuyvesant Town of its real estate holdings. Continued on page 112 www.TheRealDeal.com March 2010

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Top residential firms 2013

Big firms tackle big obstacles As inventory shortage continues, Manhattan’s largest brokerages work to nab new condos, high-end properties by just 15.4 percent, giving a slight advantage to those firms with super high-end listings. The firm with the highest number of listings per agent was luxury brokerage Brown Harris Stevens, which had 0.79 listings per agent in 2013, down from 1.5 listings per agent last year.

Farming in the desert Despite the listings crunch, some top CEOs told TRD that closed sales volume has not suffered substantially, thanks to high levels of demand from buyers starved for product (see related story on page 44). “Our volume right now is ahead of last year in most of our markets,” Liebman said. “I’m a little surprised by that myself, because of the inventory crisis. If you put a quality property on the market and it’s priced well, it’s going to sell immediately in this market.” Indeed, the absorption rate for apartments in Manhattan — the number of months it would take to sell all single-family properties currently on the market — dropped by 37.8

percent year-over-year, according to Miller Samuel’s report. On average, apartments spent approximately 132 days on the market in the first quarter, 13.2 percent fewer than during the same period of last year. Still, buyers are antsy, Liebman said. “We capture our fair share of listings, but the market is so robust right now that it feels unsatisfying to a lot of buyers,” she said. “When they do find something they like, they’re being forced into a bidding war. They want to see more and we have nothing to show them.” To find homeowners interested in selling, Ramirez said she’s been encouraging all of her agents to “go into their databases, [and] reach out to customers who’ve been in their homes for a while.” In the face of the listing shortage, the firms that have held up the best are those that have excelled in the luxury market and taken advantage of the new development projects hitting the market.

“Our [sales] volume right now is ahead of last year in most of our markets. I’m a little surprised by that myself, because of the inventory crisis. If you put a quality property on the market and it’s priced well, it’s going to sell immediately in this market.” Pamela Liebman, the Corcoran Group

The heads of Manhattan’s biggest firms, respectively: Elliman’s Dottie Herman, Corcoran’s Pam Liebman and Halstead’s Diane Ramirez.

By Katherine Clarke gainst the backdrop of Manhattan’s severe inventory shortage, the borough’s largest firms are working to leverage a new crop of condos and high prices in the luxury sector. Nearly all of Manhattan’s 12 largest firms have far fewer exclusive listings than they did at this time last year, according to The Real Deal’s annual ranking of the borough’s top residential firms, which reviewed a snapshot of data pulled from Online Residential in mid-March. At nearly all of the companies included in the ranking, the average number of listings per agent dropped year-over-year, according to TRD’s research, while the number of agents with zero listings rose at most all firms too. Overall, the top 12 firms had a total of $8.42 billion in exclusive Manhattan sales listings, down 38.4 percent from $13.36 billion last year. That trend stands in con-

38 May 2013 www.TheRealDeal.com

trast to 2012’s rankings, when listings volume remained relatively steady from the previous year, while the dollar value grew by more than 10 percent. Halstead Property President Diane Ramirez said that a decline in listings value was inevitable for nearly all firms in the current climate (see related story on page 56). “The listings just haven’t come on,” she said. “If there aren’t listings to get, your numbers are going to drop.” Indeed, Manhattan’s two largest firms, Douglas Elliman and the Corcoran Group, saw the number of their exclusive listings shrink substantially. Though Corcoran CEO Pamela Liebman disputed TRD’s numbers regarding her firm’s listings, she agreed that the citywide inventory shortage is “an across-theboard problem.” In the first quarter of 2013, Manhattan inventory fell 34.4 percent from the same period of last year, according to an Elliman market report prepared by appraisal firm Miller Samuel. On the luxury end of the market, inventory fell

Number of Manhattan agents Rank

May 2012 2012 Firm 2013

2013

% 2012 Change

Douglas Elliman

1,599

1,516

The Corcoran Group

1,091

1,131

-4%

Halstead Property

617

600

Citi Habitats

607

627

-3%

Bellmarc/AC Lawrence*

511

242

111%

Rutenberg Realty

478

468

Bond New York

451

515

-12%

Brown Harris Stevens

447

434

Town Residential

388

268

45%

Nest Seekers International

260

277

-6%

Sotheby’s International Realty 248

198

25%

Stribling & Associates

213

15%

244

ILLUSTRATION FOR THE REAL DEAL BY WARREN GEBERT www.TheRealDeal.com May 2013 39

Top residential firms 2013

Sotheby’s agents Serena Boardman, Elizabeth Sample and Brenda Powers are shopping around a penthouse at the Pierre at 795 Fifth Avenue for $125 million. The record listing hit the market last month.

ed in OLR. The two brokerages said they’ve had problems with their data being transferred into OLR. ) Of the top 12 firms, it appears that Brown Harris Stevens, Corcoran and Halstead have most efficiently reaped Left, Neil Binder, who co-founded the brokerage Bellmarc in 1979; right, Rutenberg co-founder Kathy Braddock. the rewards of high pricElliman and Corcoran were the only es in the luxury market, with Elliman and Sofirms this year with more than $2 billion theby’s close behind. in exclusive listings. According to TRD’s While all those firms saw decreases in their research, the firms saw their number of overall dollar volume of listings, Brown Harris listings drop by 34 percent and 45 percent, Stevens had 40 agents with listings priced at respectively — around the same percent- $10 million or above, up 54 percent from 26 age that inventory fell marketwide. last year, according to TRD’s research. CorcorMeanwhile, their total dollar volume an and Halstead also saw large jumps of 46 of listings sank by 30 percent and 40 per- percent and 83 percent, respectively. cent, respectively. (Both firms disputed Among Brown Harris Stevens’ priciest listthe findings, claiming they each had sev- ings is the Ellen Biddle Shipman residence, a eral hundred listings that were not list- century-old townhouse at 21 Beekman Place,

which broker Paula Del Nunzio is listing for $43 million. And Brown Harris brokers John Burger and Nancy Elias have a $26 million, eighth-floor spread on the market at 640 Park Avenue. (Brown Harris Stevens President Hall Willkie declined to comment on the rankings.) And in a prime example of the current high-flying luxury market, Sotheby’s agents Serena Boardman, Elizabeth Sample and Brenda Powers are listing a penthouse at the Pierre at 795 Fifth Avenue for $125 million. Liebman told TRD that Corcoran has been actively looking to increase its share of the luxury market in the past several years. And it seems to be succeeding in that regard. According to TRD’s data, Corcoran saw the median price of its listings jump 18 percent from last year. In the past two years, Liebman claimed, Corcoran has been involved in nearly half of all deals above $20 million citywide. And be-

A penthouse at 497 Greenwich Street in Soho, listed with Elliman for $14 million.

Total Manhattan listings Rank

tween 2011 and 2012, she added, Corcoran saw a 28 percent increase in sales over $20 million. “As the luxury market has increased, our share has grown as well,” she said. “Our percentage of that market is really high.” Another boon for Corcoran recently has been its focus on new development, thanks to a slew of pricey new Manhattan projects. Tribeca’s 56 Leonard Street, for example, is being marketed by the firm’s new development marketing arm, Corcoran Sunshine. Indeed, prices for Manhattan new-construction condos have reached new peaks in recent months. The average price per square foot for a new Manhattan condo in the first quarter was $1,332, according to Miller Samuel, up from $1,263 in the same period of last year. By comparison, the average

Total $ volume, Manhattan listings % 2012 Change

Rank

(in millions) Firm

2013

% 2012 Change

Douglas Elliman

$2,220

$3,192

-30%

The Corcoran Group

$2,085

$3,502

-40%

-38%

Brown Harris Stevens

$1,283

$2,659

-52%

651

-46%

Sotheby’s International Realty $1,009

$1,468

-31%

183

261

-30%

Halstead Property

$652

$845

-23%

Town Residential

136

174

-22%

Stribling & Associates

$384

$584

-34%

Stribling & Associates

122

197

-38%

Town Residential

$327

$502

-35%

Citi Habitats

118

140

-16%

Nest Seekers International

$162

$252

-35%

Bellmarc/AC Lawrence*

115

150

-23%

Rutenberg Realty

$94

$84

12%

Rutenberg Realty

Bellmarc Realty

$90

$134

-32%

Nest Seekers International

-9%

Citi Habitats

$76

$108

-30%

Bond New York

-24%

Bond New York

$31

$27

15%

2013 2012 Firm

2013

Douglas Elliman

993

1,494

-34%

The Corcoran Group

836

1,508

-45%

Halstead Property

440

708

Brown Harris Stevens

353

Sotheby’s International Realty

00 April 2007 www.TheRealDeal.com PHOTOGRAPH OF BRADDOCK FOR THE REAL DEAL BY MICHAEL TOOLAN

2013 2012

www.TheRealDeal.com May 2013 39

TOP RESIDENTIAL FIRMS 2013 price during the first quarter of 2007 was $1,132 per square foot. Elliman, too, benefited from its new development division, according to Elliman CEO Dottie Herman. Douglas Elliman Development Marketing is now handling 91-unit new condo 150 Charles Street, and the 33-unit Sterling Mason condo at 71 Laight Street in Tribeca. Elliman saw a 10 percent increase in its median listing price, which Herman attributed in part to “new developments offering more inventory in [a higher] price range.” Elliman’s new development division, led by Related Companies alum Susan de França, added to its ranks this year. Broker Horacio LeDon — also a former Related executive — joined the team in February. And just last month, Town Residential’s new development head, Reid Price, decamped for Elliman. Town, which is set to launch sales at the 29-unit Charles condo at 1355 First Avenue in the coming weeks, had not yet replaced Price by press time.

A co-op at 3 Gramercy Park West listed with Stribling for $6 million.

Armies of salespeople When it comes to the number of agents, Elliman and Corcoran remain the two largest firms in the city. Elliman has 1,599 Manhattan agents, according to TRD’s data, which was tallied from firm websites. That was up from last year’s total of 1,516. Corcoran’s total, however, fell slightly to 1,091 from 1,131 last year. While most of the top firms remained relatively steady in terms of agent numbers, a few saw dramatic growth. Among them was the two-year-old brokerage Town, launched by Citi Habitats founder

Stribling President Elizabeth Ann Kivlan, with her mother, firm founder Elizabeth Stribling.

A Citi Habitats listing at 10 West End Avenue.

Average listings per Manhattan agent Rank 2013 2012

Firm

2013

Median listing price for Manhattan properties

% 2012 Change

Median (in thousands)

Rank 2013 2012

2013

Firm

% 2012 Change

Brown Harris Stevens

0.79

1.50

-47%

Sotheby’s International Realty $2,697

$2,498

2 (tie)

The Corcoran Group

0.77

1.33

-42%

Brown Harris Stevens

$1,700

$1,735

-2%

2 (tie)

Sotheby’s International Realty

0.77

1.32

-42%

Stribling & Associates

$1,547

$1,800

-14%

Halstead Property

0.71

1.18

-40%

The Corcoran Group

$1,295

$1,095

18%

Douglas Elliman

0.62

0.99

-37%

Douglas Elliman

$1,100

$999

10%

Stribling & Associates

0.50

0.92

-46%

Town Residential

$1,047

$1,185

-12%

Town Residential

0.35

0.65

-46%

Nest Seekers International

$799

$981

-19%

Nest Seekers International

0.27

0.28

-4%

Halstead Property

$725

$699

Bellmarc/AC Lawrence*

0.23

0.62

-63%

Rutenberg Realty

$699

$725

-4%

Citi Habitats

0.19

0.22

-14%

Bond New York

$502

$487

Rutenberg Realty

0.18

0.17

Citi Habitats

$499

$582

-14%

Bond New York

0.07

0.08

-13%

Bellmarc/AC Lawrence*

$474

$575

-18%

40 May 2013 www.TheRealDeal.com

www.TheRealDeal.com 39 PHOTOGRAPH OF STRIBLINGS FOR THE REAL DEAL BYMay MAX 2013 DWORKIN

Top residential firms 2013

Town Residential’s Patty LaRocco has the exclusive on this townhouse at 81 Hanson Place in Fort Greene.

Andrew Heiberger, which added more than 100 agents to its roster, growing by 45 percent year-over-year. Town opened two new offices this year: The firm’s seventh location opened at 337 Broadway in Soho in January, while its eighth outpost, a 65-agent office in Greenwich Village, launched last month. In a statement to TRD, Heiberger said the offices are “part of a carefully planned rollout,” which goes along with Town’s goal of becoming “best-in-class in the industry.” The Bellmarc Group also shot up in agent numbers this year, thanks to its late 2012 merger with residential and commercial brokerage AC Lawrence Real Estate. As a result of the consolidation, the two firms were considered a joint entity in TRD’s ranking with a combined 511 agents, making Bellmarc

Elliman agents Leonard Steinberg and Herve Senequier are listing a unit at 40 Bond Street for $27 million.

Manhattan agents with a $10M listing or higher Rank 2013 2012

Manhattan’s fifth-largest firm. ing veteran brokers Lisa Maysonet and Co-founded in 1979 by Neil Binder, Bell- Gary Kabol, both of whom had been with marc was Manhattan’s 10th-largest firm be- Elliman for more than 20 years. fore absorbing AC Lawrence. Stribling, meanwhile, grew 15 perSotheby’s and Stribling & Associates were Continued on page 110 the only other firms to add a significant number of agents over the last year. Sotheby’s saw its ranks grow 25 percent to 248 agents, up from 198 last year. (Sotheby’s declined to comment for this piece.) However, the firm made some Left, Hall Willkie, president of Brown Harris Stevens. Right, Citi Habitats high-profile hires, includ- President Gary Malin.

Firm

2013

2012

% Change

Manhattan agents with no active residential listings Rank 2013 2012

Firm

2013

% 2012 Change

2 (tie)

Brown Harris Stevens

54%

Bond New York

94.7%

94.6%

0.08%

2 (tie)

The Corcoran Group

46%

Rutenberg Realty

89.5%

87.2%

2.70%

Douglas Elliman

23%

Citi Habitats

88.5%

86.4%

2.40%

Sotheby’s International Realty

29%

Nest Seekers International

88.1%

90.3%

-2.50%

Halstead Property

83%

Bellmarc/AC Lawrence*

86.7%

68.6% 26.40%

Town Residential

-20%

Town Residential

80.2%

69%

16.20%

Stribling & Associates

-29%

Douglas Elliman

72.8%

62.9%

15.70%

8 (tie)

Nest Seekers International

-75%

Halstead Property

68.4%

57.2%

19.60%

8 (tie)

9 (tie)

Rutenberg Realty

The Corcoran Group

68.3%

54.1%

26.20%

10 (tie)

9 (tie)

Bond New York

Stribling & Associates

66%

57.7%

14.40%

10 (tie)

9 (tie)

Bellmarc/AC Lawrence*

Sotheby’s International Realty 65.7%

49%

34.10%

10 (tie)

9 (tie)

Citi Habitats

---

Brown Harris Stevens

49.8%

27.60%

63.5%

Notes: All data was gathered from the OLR listing portal in mid-March, with the exception of the number of agents, which was gathered from the brokerage websites. Data includes only Manhattan-based brokerages and agents, and only active Manhattan residential sales listings that had been updated within the last 90 days at the time of the survey. Data does not include multi-family properties, listings that are in contract or listings that have pending offers. Percent changes are based on figures before rounding. Corcoran Sunshine agents and listings were included in Corcoran’s total agent and listing count. Primary rankings are based on number of Manhattan agents; firms on that list are then ranked by other factors. *Bellmarc and AC Lawrence are counted jointly in light of their late 2012 merger.

00 April 2007 www.TheRealDeal.com

www.TheRealDeal.com May 2013 41

Top residential firms 2013

Cornering the middle

TRD’s first-ever ranking of mid-size firms finds in-betweeners looking to grow their ranks and open new offices

Top Manhattan mid-size firms RANK

FIRM

TOTAL $ VALUE, ACTIVE MANHATTAN LISTINGS

NO. OF ACTIVE MANHATTAN LISTINGS

NO. OF MANHATTAN AGENTS

CORE

$344.0 million

Warburg Realty

$188.1 million

126

Keller Williams NYC

$186.5 million

240

Blu Realty

$80.5 million

Fenwick Keats

$44.2 million

MNS

$27.4 million

DJK Residential

$13.9 million

City Connections

$13.1 million

118

Level Group

$11.8 million

155

Source note: Data was gathered from OLR in mid-March, except for the number of Manhattan agents, which was gathered from brokerage websites. Rankings include Manhattan-based brokerages and agents, and active Manhattan residential listings updated within 90 days. Multifamily properties and listings in contract or that have pending offers, excluded. Firms with 50+ agents who didn’t make the biggest firms list were eligible.

By Hayley Kaplan all them the in-betweeners. They’re too small for the top firms list and too big for the boutiques. They’re New York City’s mid-size residential firms. And for the first time this year, The Real Deal compiled a list ranking these firms by dollar volume of listings. The firms — which this year had between 50 and roughly 240 agents — have recovered from the difficult market of the last few years and are now looking to grow, either by opening new offices and renovating old ones, hiring more brokers or expanding their core businesses. “The market just has been steadily improving since the bottom in 2009, and we’ve all benefitted from that,” said Frederick Peters, president of the 126-agent firm Warburg Realty, which logged in at No. 2 on TRD’s ranking with $188.1 million worth of exclusive listings. (TRD’s data was collected from listings provider Online Residential in mid-March.) Nabbing the No. 1 slot was the 55-agent brokerage CORE — which took the top spot on last year’s boutique list. This year, the company had 70 exclusive listings worth some $344 million. Rounding out the top three was relative newcomer Keller Williams NYC, which had 68 listings worth $186.5 million. Collectively, the top nine mid-size firms had 319 Manhattan residential listings worth a total of $909.5 million.

42 May 2013 www.TheRealDeal.com

Blu Realty founders, from left: David Tobon, Moshe Balalo, Alon Chadad, Michael Arcos and Andy Kim.

Left, Eric Barron, CEO of Keller Williams NYC; right, Shaun Osher, CEO of CORE.

“I’ve made a decision about the size that I wanted to maintain for the firm because I want to make sure our broker-to-manager ratio is always small enough so agents can always get the training and support and feedback that they need.” Frederick Peters, Warburg Realty

Making moves CORE saw a substantial uptick this year — 41 percent — in the dollar value of its listings. (TRD’s ranking last year found that it had listings valued at a total of $244.7 million.) Much of that boost is due to one super-pricey listing: a five-bedroom property at 15 Central Park West, listed for $85 million with CORE’s Emily Beare. CEO Shaun Osher said the firm has recently started representing several new developments, including the 92-unit 93 Worth Street in Tribeca. The company also opened its first Uptown location on the Upper East Side last month, bringing its total number of offices to three. “We’re definitively growing our brand,” Osher said. In terms of number of agents, however, he said he’s not looking to drastically increase the size of the firm. Osher said the firm will “continue to grow organically,” but noted that he’s very picky about the agents he hires. “Per agent, we’re very efficient,” he said. “We don’t have agents who don’t do business.” Warburg is also making moves. In March of this year, the firm moved from its longtime headquarters at 969 Madison Avenue into swanky new headquarters at 654 Madison. Peters explained that it wasn’t until 2012 that Warburg even considered the upgrade. “We needed more space,” Peters said. “It just seemed logical to look into an office building with a more central location; 2008 and 2009, the market had gone into the tank so it was hard to think about making a change like that and spending a whole bunch of money.” “I love it. I am so excited about this place,” Peters added. “This move is clearly the most significant thing we’ve done” in the past year. Next, Peters said he plans to renovate the firm’s other two offices to make them as “state of the art” as the Madison Avenue office. That’s a significant change from the downturn. In 2009, Warburg shuttered two of its offices — at 2235 Frederick Douglass Boulevard in Harlem and at 65 West 13th Street. But when it comes to number of agents, Peters said he has no plans to grow WarContinued on page 108

www.TheRealDeal.com 2013CHANG 65 PHOTOGRAPH OF OSHER FOR THE REALJanuary DEAL BY JAMES

TOP RESIDENTIAL FIRMS 2013

Boutiques battle for listings With luxury-listing prices off the charts, high-end firms shine Top Manhattan boutique firms RANK

FIRM

2013

2012

TOTAL $ VALUE, ACTIVE MANHATTAN RESIDENTIAL LISTINGS

NO. OF ACTIVE MANHATTAN RESIDENTIAL LISTINGS

NO. OF MANHATTAN AGENTS

2013

2012

2013

2012

2013

2012

Leslie J. Garfield

$93.8 million

$182.4 million

The Modlin Group

$84.2 million

$48.0 million

Key-Ventures

$79.7 million

$45.7 million

Fox Residential Group

$64.4 million

$84.5 million

Mercedes/Berk

$38.2 million

$17.7 million

Kleier Residential

$37.4 million

$113.2 million

N/A

Elegran Realty

$16.8 million

N/A

Olshan Realty Inc.

$15.7 million

$15.3 million

Platinum Properties

$13.4 million

$20.3 million

Source note: Data was gathered from the OLR listing portal in mid-March, except for the number of Manhattan agents, which was gathered from brokerage websites. Rankings include Manhattan-based brokerages and agents and active Manhattan residential listings updated within 90 days. Data does not include multifamily properties, or listings in contract or that have pending offers. “Boutique” is defined as firms with 5 to 50 agents.

BY HAYLEY KAPLAN ber-high-end firms dominated the ranks of Manhattan’s top boutique brokerages this year as prices soared in the luxury market — even as firms competed for a shrinking number of available listings. With last year’s top boutique firm, CORE, now categorized as a mid-size company on The Real Deal’s annual ranking, Upper East Side brokerage Leslie J. Garfield regained its long-time berth as the

Manhattan (see related story on page 56). And while the biggest firms in the city deal in volume, boutique firms rely on far fewer listings and can therefore see their total dollar value of listings more severely sink when their listings count drops — even by just one or two properties. Collectively, the top nine boutique firms had 91 Manhattan residential properties listed for sale, for a total sticker price of $443.6 million; those firms had 227 brokers. That’s a dramatic decrease from last year, when the top nine boutique firms had 254 Manhattan residential listings totaling $823.4 million. At the same time, however, the de-

00 April 2007 www.TheRealDeal.com

Boutique bonanza Known for specializing in townhouses, Leslie J. Garfield is headed by the founder’s son, Jed Garfield. The 11-agent firm’s most expensive listing is currently a $30 million Carnegie Hill townhouse at 12 East 96th Street. Still, TRD’s data showed the firm with only 10 Manhattan listings this year, compared to 23 (totaling $182.4 million) in 2012. The Modlin Group’s 76 Crosby Street, #PH

Fox Residential’s 400 East 67th Street, #28A

No. 1 boutique firm. The company had some $93.8 million in exclusive residential sales listings as of mid-March, when TRD collected the data from listings provider On-Line Residential. Following on its heels is the six-agent brokerage the Modlin Group, with some $84.2 million in listings. Laurance Kaiser’s Key-Ventures rounded out the top three, with $79.7 million, according to TRD’s research. Despite the high prices of listings now on the market, many boutique brokerages now have fewer listings than they did at this time last year, largely due to the overall inventory shortage currently plaguing

rarely selling any of our exclusives without a bidding war right now,” she said. “It’s crazy.” She added: “It is truly frustrating to have a great buyer and not have anything great to show them. Or to have three things, rather than 30 things, to show them. And I think it’s very frustrating for buyers, who really need to buy, [but] can’t find what they want.”

Fox Residential’s 133 East 64th Street, #2B

Mercedes/Berk’s unit at Time Warner Center

mand for luxury homes has given firms more higher-priced exclusives than ever. Perhaps as a result, some firms did see substantial growth. The Modlin Group, for example, had nine Manhattan listings worth $84.2 million — almost double the $48 million it recorded at this time last year. This odd combination of market conditions is frustrating for brokers, noted Barbara Fox of Fox Residential Group, which came in at No. 4 with $64.4 million in listings. “We’re

“I have five or six good customers, and most of them have seen everything on the market,” he said, “which means the entire office is spending a lot of time on the phone digging for new product.” Among the most dramatic leaps in the rankings was Modlin’s jump to second place from sixth place last year. The firm specializes in “high-net-worth individuals and families,” said Adam Modlin, the company’s president and founder. “Having those specialized and trusting relationships over a period of years creates a certain ongoing business and stability that, thankfully and humbly, has been able to exist in spite of uncertain economic times.” Though Modlin famously refuses to name his clients, he is known for working with celebrities, including baseball superstars A-Rod and Ichiro Suzuki. Among the firm’s priciest listings is a $24.5 million penthouse at 76 Crosby Street, which Modlin described as “one of the best and nicest penthouses in all

Luckily, Garfield said, the firm has been able to compensate by working with buyers more frequently (see related story on page 16). The lack of inventory “hasn’t specifically affected our bottom line yet, but I’ve definitely noticed it,” he said. Still, it’s clearly exasperating.

of New York City” because of its renovation and design work. The house reportedly belongs to TV personality Kelly Ripa and her Continued on page 106

www.TheRealDeal.com May 2013 43

Top residential firms 2013

Signed, sealed and delivered A first-ever ranking of closed residential deals shows Corcoran finishing on top in 2012

W By Adam Pincus

hile the Corcoran Group — Manhattan’s second-largest residential brokerage — may have seen its listing count drop in the last year, it led the borough in overall residential sales, according to a first-ever ranking of closed transactions by The Real Deal.

greater in 2012, the StreetEasy data showed. Corcoran (including Corcoran Sunshine Marketing Group) represented the sellers in a whopping quarter of all those sales — for a total of $3.1 billion in closed transactions, the figures revealed. (The megafirm, which is led by CEO Pamela Liebman, disputed TRD’s numbers, say-

On the closed sales front, there was a sharp drop off after the top three. Sotheby’s International Realty ranked No. 4 with $829 million, followed by Stribling & Associates with $719 million and Halstead Property with $665 million, according to the data. (A source said, however, that Stribling closed $802 million, while Halstead

Residential firms by closed Manhattan deals above $1 million (2012) Firm

Total No. of sales

Dollar Volume

Sales per broker

Corcoran Group

1,178

$3.1 billion

$2.8 million

Douglas Elliman

907

$2.4 billion

$1.6 million

Brown Harris Stevens

526

$2.1 billion

$4.8 million

Sotheby’s International Realty

189

$829 million

$4.2 million

Stribling & Associates

206

$719 million

$3.4 million

Halstead Property

312

$665 million

$1.1 million

Warburg Realty

121

$323 million

$2.6 million

Town Residential

$254 million

$947,041

CORE

$148 million

$2.8 million

Nest Seekers International

$82 million

$265,744

Leslie J. Garfield & Co.

$71 million

$8.9 million

Keller Williams NYC

$69 million

$530,496

Kleier Residential

$67 million

$1.9 million

Bellmarc Realty

$57 million

$234,620

Citi Habitats

$41 million

$66,182

Source: Sales data provided by StreetEasy. Includes Manhattan deals above $1 million that closed in 2012. Sales-per-broker figures calculated by TRD using brokerage agent counts from 2012. Warburg Realty and Keller Williams per-broker figures were based on 2013 figures because 2012 numbers were not available.

Indeed, the firm beat its rivals through its strong grip on the under-$5 million market, according to a TRD analysis of StreetEasy data, which looked at 2012 closed seller-side sales of $1 million or greater. But while the company closed more sales than any other firm, its smaller rival Brown Harris Stevens bested it — and all other firms — when it came to selling luxury homes of $10 million or more. The crowded residential brokerage landscape, put under additional pressure last year as listings dried up, closed approximately $13 billion in Manhattan residential sales of $1 million or

44 May 2013 www.TheRealDeal.com

ing it closed $3.5 billion.) Next was Douglas Elliman, the private company owned by Howard Lorber and Dottie Herman, with just over $2.4 billion, TRD’s analysis showed. (It claimed to have done $3 billion.) And ranking No. 3 was Brown Harris Stevens, led by President Hall Willkie. The company, owned by Terra Holdings, represented the seller in approximately $2.1 billion in residential transactions. The same three firms took the three top spots when it came to listing volume during a snapshot this March, though in slightly different order (see related story on page 38).

claimed to have completed $712 million in deals.) TRD reviewed data for more than 30 firms from StreetEasy to come up with its ranking of the top 15 firms. Buyer’s side sales were excluded, as were firms whose main business is representing new development projects. Sofia Song, vice president of research at StreetEasy, said 2012 was the year that the Manhattan market picked up steam and “moved beyond stagnation.” “The year was marked by extremely low inventory, the highest number of closings and the highest median price in Manhattan since 2008,” she said.

Competing strategies Corcoran’s ability to close more sales than any other firm in the city last year was achieved by controlling the market for deals between $1 million and $5 million, which, according to TRD’s analysis, was Manhattan’s most active price segment with about $7.8 billion in sales. Indeed, Corcoran cornered about 28 percent of that slice of the market, with more than $2.2 billion in sales in that category alone. “We are dominant in several parts of the market. We are happy to sell a $500,000 apartment and a $50 million apartment,” Liebman said. “There are certain companies that prefer to specialize, to brand themselves as strictly high end. [But] I don’t think you have to only do high-end sales in order to be successful.” BHS’s showing at the top of the market was equally as impressive. “We sell at all the price ranges,” Willkie claimed. “But we definitely dominate at the high end. We targeted that and we dominate it.” In that $10 million-and-above segment of the market, BHS was the selling-side brokerage on a third of the $2.2 billion in deals, or $726 million worth of sales. That was far more than the next two firms — Douglas Elliman and Corcoran — which each had about $370 million in closed deals for 2012 in that high-end category. Compared to the other firms that TRD surveyed, Douglas Elliman, the borough’s largest brokerage, had a more equal distribution between its low-end and highend deals. “Our goal is to have market share in all categories,” said Steven James, Douglas Elliman’s president of Manhattan brokerage. But it’s a constant balancing act. “On a monthly basis we are looking to see where listings are coming in and see how we stack up against other companies, and where sales come in and how we stack up,” James said. If he notices the firm is losing share or simply believes it should have more activity in an area, it shifts brokers around or makes a strategic hire in that area, he said. Some firms, industry executives said, spread their deals among different price points as a deliberate business plan. Continued on page 104

www.TheRealDeal.com January 2013 65

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Commercial

The far side

A spate of new office developments are duking it out for tenants along Manhattan’s western edge

Cushman & Wakefield’s Bruce Mosler, left, and Brookfield’s Jeremiah Larkin at the Manhattan West construction site.

With only a finite number of large potential renters, the competition for office tenants is heating up.

By Adam Pincus nly a few times in modern Manhattan history has an entirely new office district sprung up all at once. In the 1930s, there was Rockefeller Center; the 1970s saw the World Trade Center complex; and today, developers are planning nearly 15 million square feet of new office space in the Hudson Yards area in the 30s on the Far West Side. The new projects expected to rise over the next decade include the Related Companies’ North and South towers at Hudson Yards, Extell Development’s One Hudson Yards, Brookfield Office Properties’ Manhattan West and Moinian’s 3 Hudson Boulevard, as well as Sherwood Equities’ 447 10th Avenue and Alloy Development’s 450 Hudson Park Boulevard. But before starting construction on these new towers, developers must first land an anchor tenant willing to take at least 400,000 square feet of space. With only a finite number of large potential renters, the competition for office tenants is heating up, as some of the city’s top commercial leasing brokers and developers battle each other with slick marketing campaigns and — of course — behind-the-scenes jabs at rival projects. Many companies are deeply reluctant to move to newly constructed buildings, especially in an untested neighborhood, brokers said. For most companies, it’s cheaper to stay in place and renovate, explained Joseph Harbert, president of the Eastern Region for Colliers International. And some firms fear that moving out of prime Midtown, with its bevy of transportation options, will cause them to lose employees. Related Hudson Yards President Jay Cross agreed, saying: “We compete against renewals as much as new construction.” In 2011, fashion manufacturer Coach signed on to be an anchor tenant of Related’s South Tower. But Coach was already located a few blocks away, in a building directly in the path of Hudson Yards bulldozers. For many of the other big companies whose names

PHOTOGRAPH FOR THE REAL DEAL BY MARC SCRIVO 00 January 2013 www.TheRealDeal.com

are being kicked around as possible anchor tenants, a move to the Far West Side would represent a significant geographic shift from Midtown or Downtown. There are currently 10 to 20 companies said to be on the hunt for large chunks of Manhattan office space, brokers said. These include media companies Time Warner, Sony, CBS and News Corp.; law firms White & Case and Skadden, Arps, Slate, Meagher & Flom; advertising firm GroupM; financial giant Credit Suisse; and fashion house Ralph Lauren. Brokers for the new Hudson Yards–area towers are fighting to lure these tenants, but their efforts could be in vain if companies decide to stay in their current locations, or move to existing office towers instead. Despite these challenges, Hudson Yards so far appears to be beating the odds. Last month, Related snagged two more tenants for the South Tower: French cosmetics maker L’Oreal and software firm SAP. Developers in the area are also competing for tax benefits. A 15-year, 40 percent property tax reduction is being offered for the first 5 million square feet of office space to be built west of 10th Avenue. Related said last month that it will apply for the tax break for the South Tower, which would leave about 3.3 million square feet up for grabs. After the first 5 million, the tax break drops to 25 percent. But some developers may hold off on construction until the neighborhood is more established and competition wanes. “We are waiting until rents get really attractive before we build,” said Ryan Nelson, senior vice president at Sherwood Equities. “Truthfully, it will probably be the next [construction] cycle.” For the time being, sources said asking rents for most of the new towers range from $80 to $90 per square foot. This month, The Real Deal took an in-depth look at the new towers planned for the Far West Side, and how they’re faring in the race to nab tenants.

www.TheRealDeal.com May 2013 49

Commercial

North and South Tower Size: North Tower, 2.4 million sq. ft.;

South Tower, 1.7 million sq. ft. Expected delivery: South Tower, 2016; North Tower, 2018

A rendering of Manhattan West.

Left, a rendering of Extell Development’s One Hudson Yards; right, a rendering of a potential building at Alloy Development’s 450 Hudson Park Boulevard site.

Left, Avison Young’s Arthur Mirante, who is handling leasing at 3 Hudson Boulevard; right, Jones Lang LaSalle Managing Director Derek Trulson, who is part of a team marketing 1 Hudson Yards.

50 May 2013 www.TheRealDeal.com

n the most highly anticipated project on the Far West Side, Related and Oxford Properties have teamed up on a $15 billion, 26-acre Hudson Yards mixed-used project. Last month, Related made major headway on the project when it inked a 99-year, $1 billion lease for the eastern portion of the Metropolitan Transit Authority’s rail yards, which stretch from 30th to 33rd streets and from 10th to 11th avenues. Construction started in December on the South Tower, which is located at 501 West 30th Street and is the first building planned for the parcel. It took more than three years to lure Coach, which ultimately purchased a 740,000-squarefoot commercial condo from Related. (As part of the deal, Related agreed to acquire Coach’s building a block north at 516 West 34th Street.) Now, the South Tower is more than 80 percent leased (including expansion options), with L’Oreal in contract to occupy 402,000 square feet and SAP having signed a lease for 115,000 square feet. Related will have to do it all over again with its second, larger building, the North Tower. Adding to the challenge is that the North Tower, designed by Kohn Pedersen Fox Associates, will rise on an 8.6-acre platform covering active Long Island Rail Road tracks. (Construction on the $750 million platform will also provide a foundation for several other buildings.) Competing brokers who asked not to be identified said potential tenants might have a hard time imagining the long-discussed platform being constructed any time soon. But Related’s Cross said construction on the platform will start in January. That would allow for delivery of the building in 2018, as long as an anchor tenant is in place, he said. As a selling point, Related is highlighting the large footprint of the North Tower, which financial firms could use for trading floors. Plus, the skyscraper will be adjacent to a planned 500,000-square-foot retail building, which Related hopes will allay tenants’ concerns about being isolated on the Far West Side with few food and shopping options. “We are part of a mixed-use project,” Cross said, “so you don’t have to think about an in-house cafeteria [like] you might in other projects.” To sweeten the pot, Related is also offering to swap properties or sell portions of the building as commercial condos, as it did with Coach. Related has also offered that the first companies that sign on for space will get in “at cost.” Cross pegged the approximate ask-

ing rent for the North Tower at $90 per square foot and the price for a condo sale at between $900 and $1,100 per foot, for a hypothetical 1 million square feet.

Manhattan West Developer: Brookfield Office Properties Size: North Tower, 2.2 million

square feet; South Tower, 3.2 million square feet Expected delivery: 2016 or 2017

rookfield first announced the Manhattan West project more than five years ago during the real estate boom. Designed by Skidmore, Owings & Merrill, the project would also sit atop railroad tracks, requiring a platform to cover them. Like many projects dreamed up back then, Manhattan West was halted during the downturn. Then in 2011, the plans were dusted off and reintroduced, with a cheaper platform that would be built more quickly. But after being on the market for nearly two years — longer than any other project except Related’s — Manhattan West still has not landed an anchor tenant. Furthermore, the towers have evolved from a commercial-only concept to one that could include residential as well. Despite not having a tenant, Brookfield plans to begin construction of the $300 million platform in August, with completion set for October 2014, according to Bruce Mosler, chairman of global brokerage at Cushman & Wakefield. Mosler’s team was hired to market and lease Manhattan West. Brookfield has largely finalized the design of the North Tower, but could build it or the larger South Tower first, or even both simultaneously, depending on the anchor tenants’ needs, Mosler said. “There are use groups we are talking to that would encompass one tower, and there are users we are talking to that would require us to build [both] towers” at the same time, Mosler said. Real estate executives not involved with Brookfield’s project said Time Warner is looking closely at the two towers, as well as at Related’s project. Mosler and Jeremiah Larkin, senior vice president and director of leasing at Brookfield, ticked off the advantages of the site, including the South Tower’s 90,000-square-foot floor plates, the largest of the six competing projects. Insiders also noted that the platform will be just 2.6 acres (compared to roughly 8.6 acres on Related’s site), so it will be easier to construct. “We have the best location,” Larkin said, noting the project is just a block from Penn Station. But the tradeoff is that the project will receive tax breaks of only 25 percent, compared with the more generous 40 percent Continued on page 112

www.TheRealDeal.com January 2013 65

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International

Chasing global growth

A look at the most active U.S. developers in hotspots around the world From left: Rob Speyer of Tishman Speyer, Sam Zell of Equity International, Jeff Blau of Related Companies, Joseph Sitt of Thor Equities and Donald Trump of the Trump Organization.

By Hayley Kaplan merican real estate developers have long gone overseas seeking profitable returns in high-demand markets. But recently, developers have started investing with more force in some countries — India, Mexico, China, Brazil and the United Arab Emirates, to name a few — which have seen exponential growth in the past few years. “The risk-adjusted reward is clearly in [developers’] favor,” when it comes to international investment, said Lyman Daniels, the president of CBRE Mexico. “The returns in Mexico [for example], subject to the relative risk, are still quite attractive.” This month, The Real Deal looked at several key countries to see which U.S. and New York developers have emerged as the most prominent.

India

ndia is one of the most expensive (and sought-after) international markets. And there are a slew of American real es-

52 May 2013 www.TheRealDeal.com

tate players getting in on the action, including Atlanta-based Portman Holdings, New York’s Tishman Speyer, Donald Trump, Sam Zell’s Equity International and mega-private-equity players like the Blackstone Group. In November, Portman announced a $300 million “investment and management” role in a high-end residential development — which includes residential towers and row houses — in South Bangalore called the Promont. The project is being developed by Tata Housing, a subsidiary of a Mumbai-based developer. According to Ambrish Baisiwala, Portman’s CEO, the company owns nearly 400 million square feet of residential real estate in India. “What we like [in India] is the urbanization and a growing middle class,” Baisiwala told TRD. Meanwhile, Tishman Speyer, which has had a presence in India since 2006, currently has four new developments in the pipeline there, totaling 7.15 million square feet. Its most significant is

a planned 100-acre mixed-use development located in Hyderabad, a city in southern India. Even Donald Trump has thrown his hat in the Indian real estate market ring. Indeed, the Trump Organization is developing two 22-story Trump Towers in Pune, India. The luxury condos are

Tishman Speyer currently has four new developments in the pipeline in India, totaling 7.15 million square feet. scheduled to be completed by 2015. David Green-Morgan, global capital markets research director for Jones Lang LaSalle, who is based in Singapore, said Pune is “a very fast-growing city.” He said he would expect condos like

Trump’s to fetch over $1 million each. Green-Morgan also said it’s easiest for developers looking to get a toehold in India to target the retail and office sectors. On the office front, he said major cities like Mumbai and New Delhi “are just as expensive as you’ll find in other parts of the world,” making them profitable investment opportunities. In fact, Green-Morgan said those who invest in office buildings can expect returns of 15 to 20 percent in India. Cushman & Wakefield’s 2013 international office report backed that up. It ranked the most expensive office markets in the world and found that New Delhi’s Connaught Place was the fourth-priciest area globally to lease office space at an average of about $135 per square foot (including taxes and other fees). The same study put Manhattan’s priciest office stretch, along Madison and Fifth avenues, at about $129 per square foot (also including taxes and fees). Perhaps to take advantage of India’s potentially high returns, in 2011, the

ILLUSTRATION BY WARREN GEBERT www.TheRealDeal.com January 2011 25

International Blackstone Group acquired a 37 percent interest in the 12.9 million-square-foot Manyata Business Park in North Bangalore in southern India — a newly in-demand market. Blackstone, which did not respond to requests for comment, reportedly paid $200 million for the stake in the three office buildings. Green-Morgan said Indian developers have an advantage over foreign investors because they have pre-existing relationships with local construction players, making it difficult for outsiders to build residential developments on their own. Indeed, in 2011, Equity International partnered with New York–based investment company GTI Capital Group (which, according to its website, invests solely in Indian or India-related businesses) to form SAMHI — a privately held hospitality investment company headquartered in Gurgaon, India. So far, SAMHI has invested in 22 hotels — three of which are completed and 19 that are in the development pipeline, including the Fairfield by Marriott in Bangalore and Four Points by Sheraton hotel in Ahmedabad. According to a JLL 2013 first-quarter market report, investment activity is “gaining momentum” in India, after growth recently slowed to its lowest rate since 2008. The number of deals completed by foreign investors is expected to grow in 2013, the report said. Green-Morgan noted that while labor and construction costs are inexpensive, some Indian cities, such as Mumbai, have land costs that are among the highest in the world.

China

ike India, China has one of the fastest-growing economies in the world, making it attractive for real estate companies looking to make a solid return on their investment. “The massive urbanization and ever-growing middle class have created an unpredicted demand for property services, which is why developers are

Interests as one China’s earliest and biggest U.S. developers. The company, which declined to comment, has developed five properties in Beijing since it opened an office there in 1995, including a 187-room Four Seasons Hotel and the

64 March 2012 www.TheRealDeal.com

China will have more than 200 cities with a population of over 1 million people by 2025, making it increasingly attractive for investors. And Colliers International found that in Shanghai, both residential sales vol-

Equity International’s Boulevard Iguaçu, a residential development it’s working on with homebuilder Grupo Thá, in Curitiba, Brazil.

A rendering of Portman Holdings’ the Promont, a high-end residential development in South Bangalore, India.

Hines’ 21st Century Tower in Shanghai, China, a mixed-use project that includes office, hotel and residential.

“Brazil is a country that had been somewhat closed for some time and had pent-up demand. We saw that early on and [that’s why we] invested heavily.” Brian Finerty, Equity International massive 45-acre, mixed-use California Place in Shanghai. Tishman Speyer is also one of the most active foreign developers in the region. Outside of North America, its larg-

China will have more than 200 cities with a population of over 1 million people by 2025, making it increasingly attractive for investors, according to a recent report cited by JLL. flocking to China,” said Randall Hall, an executive managing director in JLL’s Hong Kong office. Chris Brooke, president and CEO of CBRE China, agreed, explaining that initially American investors were developing office buildings and shopping centers there, but have more recently shifted to mixed-use projects. Hall pointed to Houston-based Hines

Lushan residential development in Chengdu. Phase one of the project is set to be complete in 2015. Hall also pointed to Related, and Michigan-based shopping mall developer Taubman Centers, as other U.S. de-

est holdings are in China, where it owns 14.29 million square feet in Shanghai, Chengdu and Tianjin, at four properties. The largest of those is the under-construction Springs in Jiang Wan New Town, Shanghai — a 66-acre residential, commercial and retail project that will total 9.69 million square feet. Tishman Speyer is also currently building the 2.58 million-square-foot

velopers making their mark. A Related spokeswoman said the company has formed a joint-venture partnership on a forthcoming project, but declined to provide further details. In addition, Equity International is currently invested in Chinese portfolio company Shanghai Jingrui Properties, a middle- and upper-middle-market homebuilder. Hall explained that it’s becoming easier for companies to invest in China, especially in the commercial sector, because governmental regulations have been loosened in the last few years. However, China’s impending real estate “bubble” has received a lot of attention recently, with whole shopping malls and developments reportedly sitting empty. Still, Hall argued that the economy will bounce back later this year because of recent government actions. He cited data from consulting firm McKinsey and Co., which found that

ume and prices increased in 2013’s first quarter. (The average sales price of a new construction house in Shanghai rose 7 percent year-over-year, according to the report.) For its part, while Portman has long been invested in China, company CEO Baisiwala said the firm has always been cautious with its investment there. “What’s holding us back right now is Chinese governmental policy,” he said. “Over the last two years, the government has been trying a number of ways to dampen the enthusiasm, particularly with the real estate market.” Indeed, Beijing officials announced in March that single Chinese residents would only be allowed to purchase one residence in total, while Shanghai simultaneously imposed a capital gains tax designed to limit the amount of product being built. “We want to be somewhat cautious,” Portman added, “and watch where the policies go.”

www.TheRealDeal.com May 2013 53

International

Brazil

hile the Brazilian economy has slowed down considerably since 2011 — according to a JLL report, deal volume declined 36 percent to $6.5 billion in 2012 from the year before — the South American country is still attracting U.S. real estate investors. Market analysts say both the commercial and residential sectors are considered attractive. On the commercial side, Fábio Ma-

consideration building costs in Brazil. And with the 2014 World Cup and 2016 Summer Olympics approaching, the Brazilian government is investing in major infrastructure upgrades that are expected to make real estate more valuable. “Investment in infrastructure is what will help many of the markets grow,” Maceira said. “Rio has done a very good job on promoting business and marketing themselves as a place to invest.” So who are the biggest U.S. developers in Brazil right now?

Meanwhile, in March 2012, New York–based real estate investment firm GTIS Partners closed on $810.2 million in equity commitments to a new fund called GTIS Brazil Real Estate — the largest real estate vehicle focused solely on Brazil, according to news reports. The company committed approximately $1 billion to investments in Brazil, making it one of the most active American private equity real estate managers there. In December, GTIS announced plans

“We invested in some of the other asset categories that aren’t as widely competitive because there’s not as much capital chasing it,” Finerty said. Finerty compared Brazil in 2005 to Mexico in the late 1990s. Both have youthful populations, growing consumerism, large economies and an emerging middle class. “It’s a country that had been somewhat closed for some time and had pent-up demand,” Finerty said. “We saw that early on and [that’s why we] invested heavily.”

A rendering of Gulf Related’s Galleria at Sowwah Square, a 3.1 millionsquare-foot luxury retail project in Abu Dhabi.

A rendering of hospitality company SAMHI’s planned Fairfield by Marriott hotel in Bangalore, India.

Equity International’s Belvedere Joinville, a residential development it’s working on with homebuilder Grupo Thá, in Santa Catarina, Brazil.

Investing and developing Mexican real estate has “become more in vogue within the last year or so because so many other places around the world are either in crisis or the returns don’t meet the risk.” Lyman Daniels, CBRE Mexico ceira, CEO of JLL Brazil, predicts that despite the recent economic slowdown, office rents will grow by 50 percent in the next few years. And Cushman & Wakefield’s abovementioned office report ranked the Zona Sul area of Rio de Janeiro the third-priciest location for office leasing globally. The report pegged the average cost per square foot for office space at about $163 annually (again, including taxes and other fees). Sources say an increase in office rents should only attract more American investment interest to Brazil. In fact, Maceira said commercial returns could be as high as 15 percent, even after taking into

54 May 2013 www.TheRealDeal.com

Tishman Speyer, which has been investing in Brazil since 1995, is front and center. It has 21 commercial, residential and mixed-use projects totaling 11.28 million square feet throughout the country. The firm’s most ambitious project — currently in development — may be the massive Mairarê, an 11-tower, 1,188-unit, 1.57 million-square-foot residential project in São Paulo. The final phase of construction began in November. In addition, Hines, which has developed eight properties since it opened an office there in 1998, is currently developing a residential complex called Interlagos in São Paulo, with 1,250 units in 12 towers.

to further ramp up its investments over the next five years in Brazil with another $1.25 billion. And while Equity International has been invested in Brazil since 2005, the company is continuing to form new joint ventures. Last year, for instance, it invested in homebuilder Grupo Thá, which focuses on developing middle- and upper-class residential properties in Paraná and Santa Catarina in southern Brazil. Brian Finerty, who oversees Equity’s South American investments, said unlike most U.S. investors, which focus on real estate in Rio and São Paulo, Equity has seen high returns in the outer regions.

Mexico

merican investors are taking a page out of Mexican billionaire Carlos Slim’s playbook — and getting more bullish on investing in the country. While Mexico has attracted U.S. developers for some time — Hines has been investing in Mexico since 1994 and has interests in 21 properties throughout Mexico — market analysts say investors have grown far more aggressive in the last year. JLL described Mexico as the “growth story” of investment activity in a first-quarter 2013 market report, noting that investment volume more than tripled in 2012 to $4.4 billion after a 20102011 low. Investing in and developing Mexican real estate has become “more in vogue within the last year or so … because so many other places around the world are either in crisis or the returns don’t meet the risk,” said Daniels of CBRE Mexico. In fact, Finerty said that although Equity International has not invested in Mexico since 2008, it’s currently looking to invest there again. “If you marry the [real estate] competitiveness with all the great demographics, for us it’s an obvious place to track our investment dollars,” Finerty said. Daniels noted that investors are seeing

CBRE Mexico found that in the next three years over 3.12 million feet of office space will come on the market in Mexico City. returns of at least 250 to 400 basis points or more. He said although construction materials generally cost about the same in Mexico as they do in the U.S., labor costs are significantly lower. He attributed the recent surge of activity to the stabilization of the political environment. Although Mexico has been in the news in the past few years because of its drug cartels and trafficking probContinued on page 104

www.TheRealDeal.com January 2011 25

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RESIDENTIAL

The inventory squeeze A neighborhood breakdown of Manhattan’s for-sale property shortage

BY C. J. HUGHES he stock market is soaring. Unemployment is falling. And consumers seem newly confident. But at least one major obstacle is preventing a surge in residential sales in New York City: Even if buyers want to purchase homes, there aren’t many to choose from. In fact, the current inventory crunch, the worst in recent memory, has become the defining feature of New York’s residential market. At the end of the first quarter, there were just 4,960 co-ops and condos in Manhattan for sale — a stunning 34 percent decrease from 7,560 in the same period of last year, according to data from Douglas Elliman. That’s the steepest year-over-year plunge in more than a decade, according to appraiser Jonathan Miller, who prepared the Elliman data and who has tracked the city’s inventory since 2000. Current inventory is hovering around 2004 levels, before the real estate boom gathered steam. Inventory peaked in 2009 and has been falling ever since, Elliman’s data shows. Why the shortage? One key reason is the slowdown of new residential development during the downturn, when construction loans were scarce and those that did get issued were far smaller than they were during the boom. Even as residential development heats up again, banks are far more comfortable underwriting loans for developers to build rental properties rather than condos, industry insiders said. And these days, there are fewer external financial incentives in terms of tax abatements, like the now-expired 421a, which prompted developers to rush projects into

tory shortage, according to an analysis of data provided to The Real Deal by the listings website StreetEasy. Below is a neighborhood-by-neighborhood breakdown, detailing which areas have been hit hardest and which are seeing less severe inventory shortages.

Upper East Side (30 percent drop since 2009) weeping from Central Park to the East River and north to 96th Street, the Upper East Side is among the largest neighborhoods in the city, and also among the ritziest. There were 1,773 apartments for sale on the Upper East Side during the second week of last month, down 30 percent from 2,547 during the same week in 2009, according to StreetEasy’s data. During the same week in 2012, there were 2,219 units listed, 20 percent more than last month’s available Upper East Side inventory. At the same time, the average asking price, not surprisingly, has risen. It shot up 14 percent to $3.2 million last month, from $2.8 million in 2012. The shortage comes despite a slew of new condo projects in the neighborhood, like a pair from Harry Macklowe: 737 Park Avenue, which hit the market this past fall, with 103 condos, and 150 East 72nd Street, which started selling its 22 units in January. There’s also developer Aby Rosen’s 109-unit condo conversion at 530 Park Avenue, which launched sales last summer. In addition to those high-profile new projects, sales continue at Manhattan

Low crime rates, improved subways and more family-friendly amenities are among the factors fueling the city’s popularity, said Ken Fisher, a real estate attorney and former City Council member. Other factors restricting residential

Adding insult to injury — for buyers, at least — is that the lack of supply is sending prices of available homes through the roof. “In a perverse way, tight credit is making housing prices rise, which is completely contradictory,” Miller said. “But it is defi-

Upper East Side YEAR

# OF LISTINGS

2009

2,547

When 100 people show up for open houses, “only one gets to buy it, so that means 99 are stumping around like the ‘Night of the Living Dead,’ looking for a home.”

2010

2,277

2011

2,331

2012

2,219

DOUGLAS ELLIMAN BROKER LEONARD STEINBERG

2013

1,773

the ground, resulting in a flood of residential inventory in the city. Simple demographics may be to blame, too. The city is now adding about 50,000 residents a year, according to U.S. Census records, but the number of homes being added to the market is not keeping pace. Indeed, just 10,599 apartments and single-family homes were built in 2012, compared with a recent high of 33,911 in 2008, according to permits filed with the city’s Department of Buildings.

56 May 2013 www.TheRealDeal.com

inventory today include continued high unemployment and tight credit, industry experts said. Homeowners who are struggling financially or fear they can’t get a mortgage can’t upgrade to larger apartments, said Neil Garfinkel, a veteran real estate attorney who represents buyers and sellers. That means they’re unlikely to put their own homes on the market. “If you can’t trade up, you’re probably not going to sell,” he said.

nitely keeping inventory from entering the market in a normal way.” The tight market conditions have also led to regular bidding wars. Garfinkel estimated that one out of every three Manhattan buyers who comes to his office has engaged in a bidding war of some kind. Last year, by contrast, he might have seen that in just one in 10 deals. “Things have heated up significantly,” he said. None of the major Manhattan neighborhoods have been spared by the inven-

Source: Data for all charts is from StreetEasy and was collected during early April of each year.

House, the famed 534-unit conversion project at 200 East 66th Street. Yet while it may seem like those condos should be boosting inventory levels, they aren’t pouring enough units on the market to make much of a difference, said Sofia Song, vice president of research at StreetEasy. Besides, units in new buildings are typically released in phases, so their impact can be subdued.

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Residential

“In a perverse way, tight credit is making housing prices rise, which is completely contradictory. But it is definitely keeping inventory from entering the market in a normal way.”

Upper West Side (32 percent drop since 2009) cross Central Park, inventory has fallen as well. The Upper West Side — which StreetEasy defines as the area from West 59th to 125th streets — had 1,320 listings on the market last month, down 32 percent from 1,934 listings in 2009. And like on the Upper East Side, the dip has been especially pronounced in recent

Upper West Side Year

# of listings

2009

1,934

2010

1,617

2011

1,800

2012

1,634

2013

1,320

months. There were 1,634 listed units during the second week of April 2012, 19 percent higher than last month’s figure. This comes despite the fact that new condos like the Laureate, a 76-unit, 20-story development at West 76th Street, have launched in recent years. But the number of new units hasn’t been enough to significantly move the inventory needle. And the Laureate, which started sales in February 2011, appears to have just one sponsor unit left, a three-bedroom on the 10th floor at $4.6 million, according to StreetEasy. And as might be expected, prices have crept up, too. The average listing price in the neighborhood last month was $2.42 million, up from $2.3 million at the same time in 2012 and $2.1 million in 2011. The Upper West Side is especially starved for apartments priced Walker Tower is under from $1 to $3 milconstruction at 212 lion, which generWest 18th Street in ally buys a one- or Chelsea, but it’s only adding 53 units to the two-bedroom unit market. in the area, according to Leonard Steinberg, a Douglas Elliman broker. He said those apartments appeal to the broadest cross-section of buyers: empty-nesters, foreigners looking for crash pads, young couples and investors. Steinberg partly blamed the current inventory squeeze — which he referred to as a “crisis” — on sellers’ reluctance to price homes properly. In addition, he said, some owners just don’t want to move, especially since capital gains tax rates are higher now than they were a year ago. “There’s a big share of money in any transaction that you won’t see again,”

64 March 2012 www.TheRealDeal.com

Jonathan Miller, Miller Samuel Steinberg said. “It’s slowing the pace of transactions.”

Greenwich Village (40 percent drop since 2009) reenwich Village, which includes the West Village, is home to some of the city’s wealthiest residents. But there are limits to what deep pockets can do when there’s very little on the market. According to StreetEasy, there were only 434 apartments on the market in the area — which stretches from West Houston to West 14th Street and Bowery to the Hudson River — in April. That’s a solid 40 percent drop from 726 in 2009 and a 13 percent decline from 501 listings last year. Inventory is especially limited because much of the area, about 50 blocks, is landmarked and therefore restricted from new development, said Fisher. Rudin Management’s construction of 350 condo units at the former St. Vincent’s hospital will ease the logjam somewhat down the road, Fisher said. But those units are not expected to hit the market until 2014. Another new project in the area is the 91-unit 150 Charles Street, from the Witkoff Group. According to published reports, units there have been selling quickly (at high prices), despite the fact that construction is nowhere near complete.

Greenwich Village Year

# of listings

2009

726

2010

555

2011

506

2012

501

2013

434

Still, many developers have bypassed building in the area in recent years in favor of the East Village instead, where there are more development opportunities. “They are no longer looking at Third Avenue as being a barrier,” Fisher said.

Murray Hill/ Gramercy/Flatiron

(28 percent drop since 2009) he Murray Hill/Gramercy/Flatiron area, which stretches from East 14th to 42nd streets, is seeing a slightly less severe inventory crunch than other areas. There were 821 listings on the market in the three adjacent East Side neighbor-

hoods last month, 28 percent less than 1,134 in 2009. As in with other areas, the slide has accelerated since last year, dropping 17 percent from 994 listings. For its part, Gramercy continues to attract marquee-name condo develop-

Murray Hill/ Gramercy/Flatiron Year

# of listings

2009

1,134

2010

995

2011

1,088

2012

994

2013

821

ers, like the Zeckendorf brothers, best known for the blockbuster 15 Central Park West. Their 18 Gramercy Park debuted last year, though it only brought 16 apartments to the area, seven of which have sold, according to StreetEasy. The 98-unit Tempo, on 23rd Street and Second Avenue, launched sales in 2010, but has rolled its condos out in phases. And during the downturn, many were converted to rentals. But Murray Hill may have slightly more inventory than other neighborhoods, said Shaun Osher, chief executive of CORE. He said the area tends to attract specific groups, like well-heeled buyers of townhouses east of Lexington Avenue and twentysomethings fresh out of college. Still, many of those young residents are renters, not buyers, who stay for just a few years before graduating to new neighborhoods. Murray Hill has a “loyal following, but not a very broad demographic of buyers,” is how Osher put it.

Soho (33 percent drop since 2009) oho may be home to a trendy set of New Yorkers, but the small geographic area has in recent years become as much of a retail hub as anything else. As of last month, Soho had only 149 listings on the market. That’s down 33 percent from 221 in 2009 and 22 percent from 192 last year. According to StreetEasy’s boundaries, Soho is bounded by Lafayette, Canal, West and West Houston streets, and includes the Hudson Square enclave that’s emerged in the last decade. And Soho values are skyrocketing: In

April 2012, the average asking price was $3.3 million. By last month, that figure had jumped 40 percent to $4.6 million. Elliman’s Steinberg is currently listing a condo at 497 Greenwich Street for $4.25 million. Despite the fact that the property is in need of renovation, it has two offers, and he said he expects more in the next few months, now that the sellers have finally moved out. Steinberg said open houses tell just as much of a story as statistics do: One hundred buyers can easily show up for a Manhattan open house. “And only one gets to buy it, so that means 99 are stumping around like the ‘Night of the Living Dead,’ looking for a home,” said Steinberg, who added that the current inventory squeeze is the worst he’s seen in his 17 years in the business. Brokers noted that a hurdle to development in Soho is the “artist in residence” requirement, which applies to dozens of blocks and mandates that artists live in the converted commercial loft space within the allotted boundaries. The city does

Soho Year

# of listings

2009

221

2010

211

2011

191

2012

192

2013

149

grant exceptions, though, like at 111 Mercer Street, which launched last fall. But that project added only four units. Hudson Square, which is outside of the artist-in-residence zone, on the other hand, may shake up the status quo soon. In March, the City Council approved a sweeping rezoning of the area, paving the way for former printing plants and large empty lots along Canal Street to be used for residential projects.

Tribeca (48 percent drop since 2009) his affluent Downtown area saw one of Manhattan’s steepest drops in inventory. The neighborhood had 447 homes for sale in April 2009, but last month that number had dropped 48 percent to 232. About half that drop has come since April 2012, when there were 303 listings, or 23 percent more than there are now. The area also saw an average listing price of $5.14 million, the highest of all

www.TheRealDeal.com May 2013 57

Residential

“While there are some condos coming online, there aren’t enough pouring onto the market to make much of a difference to Manhattan’s overall residential inventory.”

Tribeca Year

# of listings

2009

447

2010

306

2011

252

2012

303

2013

232

11 neighborhoods, with prices climbing steadily for the last few years. In 2011, the average apartment price in Tribeca was $3.7 million, while in 2012 it was $4 million. (For all neighborhoods, a small number of sales or a few outlier deals may skew averages dramatically in a given year.) The heavy demand is, in many ways, being driven by the area’s strong public schools, like the now-overcrowded Public School 234. Despite Tribeca’s popularity, the area — which stretches from Broadway to the Hudson River and from Canal to Barclay streets — is relatively small. “There’s not much left to be developed or converted,” said CORE’s Osher, who predicted that just 500 units will come to market there in the next few years. Buyers looking for new construction in Tribeca, where much of the housing stock is industrial buildings that have been converted into lofts, are most likely to find it clustered in the northeast corner of the neighborhood. For example, 93 Worth, a condo conversion CORE is marketing, has sold 70 percent of its 92 homes in only four months, Osher said. Meanwhile, the 20-story Franklin Place, which is developed by the Elad Group, has 53 units, though sales have not yet launched. Elad’s 250 West Street condo conversion has 111 units, but just a handful, including a $42 million pentTribeca’s 93 Worth, where 70 percent of the house, remain. 92 units have sold in only Perhaps the four months. most high-profile of the new Tribeca buildings is 56 Leonard, a 60-story skyscraper with 145 units being developed by Hines and the Alexico Group. The Herzog and de Meuron–designed building, sources said, typifies the supply crunch. Corcoran Sunshine Marketing Group, which is handling sales, said 70 percent of the units at the newly launched building are already sold.

Financial District

(24 percent drop since 2009) he area south of Fulton Street at Manhattan’s tip saw more new develop-

58 May 2013 www.TheRealDeal.com

SOFIA SONG, STREETEASY ment during the boom than any other part of Manhattan. As a result, its supply of available apartments has not dropped as steeply as other neighborhoods. As of last month, there were 427 apartments available for sale in the Financial District (excluding Battery Park City), down 24 percent from 564 in 2009. But the decrease has been comparatively mild as of late: From last year to this, inventory decreased 10 percent from 476 listings. But a catch-22 is in play in the area, said Richard Rothbloom, a broker with Brown Harris Stevens who specializes in the Financial District. Knowing about the inventory squeeze, some would-be buyers are staying put, convinced there’s nothing out there for them, he said. “And I don’t see things changing much this summer, as people usually list in the spring,” he added. Conversions of office buildings have slowed to a trickle, with few new projects

Financial District Year

# of listings

Year

# of listings

2009

452

2010

570

2011

530

2012

447

2013

266

a drop of 41 percent. That may be one reason why prices have crept upwards, growing from $767,000 in April 2011 to $794,000 in 2012 to $875,000 last month. Few large condos have gone up in the neighborhood since the boom, when there were a slew of projects including the 249-unit Kalahari on West 116th Street and the 160-unit Fifth on the Park. But the area is still drawing interest. Early last month, the Real Estate Board of New York hosted an open house event featuring 10 Central Harlem listings. The event, which showcased listings such as a two-unit brownstone townhouse at 165 West 126th Street priced at $2.5 million, was aimed at introducing buyers to Harlem properties.

2009

564

2010

546

2011

550

2012

476

Midtown West

2013

427

(51 percent drop since 2009) here was a time when few would have considered this part of Manhattan to be a hot residential market, but the boom changed that. Indeed, new towers filled the West 42nd Street corridor, like Extell Development’s 551-unit condo the Orion and the Moinian Group’s 475-unit Atelier. But despite its unconventionality, or maybe because of it, this neighborhood — which spans West 30th to 59th streets,

in sight. In December, Rothbloom said, he sold one of the last sponsor units at 20 Pine, a 35-story condo conversion that first hit the market in 2007. There are some sponsor apartments left at 350-unit condo-hotel 75 Wall Street, he said, since developer the Hakimian Organization rented them out rather than selling them. But those come on the market only occasionally. Meanwhile, there are 23 listings on the market at the W Downtown Hotel & Residences, according to StreetEasy, with the cheapest being a $1.1 million studio. Some frustrated FiDi home-seekers are now looking in Brooklyn instead, Rothbloom said. He noted that a recent client who lives in a two-bedroom in the Financial District and wanted to upgrade to a unit with a terrace or garden is now searching in Carroll Gardens and Park Slope, “or something close to a subway line.”

Central Harlem (41 percent drop since 2009) n April 2009, there were 452 co-ops and condos for sale in this part of Harlem, which StreetEasy defines south of West 155th Street. This year there are just 266,

Central Harlem

Midtown West Year

# of listings

2009

521

2010

434

2011

453

2012

385

2013

257

from Eighth Avenue to the Hudson River — lured many foreign buyers, who liked its proximity to major tourist attractions. Overseas investors may have a hard time parking their money there today, however. As of last month, there were only 257

units for sale in Midtown West, a 51 percent decrease from 521 in 2009. The inventory is also 33 percent lower than it was last year at this time, when there were 385 listings available. Not surprisingly, prices have swung hard in the other direction: The average list price in 2009 was $1.4 million, but in 2013, it was $1.9 million, a 36 percent spike. Sources said developers seem reluctant to commit to condo projects because Manhattan land costs are so high. Research from the Marketing Directors shows that land prices in the borough have risen by 50 percent in the last few months. To come out ahead, developers would have to be able to charge at least $2,000 a square foot for their finished product. That price point would only work for targeting luxury buyers, which not all projects can do, Fisher said.

Chelsea (43 percent drop since 2009) helsea also saw a large inventory drop, despite being a darling for developers. In April 2009, Chelsea had 576 listings,

Chelsea Year

# of listings

2009

576

2010

445

2011

463

2012

407

2013

331

compared to 331 at the same time this year, a 43 percent decrease. Predictably, average listing prices have jumped, from $2 million to $2.4 million in that same time period, the data shows. The neighborhood, located from West 14th to 30th streets and Sixth Avenue to the Hudson River, encompasses the hot High Line area. A Corcoran broker who frequently works in the area, but asked to remain anonymous, said strong demand is one reason for the lack of inventory. In the last few weeks, he said, open houses have drawn roughly double the number of people there were a year ago. “There’s a real increase in buyer confidence out there,” he said. Still, big new developments are in short supply now that projects like Jean Nouvel’s 100 Eleventh Avenue and the 150-unit condo tower at 200 Eleventh are sold out. And newer condos in the area have Continued on page 108

www.TheRealDeal.com January 2011 25

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

1970: COURT RULES IN FAVOR OF CHURCH TAX EXEMPTIONS

he U.S. Supreme Court ruled 43 years ago this month that religious organizations were exempt from paying state property taxes. The landmark case rejected a lawsuit filed by a New York property owner who claimed that the state law exempting religious organizations from paying into the public coffers was unfair to other owners. The case came before the nation’s highest court after Bronx attorney Frederick Walz purchased a 638-square-foot parcel of land overrun by weeds in Staten Island in 1967. Walz quickly filed suit against the City Tax Commission over the $5.24 annual tax bill on the land, which was worth $100. In his objection, Walz claimed the religious exemption drove up his property tax bill and indirectly forced him to Chief Justice Warren Burger subsidize religious organizations. He also argued that allowing the groups to not pay taxes ran counter to the First Amendment’s prohibition on creating a law “respecting an establishment of religion.” The property owned by religious organizations in New York City at the time was valued at approximately $692 million, which would have generated $36 million annually in property taxes. The 7-to-1 ruling by the nation’s highest court, which was led by Chief Justice Warren Burger, found that the state law did not violate the Constitution’s so-called establishment clause.

1939: TIFFANY’S MOVES TO UPPER FIFTH AVENUE

n a decision exemplifying the continued uptown march by luxury retailers on Fifth Avenue, famed jewelry store Tiffany & Company announced a deal to relocate 20 blocks north to 727 Fifth Avenue at 57th Street, 74 years ago this month. At the time, Tiffany’s was located at 401 Fifth Avenue, at 37th Street, an area that was losing its influence as a shopping district. When Tiffany’s opted to build its McKim, Mead & White– designed building at 401 Fifth Avenue, which it had called home since 1905, the area was a teeming shopping strip (see below item). But with the center of the city’s high-end shopping district shifting north, the company opted for a location Tiffany’s building in the heart of the swanky retail action. “The move provides a significant touch of stability to the at 727 Fifth Avenue street, which has become known as America’s Rue de la Paix,” the New York Times wrote at the time, referring to the famed Paris thoroughfare. The jewelry store moved into its newly constructed eight-story building in October 1940.

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1909: RECORD SALE PRICE FOR FUTURE LORD & TAYLOR HOME

wo brothers paid a record price for a corner lot on Fifth Avenue that ultimately created one of the largest store frontages on a newly booming section of Fifth Avenue for Lord & Taylor’s flagship department store. Frank and John Burton paid approximately $950,000, or $265 per square foot — a Fifth Avenue record at the time — for the northwest corner at 38th Street. The purchase gave the Burtons control of about 148 feet along the avenue, enough to attract the large retail tenant. “If you’ve ever bagged anything after gunning for it for 12 years I think you have a fair idea of how we feel,” John told a New York Times reporter at the time. The brothers were not the first in their family to own this Lord & Taylor’s flagship department store prime piece of Fifth Avenue. Their father owned the entire block front along Fifth between 38th and 39th streets, but sold most of it off in pieces in the mid-1800s, including this parcel for $47,000. At the turn of the century, Fifth Avenue just north of 34th Street was a trendy spot with specialty and department stores like Tiffany & Company and B. Altman & Company moving in. In 1912, Lord & Taylor signed a 21-year, $500,000-a-year-lease with the Burtons in order to relocate from its Broadway and 20th Street location, which it was outgrowing. In 1914, Lord & Taylor moved into the 10-story building at 424 Fifth Avenue, which it still occupies. Compiled by Adam Pincus

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VITAL STATS NAME: Martin Nussbaum AGE: 37 TITLE AND COMPANY:

Principal, Silverstone Property Group HOMETOWN:

South Africa CURRENTLY LIVES:

Upper East Side BUILDING BLOCKS How many buildings does Silverstone own? We own and manage over 35 buildings. The build-

Do you have other horror stories?

ings are located predominantly in Manhattan and

We had a tenant in Upper Manhattan who was running

Brooklyn. We have buildings that are as small as

a gambling ring out of their duplex. They had slot ma-

10 units, and we’re under construction on build-

chines, roulette tables, blackjack tables. It was unbe-

ings as large as 200 units. About 95 percent of

lievable. The only reason we found out is that the po-

the portfolio is rental, but we’ve recently started

lice shut down the place. We ended up having to pay

working on two or three new condo deals.

thousands of dollars in violations and it took us five months to evict them.

What are the biggest challenges of being a landlord in the city?

BOTTOM LINE

Financially, the biggest challenges we’re see-

You said you started the company in 2008.

ing are real estate taxes and insurance. Ever

Was it tough to launch during the recession?

since Hurricane Sandy hit, insurance compa-

We didn’t have any troubled assets, so the trouble

nies have gone crazy. Our insurance policies,

for us was that no one was doing business. Once

both on the property side, and even more so

the economy started to thaw, we were able to focus

on the construction side, are double. Also, the

on buying new stuff, whereas a lot of other people

market is so strong that it’s becoming much

… were stuck working out their problems for two

more difficult to find deals that pencil out to the

years.

same returns that we’ve seen over the last four or five years.

What kinds of assets are you focused on acquiring?

How did you fare during the hurricane? We got lucky. It didn’t impact any of our buildings in any significant way.

Anything I’m looking at is going to have a heavy repositioning angle or a ground-up development opportunity. I want to be able to change the unit mix or change the feel of the building so that it becomes something

How did you get into real estate?

new. What can I do to create value to that building so

I studied pre-med at SUNY Albany. I decided to take a

that when it’s completed, there’s a strong financial return?

year off before going to medical school. Just by chance,

We’re [also] very focused in Brooklyn. The condo numbers are

I ended up working for Wells Hill Partners, a real es-

higher in Manhattan, but not so much higher that it justifies

tate investment bank. I loved real estate so I bailed on my

buying land or buildings at quadruple the cost.

medical career. Where does your capital come from? How did you end up starting your own firm?

It depends on the asset. We’ve successfully built a group of family

I worked in real estate investment banking for about three

and friends that have supported a big chunk of the business we’ve

or four years and then I worked for a large family office firm called Atlantic Realty based in New Jersey. I went out on my

done so far. On larger transactions, we partner with institutional investors. And our transactions are getting larger.

own at the end of 2008. I have three partners — Josh Zegen, Brian Shatz and David Schwartz. We all grew up together.

You recently purchased a warehouse property in Dumbo for $25 million. What are your plans?

LANDLORD LIFE

I don’t want to talk specifically about that deal until it’s closed.

What are the tools of the trade you couldn’t live without? One really important tool for real estate people is Google

You’re building a 170-unit rental project on North 6th Street

Maps. I can sift through deals from my office by looking at the

in Williamsburg. Where are you in the process?

numbers peripherally and going on Google Maps to see them

We’re doing foundation work now. It’s two buildings that share a

from the outside. Then I’ll go look at the good ones [in person].

courtyard, an entrance and amenity spaces. We’re in construction on the first phase right now. We hope it will be completed in

What’s been your strangest tenant experience?

the next 12 to 14 months. The other building will be two or

One of our rent-stabilized tenants — an elderly lady on the

three months behind it.

Lower East Side — used to have live fish delivered every other day. There would be an old man who would walk in with two

Do you have any other new projects?

buckets on his shoulders with live eel [in them]. One day he

We have a really exciting conversion project at 78 Irving Place on the

dropped his buckets and we had live eel all over our lobby.

corner of 19th Street. We’re planning on developing seven to eight ultra-high-end, full-floor condos. By Katherine Clarke

62 May 2013 www.TheRealDeal.com

PHOTOGRAPH OF NUSSBAUM FOR THE REAL DEAL BY DEREK ZAHEDI

Top 1 0 0 Cur re nt E x cl u siv es : S a l es

Top 1 0 0 Cur re nt E x cl u siv es : L ea si ng

Address

Bed

Bath

Price

Address

Bed

Bath

Price

Address

Bed

Bath

Price

Address

Bed

Bath

Price

1 York Street

4.5

$22,000,000

57 Laight Street

$2,350,000

79 Worth Street

Studio

$6,900

175 WEST 90TH STREET

1.5

$4,395

820 Park Avenue

4.5

$16,500,000

104 Charlton Street

$2,350,000

15 William Street

$6,895

122 WEST 20TH STREET

$4,250

161 East 63rd Street

$14,950,000

301 East 62nd Street

$2,299,000

536 Madison Avenue

$6,600

1500 FIRST AVENUE

$4,200

129 Lafayette Street

3.5

$14,660,000

735 East 9th Street

$2,195,000

536 Madison Avenue

$6,600

99 JOHN STREET

$4,200

845 United Nations Plaza

$13,000,000

74 Fifth Avenue

1.5

$2,195,000

70 Hester Street

STudio

$6,500

10 SHERIDAN SQUARE

$4,200

88 Franklin Street

4.5

$12,500,000

215 East 96th Street

$1,900,000

252 Seventh Avenue

$6,500

88 GREENWICH STREET

$4,180

50 Gramercy Park North

$10,800,000

100 West 58th Street

2.5

$1,895,000

117 Varick Street

$6,495

56 PERRY STREET

$4,170

1045 Park Avenue

4.5

$10,000,000

875 Fifth Avenue

$1,895,000

247 West 46th Street

1.5

$6,300

247 EAST 28TH STREET

$4,135

15 Central Park West

2.5

$10,000,000

50 franklin Street

$1,775,000

3 Bleecker Street

$6,200

247 EAST 28TH STREET

$4,055

81 Hanson Place

4.5

$10,000,000

304 East 65th Street

$1,750,000

3 Bleecker Street

$6,200

247 EAST 28TH STREET

$4,020

170 East End Avenue

5.5

$9,500,000

15 Broad Street

$1,725,000

15 William Street

$6,000

235 WEST 56TH STREET

$4,000

165 Charles Street

3.5

$9,000,000

230 Riverside Drive

$1,695,000

40 Prince STreet

$6,000

111 FULTON STREET

STUDIO

$4,000

140 West 75th Street

Loft

$8,000,000

40 West 67th Street

$1,695,000

441 West 22nd Street

$6,000

458 WEST 146TH STREET

$4,000

305 Degraw Street

$8,000,000

100 United Nations Plaza

2.5

$1,600,000

342 West 85th Street

$6,000

160 BLEECKER STREET

$3,995

31 West 21st STreet

$7,995,000

470 Park Avenue

$1,595,000

15 William Street

$5,995

15 WILLIAM STREET

$3,995

126 West 87th Street

4.5

$7,900,000

225 West 60th Street

$1,565,000

54 Spring Street

$5,950

805 COLUMBUS AVENUE

$3,995

114 Liberty Street

4.5

$7,590,000

225 East 36th Street

$1,525,000

206 Front Street

$5,750

301 EAST 62ND AVENUE

$3,995

106 CEntral Park South

3.5

$7,250,000

525 East 82nd Street

$1,495,000

260 West 10th Street

$5,700

532 EAST 5TH STREET

$3,950

137 Franklin Street

4.5

$6,950,000

215 PArk Row

$1,485,000

348 WEst 38th Street

$5,650

925 PACIFIC STREET

2.5

$3,950

100 United Nations Plaza

4.5

$6,788,000

303 East 57th Street

4.5

$1,475,000

360 Furman Street

$5,600

310 WEST 52ND STREET

1.5

$3,925

49 Barrow Street

2.5

$6,498,000

333 Park Avenue South

$1,450,000

532 East 5th Street

$5,600

220 EAST 63RD STREET

$3,900

845 United Nations Plaza

3.5

$6,295,000

235 East 49th Street

$1,395,000

303 West 21st Street

2.5

$5,500

516 EAST 13TH STREET

$3,895

288 West Street

3.5

$5,800,000

220 East 73rd Street

2.5

$1,350,000

532 East 5th Street

$5,350

77 SAINT MARKS PLACE

$3,850

39 Lispenard Street

3.5

$5,500,000

118 East 60th Street

$1,350,000

247 East 28th STreet

$5,350

110 WEST 90TH STREET

$3,750

122 Greenwich Avenue

$5,450,000

28 Fulton Street

$1,350,000

111 Fulton STreet

$5,350

22 RIVER TERRACE

$3,750

37 Greene Street

$5,000,000

88 Greenwich Street

$1,335,000

242 WEst 11th Street

Studio

$5,300

261 WEST 28TH STREET

$3,700

250 West STreet

$4,775,000

450 West 17th Street

$1,300,000

10 West End Avenue

1.5

$5,100

154 West 133rd STreet

$3,695

291 Seventh Avenue

2.5

$4,500,000

234 WEst 21st Street

$1,300,000

324 Bowery

$5,050

245 WEst 25th Street

$3,600

165 Charles Street

$4,500,000

88 Greenwich Street

$1,295,000

101 West 79th street

$5,000

245 WEst 25th Street

$3,600

A Sel ect ion of TOW N Sal e s E xclusi ves

A Select ion of TOW N R ental E xclusives

70 Greene Street

$4,300,000

176 Broadway

Loft

$1,250,000

15 Broad Street

$5,000

230 East 44th Street

$3,600

76 Madison Avenue

$4,300,000

520 WEst 23rd Street

$1,095,000

52 Spring STreet

$5,000

88 Greenwich STreet

$3,600

241 West 23rd Street

2.5

$3,600,000

365 Bridge Street

$1,000,000

77 Horatio STreet

$5,000

160 West End Avenue

$3,600

262 Mott Street

$3,499,000

525 East 82nd Street

$999,000

663 LExington Avenue

$5,000

37 Gramercy Park East

Studio

$3,500

75.5 Bedford STreet

$3,495,000

425 WEst 24th STreet

$970,000

338 WEst 17th Street

$4,995

88 Greenwich Street

$3,500

20 East 9th Street

$3,495,000

110 West 90th Street

$950,000

197 Bleecker Street

$4,950

120 Greenwich Street

$3,500

99 Jane Street

$3,450,000

225 East 79th Street

$925,000

45 East 30th Street

1.5

$4,950

150 West 51st Street

STudio

$3,500

121 West 20th Street

1.5

2.5

$3,250,000

845 PRospect Place

$899,000

845 United Nations Plaza

1.5

$4,900

184 Thompson Street

0.5

$3,500

288 West Street

$3,200,000

81 Irving Place

$895,000

61 West 62nd Street

$4,800

21 South End Avenue

1.5

$3,500

210 East 73rd Street

$3,075,000

14 Horatio Street

$895,000

15 Broad Street

$4,800

2728 Thomson Avenue

$3,500

35 Bethune Street

$2,999,000

301 East 62nd Street

$895,000

15 Broad Street

$4,750

306 West 48th Street

Studio

$3,500

56 East 11th Street

$2,895,000

340 East 64th Street

$890,000

306 WEst 48th Street

$4,725

111 Fulton Street

Studio

$3,500

905 West End Avenue

2.5

$2,895,000

150 East 85th Street

$875,000

306 West 48th Street

$4,700

16 Delancey Street

$3,500

288 West Street

$2,800,000

184 Thompson Street

0.5

$874,000

201 East 36th Street

$4,650

16 Delancey Street

$3,500

79 Laight Street

2.5

$2,595,000

61 Horatio Street

$855,000

75 WALL STREET

$4,650

16 Delancey Street

$3,500

277 President Street

2.5

$2,500,000

176 Broadway

Studio

$850,000

15 WILLIAM STREET

$4,600

160 Bleecker Street

$3,475

200 East 66th STreet

$2,450,000

88 Greenwich Street

$849,000

10 SHERIDAN SQUARE

$4,600

555 West 23rd Street

$3,450

845 United Nations Plaza

2.5

$2,400,000

71 Nassau Street

$849,000

16 DELANCEY STREET

$4,600

561 Tenth Avenue

$3,425

845 United Nations Plaza

$2,400,000

133 SEcond Avenue

$825,000

1068 SECOND AVENUE

$4,500

200 Chambers STreet

$3,400

415 East 54th Street

$2,395,000

2728 Thomson Avenue

$825,000

52 SPRING STREET

$4,500

15 Broad Street

$3,300

14 WEst 11th Street

$2,395,000

401 Hicks Street

$820,000

81 IRVING PLACE

$4,500

116 East 19th Street

$3,300

730 Fifth Avenue New York, NY 10019 (212) 242-9900

110 Fifth Avenue New York, NY 10011 (212) 633-1000

26 Astor Place New York, NY 10003 (212) 584-6100

530 LaGuardia Place New York, NY 10012 (212) 557-5300

TOWN Residential, LLC is a licensed real estate broker and proud member of REBNY. TOWN Residential LLC is a partnership with Thor Equities LLC. * Photographs courtesy of Peter Aaron/Otto for Robert A.M. Stern Architects LLP

88 Greenwich Street New York, NY 10006 (212) 269-8888

337 West Broadway New York, NY 10013 (212) 924-4200

45 Horatio Street New York, NY 10014 (212) 604-0300

239 East 79th Street New York, NY 10075 (212) 929-1400

Top 1 0 0 Cur re nt E x cl u siv es : S a l es

Top 1 0 0 Cur re nt E x cl u siv es : L ea si ng

Address

Bed

Bath

Price

Address

Bed

Bath

Price

Address

Bed

Bath

Price

Address

Bed

Bath

Price

1 York Street

4.5

$22,000,000

57 Laight Street

$2,350,000

79 Worth Street

Studio

$6,900

175 WEST 90TH STREET

1.5

$4,395

820 Park Avenue

4.5

$16,500,000

104 Charlton Street

$2,350,000

15 William Street

$6,895

122 WEST 20TH STREET

$4,250

161 East 63rd Street

$14,950,000

301 East 62nd Street

$2,299,000

536 Madison Avenue

$6,600

1500 FIRST AVENUE

$4,200

129 Lafayette Street

3.5

$14,660,000

735 East 9th Street

$2,195,000

536 Madison Avenue

$6,600

99 JOHN STREET

$4,200

845 United Nations Plaza

$13,000,000

74 Fifth Avenue

1.5

$2,195,000

70 Hester Street

STudio

$6,500

10 SHERIDAN SQUARE

$4,200

88 Franklin Street

4.5

$12,500,000

215 East 96th Street

$1,900,000

252 Seventh Avenue

$6,500

88 GREENWICH STREET

$4,180

50 Gramercy Park North

$10,800,000

100 West 58th Street

2.5

$1,895,000

117 Varick Street

$6,495

56 PERRY STREET

$4,170

1045 Park Avenue

4.5

$10,000,000

875 Fifth Avenue

$1,895,000

247 West 46th Street

1.5

$6,300

247 EAST 28TH STREET

$4,135

15 Central Park West

2.5

$10,000,000

50 franklin Street

$1,775,000

3 Bleecker Street

$6,200

247 EAST 28TH STREET

$4,055

81 Hanson Place

4.5

$10,000,000

304 East 65th Street

$1,750,000

3 Bleecker Street

$6,200

247 EAST 28TH STREET

$4,020

170 East End Avenue

5.5

$9,500,000

15 Broad Street

$1,725,000

15 William Street

$6,000

235 WEST 56TH STREET

$4,000

165 Charles Street

3.5

$9,000,000

230 Riverside Drive

$1,695,000

40 Prince STreet

$6,000

111 FULTON STREET

STUDIO

$4,000

140 West 75th Street

Loft

$8,000,000

40 West 67th Street

$1,695,000

441 West 22nd Street

$6,000

458 WEST 146TH STREET

$4,000

305 Degraw Street

$8,000,000

100 United Nations Plaza

2.5

$1,600,000

342 West 85th Street

$6,000

160 BLEECKER STREET

$3,995

31 West 21st STreet

$7,995,000

470 Park Avenue

$1,595,000

15 William Street

$5,995

15 WILLIAM STREET

$3,995

126 West 87th Street

4.5

$7,900,000

225 West 60th Street

$1,565,000

54 Spring Street

$5,950

805 COLUMBUS AVENUE

$3,995

114 Liberty Street

4.5

$7,590,000

225 East 36th Street

$1,525,000

206 Front Street

$5,750

301 EAST 62ND AVENUE

$3,995

106 CEntral Park South

3.5

$7,250,000

525 East 82nd Street

$1,495,000

260 West 10th Street

$5,700

532 EAST 5TH STREET

$3,950

137 Franklin Street

4.5

$6,950,000

215 PArk Row

$1,485,000

348 WEst 38th Street

$5,650

925 PACIFIC STREET

2.5

$3,950

100 United Nations Plaza

4.5

$6,788,000

303 East 57th Street

4.5

$1,475,000

360 Furman Street

$5,600

310 WEST 52ND STREET

1.5

$3,925

49 Barrow Street

2.5

$6,498,000

333 Park Avenue South

$1,450,000

532 East 5th Street

$5,600

220 EAST 63RD STREET

$3,900

845 United Nations Plaza

3.5

$6,295,000

235 East 49th Street

$1,395,000

303 West 21st Street

2.5

$5,500

516 EAST 13TH STREET

$3,895

288 West Street

3.5

$5,800,000

220 East 73rd Street

2.5

$1,350,000

532 East 5th Street

$5,350

77 SAINT MARKS PLACE

$3,850

39 Lispenard Street

3.5

$5,500,000

118 East 60th Street

$1,350,000

247 East 28th STreet

$5,350

110 WEST 90TH STREET

$3,750

122 Greenwich Avenue

$5,450,000

28 Fulton Street

$1,350,000

111 Fulton STreet

$5,350

22 RIVER TERRACE

$3,750

37 Greene Street

$5,000,000

88 Greenwich Street

$1,335,000

242 WEst 11th Street

Studio

$5,300

261 WEST 28TH STREET

$3,700

250 West STreet

$4,775,000

450 West 17th Street

$1,300,000

10 West End Avenue

1.5

$5,100

154 West 133rd STreet

$3,695

291 Seventh Avenue

2.5

$4,500,000

234 WEst 21st Street

$1,300,000

324 Bowery

$5,050

245 WEst 25th Street

$3,600

165 Charles Street

$4,500,000

88 Greenwich Street

$1,295,000

101 West 79th street

$5,000

245 WEst 25th Street

$3,600

A Sel ect ion of TOW N Sal e s E xclusi ves

A Select ion of TOW N R ental E xclusives

70 Greene Street

$4,300,000

176 Broadway

Loft

$1,250,000

15 Broad Street

$5,000

230 East 44th Street

$3,600

76 Madison Avenue

$4,300,000

520 WEst 23rd Street

$1,095,000

52 Spring STreet

$5,000

88 Greenwich STreet

$3,600

241 West 23rd Street

2.5

$3,600,000

365 Bridge Street

$1,000,000

77 Horatio STreet

$5,000

160 West End Avenue

$3,600

262 Mott Street

$3,499,000

525 East 82nd Street

$999,000

663 LExington Avenue

$5,000

37 Gramercy Park East

Studio

$3,500

75.5 Bedford STreet

$3,495,000

425 WEst 24th STreet

$970,000

338 WEst 17th Street

$4,995

88 Greenwich Street

$3,500

20 East 9th Street

$3,495,000

110 West 90th Street

$950,000

197 Bleecker Street

$4,950

120 Greenwich Street

$3,500

99 Jane Street

$3,450,000

225 East 79th Street

$925,000

45 East 30th Street

1.5

$4,950

150 West 51st Street

STudio

$3,500

121 West 20th Street

1.5

2.5

$3,250,000

845 PRospect Place

$899,000

845 United Nations Plaza

1.5

$4,900

184 Thompson Street

0.5

$3,500

288 West Street

$3,200,000

81 Irving Place

$895,000

61 West 62nd Street

$4,800

21 South End Avenue

1.5

$3,500

210 East 73rd Street

$3,075,000

14 Horatio Street

$895,000

15 Broad Street

$4,800

2728 Thomson Avenue

$3,500

35 Bethune Street

$2,999,000

301 East 62nd Street

$895,000

15 Broad Street

$4,750

306 West 48th Street

Studio

$3,500

56 East 11th Street

$2,895,000

340 East 64th Street

$890,000

306 WEst 48th Street

$4,725

111 Fulton Street

Studio

$3,500

905 West End Avenue

2.5

$2,895,000

150 East 85th Street

$875,000

306 West 48th Street

$4,700

16 Delancey Street

$3,500

288 West Street

$2,800,000

184 Thompson Street

0.5

$874,000

201 East 36th Street

$4,650

16 Delancey Street

$3,500

79 Laight Street

2.5

$2,595,000

61 Horatio Street

$855,000

75 WALL STREET

$4,650

16 Delancey Street

$3,500

277 President Street

2.5

$2,500,000

176 Broadway

Studio

$850,000

15 WILLIAM STREET

$4,600

160 Bleecker Street

$3,475

200 East 66th STreet

$2,450,000

88 Greenwich Street

$849,000

10 SHERIDAN SQUARE

$4,600

555 West 23rd Street

$3,450

845 United Nations Plaza

2.5

$2,400,000

71 Nassau Street

$849,000

16 DELANCEY STREET

$4,600

561 Tenth Avenue

$3,425

845 United Nations Plaza

$2,400,000

133 SEcond Avenue

$825,000

1068 SECOND AVENUE

$4,500

200 Chambers STreet

$3,400

415 East 54th Street

$2,395,000

2728 Thomson Avenue

$825,000

52 SPRING STREET

$4,500

15 Broad Street

$3,300

14 WEst 11th Street

$2,395,000

401 Hicks Street

$820,000

81 IRVING PLACE

$4,500

116 East 19th Street

$3,300

730 Fifth Avenue New York, NY 10019 (212) 242-9900

110 Fifth Avenue New York, NY 10011 (212) 633-1000

26 Astor Place New York, NY 10003 (212) 584-6100

530 LaGuardia Place New York, NY 10012 (212) 557-5300

88 Greenwich Street New York, NY 10006 (212) 269-8888

337 West Broadway New York, NY 10013 (212) 924-4200

45 Horatio Street New York, NY 10014 (212) 604-0300

239 East 79th Street New York, NY 10075 (212) 929-1400

How much does townhouse width affect sales? Both extrawide and superskinny townhouses can fetch a premium due to their rarity By Adrienne Berard t first glance, Manhattan’s toniest townhouses would seem to have little in common with mobile homes. But, in fact, the two share a metric for measuring value: the wider the better. Not only is townhouse width a point of pride for homeowners, buyers and brokers in New York, it’s one of the most important attributes appraisers use in determining the sale price of a townhouse, said Jonathan Miller, president of appraisal firm Miller Samuel. But how much does width actually impact a property’s price per square foot? A review of 214 Manhattan townhouse sales that closed between July 2010 and March 2013 shows that wider townhouses don’t necessarily sell for a higher price per square foot. Indeed, the overall closing price of a home has more to do with location and layout than width, according to the data, compiled by StreetEasy. For example, a 13-foot, four-bedroom townhouse at 35 West 12th Street in Greenwich Village sold for $5.2 million back in 2011, while a nearby 20-foot, two-family townhouse at 69 Bedford Street fetched a mere $2.6 million that same year. The average price for a townhouse was $5.3 million in 2012, according to the most recent Douglas Elliman townhouse market report, prepared by Miller. “It really does become an issue of ego more than anything else,” said Jed Garfield, president of Leslie J. Garfield, a brokerage that special-

The Harkness Mansion at 4 East 75th Street, left, and 333 East 82nd Street, right

izes in townhouses. “I’ve sold houses that are eight feet wide and 40 feet wide and there’s no appreciable difference between the widths.” Instead, a better marker of value, the data sample shows, is how far a townhouse’s width deviates from the Manhattan average — 19.1 feet on the East Side and 19.7 feet on the West Side, according to the Elliman report. For example, J. Christopher Flowers sold the 50-foot-wide Harkness Mansion at 4 East 75th Street to art mogul Larry Gagosian for $36.5 million in 2011, at a price of $1,682 per square foot. Last year, a 12.5-foot-wide townhouse at 153 East 78th Street sold for $6.1 million, or $2,083 per square foot — $401 more

per square foot than Flowers’ former home. (Of course, Flowers famously paid $53 million for the Harkness Mansion in 2006.) “As they get more wide, they get rare,” said Chris Halstead, an executive vice president at Halstead Property, who is listing an 18-footwide townhouse at 333 East 82nd Street for $4.5 million — $2.5 million less than the 22-foot-wide house next door. “That [rarity] contributes to how attractive they are to buyers.” That said, wider townhouses still carry a certain prestige. The wider the townhouse, the more flexibility a buyer perceives in the overall floor plan, said Miller. But, he warned, excessive additions can

Park51 developer considers condos Brokers say Sharif El-Gamal is looking at residential units for the controversial site, but say asking prices are too high By Guelda Voien eveloper Sharif El-Gamal appears to be considering a residential condominium development on the site of the stalled Park51 project, also known as the “ground zero mosque.” El-Gamal has approached multiple brokers in Manhattan seeking advice on how to build and market condos at the site, sources told The Real Deal. The planned 15-story cultural center became a lightning rod for controversy in 2010 due to its proximity to the site of the Sept. 11 terror attacks. El-Gamal’s intention is to ask $2,000 to $2,500 per square foot for the units, according to one source who reviewed his plans. The new concept would not necessarily mean ElGamal would relocate the planned Islamic cultural center; rather, the building would be mixed-use, offering prayer and public space, as well as residences. The building, a former Burlington Coat Factory, is located at 51 Park Place in the Financial District. In January, El-Gamal purchased the property next to the two Park Place parcels he already controls, at 43 Park Place, for $8

66 May 2013 www.TheRealDeal.com

Developer Sharif El-Gamal

Park51 rendering

million. He owns 45-47 Park Place and leases 51 Park Place from ConEdison; the 45-47 and 51 properties comprise the planned Park51 project. No plans for demolition or major construction appear in Department of Buildings records for any of the three addresses. El-Gamal did not respond to phone calls or emails. “Some brokers say he has reached out,” said Stephen Kliegerman, president of Halstead Property Development Marketing. He declined to comment further and said he had not been approached by the developer personally. “I am betting on condos” at the Park51 site, said Adam Leitman Bailey, a real estate attorney who represented El-Gamal in a case where a New York City firefighter sued to have the building landmarked in order to delay construction of the Islamic center. Condos are “a safe bet,” Leitman Bailey said, noting that he has not had contact with ElGamal since that case was resolved in 2011. However, others who reviewed the plans were skeptical that the condos will pencil out — at least while the stigma of the 2010 firestorm lingers. Sources said they had no

decrease value. He remembers appraising a 15-foot-wide townhouse on the Upper East Side in which the owner had installed an elevator, which took up nearly half the width of the floor plan and decreased the value of the property. Townhouse specialist Paula Del Nunzio, a senior vice president at Brown Harris Stevens, said her clients often request homes wider than 20 feet, but not for their layout potential. Instead, they are looking for legacy. “The wider mansions were often created by extraordinary original architects,” explained Del Nunzio. The widest townhouses, she added, were crafted for “clients of the Gilded Age, who sought to reproduce an American version of the palaces of Europe.” Del Nunzio is currently listing the 40-footwide townhouse of Broadway producer Hal Prince for $21 million and a 25-foot-wide historical Greenwich Street townhouse, built in 1819 and asking $19.5 million. Just as buyers covet wide townhouses, there is also demand for the exclusivity of skinny townhouses. Manhattan’s slimmest townhouse, at 9.5 feet wide, is on the market for $3.5 million, or $3,530 per square foot. The 990-square-foot, four-story house at 75 1/2 Bedford Street includes a renovated basement, three bedrooms and two bathrooms. “There is some cachet behind having the tiniest townhouse around,” said Sofia Song, head researcher at StreetEasy. “You can boast about that.” TRD

assurance that El-Gamal could get financing for the project and worried that his reputation as a controversial figure — fair or not — could hamper progress. Construction has not begun at the 51 Park Place site, reports show. Pricing on the potential units is also overly ambitious for the area, one source said. The average sale price per square foot for new development condos listed in the Financial District in the last year was $1,043, according to StreetEasy. “[El-Gamal] has called in a bunch of people to talk about doing a kind of a mega condo development on the site,” a real estate executive who was approached by the developer told TRD. “But I can’t imagine anyone getting comfortable enough” to undertake the project, he said. A rental might make more sense on the site, the executive said, but based on the projections he was shown, the project is already off schedule. “Who knows when it will get done, or if it gets done,” he said. Additionally, the past will likely haunt any condos built on the site, another source, also a prominent executive, said. “It would probably be viable if it was being done by someone less controversial,” that source said. “I am not sure I would want to be associated with it.” TRD www.TheRealDeal.com January 2013 67

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R ece nt Clos ed & In Cont ra c t S a l es Status

Address

List Price

Status

Address

List Price

Contract Signed

157 West 57th Street

$45,500,000

Closed

169 Hudson Street

$5,500,000

Contract Signed

320 West 12th Street

$30,000,000

closed

41 Warren Street

$5,400,000

Closed

133 Mulberry Street

$29,500,000

contract signed

93 Worth Street

$5,400,000

Closed

326-332 Canal Street

$24,000,000

closed

363 Greenwich Street

$5,250,000

Contract Signed

150 Charles Street

$24,000,000

closed

130 West 12th Street

$5,150,000

Closed

101 Central Park West

$23,550,000

closed

684 Sixth Avenue

$5,000,000

Contract Signed

332 Canal Street

$23,500,000

closed

45 Walker Street

$5,000,000

Closed

23 East 74th Street

$18,500,000

closed

860 Fifth Avenue

$5,000,000

Closed

92 Charles Street

$18,000,000

closed

201 West 17th Street

$5,000,000

Closed

400 West 12th Street

$17,500,000

Closed

900 Fifth Avenue

$4,995,000

Closed

35-37 North Moore Street

$16,000,000

Closed

188 East 64th Street

$4,995,000

Closed

33 Vestry Street

$14,950,000

contract Signed

17 East 16th Street

$4,995,000

Closed

145 Central Park West

$13,500,000

Contract Signed

46 horatio Street

$4,995,000

Closed

153 Franklin Street

$9,900,000

Closed

30 West 63rd Street

$4,950,000

Closed

123-125 Mulberry Street

$9,750,000

Closed

65 West 13th street

$4,900,000

Contract Signed

157 West 57th Street

$9,750,000

Closed

65 West 13th Street

$4,900,000

Contract Signed

432 Park Avenue

$9,450,000

Contract Signed

340 East 72n STreet

$4,800,000

Closed

160 Central Park South

$8,995,000

Closed

53 North Moore Street

$4,795,000

Closed

25 North Moore Street

$8,895,000

Closed

55 Warren Street

$4,750,000

Closed

300 Central Park West

$8,850,000

Closed

65 West 13th Street

$4,700,000

Closed

65 West 13th Street

$8,295,000

Closed

21 Jay Street

$4,575,000

Closed

230 West 56th Street

$7,895,000

Closed

85 West Broadway

$4,500,000

Closed

145 East 76th Street

$7,775,000

Closed

60 Riverside Boulevard

$4,500,000

Closed

141 Columbia Heights

$7,500,000

Contract Signed

146 Central Park West

$4,500,000

Closed

130 West 12th Street

$7,500,000

Closed

10 East 22nd Street

$4,450,000

Closed

325 Fifth Avenue

$7,495,000

Closed

40 Mercer Street

$4,300,000

Closed

176 Perry Street

$7,375,000

Closed

40 Mercer Street

$4,300,000

Closed

80 Columbus Avenue

$7,000,000

Closed

25 Bleecker Street

$4,300,000

Closed

11 Fifth Avenue

$6,900,000

Closed

28 Laight Street

$4,295,000

Closed

19 Downing Street

$6,900,000

Closed

515 East 72nd Street

$4,275,000

Contract Signed

49 Barrow Street

$6,498,000

Closed

88 Laight Street

$4,200,000

Closed

33 Vestry Street

$6,450,000

Closed

230 East 73rd Street

$4,100,000

Closed

55 Warren Street

$6,300,000

Closed

293 Church Street

$4,000,000

Closed

33 Vestry Street

$6,200,000

Contract Signed

15 West 11th Street

$4,000,000

Closed

130 West 12th Street

$6,100,000

Closed

70 Hester STreet

$3,999,999

Closed

100 Eleventh Avenue

$6,000,000

Closed

220 Riverside Boulevard

$3,995,000

Closed

223 Warren Street

$6,000,000

Contract Signed

220 East 73rd Street

$3,995,000

Closed

829 Park Avenue

$5,999,000

Closed

100 Central Park South

$3,950,000

Closed

42 Wooster Street

$5,998,000

Closed

203 West Houston Street

$3,950,000

Closed

55 Warren Street

$5,995,000

Closed

7 East 17th Street

$3,895,000

Closed

55 Warren Street

$5,995,000

Closed

238 East 4th Street

$3,895,000

Closed

230 West 78th Street

$5,950,000

Closed

144 West 18th Street

$3,850,000

Closed

145 Hudson Street

$5,850,000

Closed

28 Laight STreet

$3,825,000

Contract Signed

254 Park Avenue South

$5,750,000

Closed

605 Park Avenue

$3,800,000

Closed

104 Wooster Street

$5,700,000

Closed

60 Colloster Street

$3,800,000

Closed

845 United Nations Plaza

$5,699,000

Closed

28 Laight Street

$3,800,000

Closed

88 Franklin Street

$5,650,000

Closed

79 Laight Street

$3,798,000

Closed

104 Wooster Street

$5,650,000

Closed

236 West 26th Street

$3,750,000

Closed

750 Greenwich Street

$5,600,000

Closed

27 North Moore STreet

$3,750,000

Closed

45 Walker Street

$5,500,000

Closed

66 Ninth Avenue

$3,750,000

TOWN Residential, LLC • 730 Fifth Avenue, 8th Floor, New York, NY 10019 • Tel: (212) 242-9900 • Fax:(212) 242-9901 • www.townrealestate.com

Retail

TRD’s essential ICSC guide A time line of the must-attend events at the four-day conference — from panel discussions to pool-side parties

By Jane C. Timm ore than 33,000 real estate professionals are expected to descend on Las Vegas this month for commercial real estate’s largest conference, the International Council of Shopping Centers’ RECon Las Vegas. The conference, which takes place in a 1 million-square-foot space in the Las Vegas Convention Center, provides unparalleled networking and deal-making opportunities, brokers said, and is especially helpful for connecting with retailers who aren’t yet in New York. “I don’t need to go 3,000 miles away to do business with people I see every day,” said Patrick Breslin, executive vice president of the national retail group at the Manhattan-based commercial firm Studley. “It’s a great way to spend time with the people I do business with a couple times a year, or from the Middle East or Asia.” By now, experienced conference-goers have already started working their smartphones to schedule dinners, lunches and meetings with potential clients and colleagues for this year’s conference. Meanwhile, companies have started tweeting their booth locations to ensure they get a good turnout. Experienced industry pros said they typically have 30 to 40 meetings during the course of the conference. Some said they arrive days — or even a full week — in advance to get ready, preparing their booths and networking with other early birds. Eastern Consolidated Senior Director Adelaide Polsinelli, who will be attending ICSC for the sixth time this year, said she expects to seal retail condo deals while at the convention, in addition to cultivating new out-of-town clients who are looking to diversify into the New York City market. Her daily schedule is already filled with client one-on-ones, dinners and parties. “By now, people are already booked,” she said. This year’s conference is on track to be the biggest since before the 2008 financial crisis, ICSC organizers said. Of more than 1,000 exhibitors this year, 160 of them are newcomers, including Sprint, IBM and Starwood Capital Group. Over 1,000 companies are expected to attend, including 100 retailers. Preparation for the conference starts months in advance, as companies organize elaborate booths — many with

PHOTOGRAPHS OF ICSC 00 JanuaryCOURTESY 2013 www.TheRealDeal.com

built-in conference rooms and offices — that can sometimes cost hundreds of thousands of dollars. And many of those booths entice visitors with raffles for everything from iPads to fancy cars, while retailers create full-size versions of their

ample, Cushman & Wakefield’s booth is located on the corner of 13th Avenue and J Street. At S246 Q Street in the Convention Center South Hall, Marcus & Millichap will be showcasing its investment property inventory.

her firm’s booth, and celebrate it at the New York Developers Party. KeyBank’s John Manginelli recommended that brokers write out a “wish list” of potential clients and industry contacts they want to meet and then research

“You never know who’s going to be on the other end of a smile or handshake [at ICSC]. It’s this microcosm of the real estate world.” Lori Shabtai, Winick Realty

The Central Hall at ICSC in 2011

Last year’s New York Developers Party poolside at the Bellagio, complete with mermaids

stores within the convention center’s halls. Sandwich shop Jersey Mike’s Subs, for example, last year created a temporary Jersey Mike’s restaurant inside the convention center, providing freshly made sandwiches to passersby. These displays are organized into “malls,” long rows of booths complete with addresses and street names. For ex-

The sheer size of the conference, along with various parties and dinners taking place all over Vegas, means “you really need to chart your itinerary,” said Polsinelli. “You’ve got three days to really make the impression, finalize and get the deal done.” Her ideal method is to initiate a deal on Monday night at a brokerage’s party, sign the deal on Tuesday morning from

The Bass Pro Shops’ booth at RECon in 2011

all of their recent business. “Do your homework, make a target list, go by their booths and get a commitment to meet back at home,” he said. Planning a geographic route through Vegas is key, said Winick Realty Executive Vice President Lori Shabtai. “Three years ago, I had meetings everywhere, I was going from building to building, and I ended up spending the

www.TheRealDeal.com May 2013 69

Retail three days in the limo!” Shabtai recalled. As a result, she felt like she didn’t spend enough time at Winick’s booth and walking around the “malls.” “Schedule, schedule, schedule, and look at the map,” she advised. To help with that, The Real Deal talked to top brokers to find out where they’ll be spending their time.

May 12 to 18 Brokers say the days leading up to the conference are perfect for small, intimate gatherings. Shabtai said Winick, like other firms, entertains guests poolside in cabanas during this period, which allows her to spend quality time with landlords, brokers and potential clients. For Shabtai, the networking in advance of the conference is as important as the conference itself. “In the few days before the conference starts, I make a tremendous amount of connections,” she said.

Sunday, May 19

Marketplace Mall: Las Vegas Convention Center (noon to 5 p.m.) On Sunday the conference is still gearing up, with most conference attendees just arriving, or spending the day on the golf

Panel: “Retail: The Next Wave” Las Vegas Convention Center (3 p.m.) This panel discussion, moderated by New York hotshot broker Faith Hope Consolo, the chairman of Douglas Elliman’s retail group, draws a large crowd every year, brokers said. This year’s panelists include Stephen Gallant of men’s apparel company JoS. A. Bank Clothiers and Ann Taylor’s Buck Sappenfield. The discussion will focus on the effects of technology on brick-and-mortar stores’ expansion plans. Consolo told TRD she expects 350 to 400 people to attend.

Sunday evening parties In years past, Thor Equities’ poolside party at the Encore Beach Club has drawn thousands of people, and has been the unofficial kick-off event of ICSC. This year, however, a Thor spokesperson said the company will not throw its customary big bash (the spokesperson remained mum on whether company head Joe Sitt will host a more intimate gathering). There are several parties taking its place, however. Massey Knakal Realty Services has joined forces with Fidelity National Title Company for an invitation-only reception at Charlie Palmer’s

of yoga with a visitor to Winick’s booth several years ago. The visitor turned out to be a top player at the fitness company Yogaworks, and Shabtai is now representing the company in its Manhattan expansion.

Keynote address: “A Day in the Life of the Modern Consumer,” Randi Zuckerberg, Las Vegas Convention Center (1:30 p.m.) Zuckerberg, former head of marketing at Facebook and the founder and CEO of Zuckerberg Media, will discuss the impact of new and emerging social media platforms and how they can influence consumer behavior. Zuckerberg, the sister of Facebook founder Mark Zuckerberg, will also address new business development ideas such as “gamification.”

Keynote speaker Gregory Wasson, president & CEO of Walgreens

Monday night parties After the market crashed in 2008, ICSC parties — and the conference itself — were somewhat tame. “People were losing jobs; no one was really in a party mood,” Breslin said. But as the economy has picked up, sources say there are more parties and that they’re getting more elaborate. “I had 27 parties on my list last year,”

Speaker Randi Zuckerberg, former head of marketing at Facebook

Last year’s New York Developers Party

course before getting down to business. Still, the so-called “Marketplace Mall” opens in the afternoon, allowing attendees to begin mingling with more than 300 product suppliers and service companies: contractors, architects, tech companies and the like. New this year is the “Marketplace Mall Education Hall,” featuring 30-minute “power sessions” on topics like retail-lighting trends and roof maintenance.

Opening Session: Las Vegas Convention Center (2 p.m.) This year’s keynote address will be delivered by Dr. Steven Levitt, an economist and co-author of the best-selling books “Freakonomics” and “SuperFreakonomics.” Levitt will discuss his trademark counterintuitive economic theories and how they apply to real estate.

70 May 2013 www.TheRealDeal.com

Aureole restaurant at the Mandalay Bay hotel. And the law firm Jones Day is hosting a private reception Sunday evening at Blue Ribbon Sushi Bar & Grill at the Cosmopolitan Las Vegas Hotel and Casino. After events like these, many brokers head off to private dinners.

Monday, May 20

Booth hopping: Leasing Mall and Marketplace Mall (8 a.m. to 6 p.m.) Monday and Tuesday are the busiest conference days, with brokers flocking to both the Marketplace Mall and the “Leasing Mall,” which features exhibits by shopping centers and retailers. Brokers said this time spent booth hopping is the most crucial part of ICSC, since deals and connections are made on the floor. Shabtai recalled chatting about her love

Polsinelli said. “I think I made it to 17.” Industry insiders said there will be even more this year. Last year, some two-dozen brokerages, banks and law firms hosted parties on Monday night, competing to lure CEOs and other industry hotshots. Among the most anticipated soirées is Newmark Grubb Knight Frank’s annual bash, which is always held Monday night and usually attracts long lines of partygoers anxious to get inside. This year, it will take place at the Marquee Las Vegas nightclub, starting at 7 p.m. “Our party, Newmark’s party, is Monday night. We have it every year. We own that night, and the RSVPs are through the roof,” Newmark’s Jeffrey Roseman told the Commercial Observer last year. “You’re going to have to sneak in.” KeyBank’s Manginelli singled out

Eastern Consolidated’s Adelaide Polsinelli, who will attend ICSC for the sixth time this year

Cantor Fitzgerald’s annual party as a highlight, noting that it attracts a high-caliber group of New York brokers. Cushman & Wakefield is holding its party at the Four Seasons Hotel Las Vegas on Monday at 6:30 p.m. And the real estate team at law firm Gibson Dunn is hosting a Continued on page 114

PHOTOGRAPH OF POLSINELLI FOR THE REALJanuary DEAL BY MAX DWORKIN www.TheRealDeal.com 2013 65

PR O F I L E

Scheetz,uncovered W BY DAVID JONES

alter “Ed” Scheetz might be one of the biggest New York City hotel players that you’ve never heard of — but that could soon change. Having cut his teeth at Apollo Real Estate Advisors and then working with famed hotelier Ian Schrager, Scheetz disappeared from the city’s hotel-and-nightlife scene for several years. Now, in what could be a storied second act, he’s quietly reemerged and is partnering with the head of a major real estate family: Joseph Chetrit. Until 2007, Scheetz, a 48-year-old financial whiz, was CEO of Morgans Hotel Group, the firm founded by Schrager. But in a headline-grabbing scandal, the married father of two resigned when his 24-year-old girlfriend was found dead of a drug overdose in his Las Vegas penthouse. Scheetz was cleared of any criminal wrongdoing, but settled a civil case with the girl’s family in 2010. Now, after lying low for several years, Scheetz has resurfaced at the helm of the startup King & Grove, which has recently been making waves in some of the hottest hotel markets in the country. Indeed, the company has embarked on an ambitious growth strategy, acquiring more than a dozen boutique hotels, development sites and other properties with the financial backing of Chetrit. The partners currently have 14 sites in New York, Miami and other cities, with plans to develop 3,000 hotel rooms over the next 36 months, Scheetz told The Real Deal.

has properties in Chicago and Los Angeles (according to news reports, it’s taking over Downtown LA’s Hotel Clark) — and Scheetz confirmed plans to expand to London and other European cities. Scheetz has known both Schrager and Chetrit for years — in 1993 he helped

After a fall from grace as the head of Morgans Hotel Group, Ed Scheetz returns to the boutique biz

undergoing a $13.7 million renovation in 2011, the 276-room landmarked hotel — originally a women’s residence known as the Martha Washington Hotel — was considered a challenging property to reposition. Jeffrey Davis, managing director at

designed by starchitect Annabelle Selldorf. Morris Sachs, chief risk officer at Greenwich, Conn.–based 5:15 Capital and an original investor in King & Grove, said Scheetz and Chetrit are putting together a series of complicated deals in an effort to make King & Grove

Scheetz has resurfaced at the helm of the startup King & Grove, which has recently been making waves in some of the hottest hotel markets in the country.

Ed Scheetz, the former CEO of Morgans Hotel Group, is now heading up King & Grove.

Building a brand Simon Ziff, president of Manhattan-based real estate finance firm Ackman-Ziff, said Scheetz has a knack for trend-spotting. “Ed has always been on the cutting edge of what’s next,” said Ziff, who’s worked with Scheetz on financing hotel deals in the past. And, what seems to be next is building a boutique hotel brand from the ground up. Scheetz confirmed that King & Grove will be working with Chetrit on a number of high-profile projects, including the Bossert Hotel in Brooklyn Heights, which Chetrit and investor David Bistricer bought from the Jehovah’s Witnesses late last year for $81 million and are converting back into its original use as a hotel. Chetrit did not return calls, but King & Grove is also working with him on 500 Metropolitan Avenue in Williamsburg, a 200-plus unit apartment building, which will also have a hotel and retail space, and the Versailles in Miami. The firm also

72 May 2013 www.TheRealDeal.com

From left: Investor Joseph Chetrit is partnering with Scheetz on a number of hotel deals; hotelier Ian Schrager put Scheetz in charge of Morgans when he stepped down as CEO in 2005; the King & Grove New York on East 29th Street.

Schrager arrange financing for the Delano in Miami Beach and, in early 2004, while he was at NorthStar Capital Investment Group he arranged the sale of the Empire Hotel on the Upper West Side to Chetrit. But it’s only been in the past couple of years that his relationship with Chetrit has developed into a business partnership. The King & Grove partners extended the brand into Manhattan in 2012, when they bought the Hotel Thirty Thirty from Manhattan-based Property Markets Group for $116 million and converted it into a flagship property: King & Grove New York at 29 East 29th Street. Despite

Jones Lang LaSalle and the broker on the sale, noted that the hotel needed “somebody to bring some vision to it.” “They were able to see value where other people looked at it as a plain-vanilla box,” said Davis. Currently, Scheetz and Chetrit are developing a 35,000-square-foot residential-and-retail project at 10 Bond Street with Manhattan-based SK Development and Ironstate Development. The 11-unit cond-op, scheduled for completion by 2014, has won approval from the landmarks commission, and the units, expected to sell for millions, will be

a major hotel company. “It takes a while to get a hotel business off the ground,” said Sachs, who is also teammates with Scheetz on the competitive cycling circuit. “The hotel business is very complicated. There’s a lot of stuff happening behind the scenes.”

Rehabbing a reputation According to some news reports, Scheetz had developed a reputation as a heavy partier while at Morgans. And although he was cleared in his girlfriend’s death, the incident threatened to overshadow his acContinued on page 110

www.TheRealDeal.com January 2011 25 PHOTOGRAPH OF SCHEETZ FOR THE REAL DEAL BY CHRIS MARTIN

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1/30/13 12:14 PM

ARCHITECTURE REVIEW

JA M E S G A R D N E R

The new king of the hill

The height of Viñoly’s 432 Park is set to be matched by its quality

he finishing touches are being placed on Extell Development’s 1,005-foot One57 on West 57th Street. But like the Chrysler Building — which was the world’s tallest building in 1930, but held that title for a mere 11 months before the Empire State Building came along — One57 will soon be replaced as the city’s (and hemisphere’s) tallest residential tower by 432 Park Avenue. Developed by Harry Macklowe and the CIM Group over what was once the Drake Hotel on the northwest corner of Park and 56th Street, 432 Park is set to rise 1,395 feet and will alter the skyline even more than One57 has. Indeed, when completed, 432 Park will be, quite possibly, the tallest building in the city — One World Trade Center will rise 1,776 feet but that is including its antenna. Shorn of the antenna, it is only 1,368. The footprint of this East Side tower — which, according to the sales office, will have a little over 100 condo units ranging in size from 2,600 to 8,200 square feet — is actually L-shaped. It begins on Park and 56th Street and then winds its way around to the midblock section of 57th between Park and Madison avenues. (The building, which is slated to be completed in 2015, will have an entrance on 56th Street. On 57th Street, there will be a lower-lying structure for retail that will extend from the street back to the tower.) The tower’s design was conceived by Rafael Viñoly, and although unauthorized renderings have been floating around for a while now, the developer only officially released renderings of the structure in March. Those renderings confirm earlier impressions, which were highly promising. Born in Uruguay and raised in Argentina, Viñoly has had a distinguished career in New York City. In 2003, he was runner-up to Daniel Libeskind in designing the master plan for the World Trade Center site. Some of his past projects include the Brooklyn Children’s Museum, the Bronx County Hall of Justice, Jazz at Lincoln Center and the City College of New York’s Spitzer School of Architecture, Urban Design and Landscape Architecture. So far, however, he’s better known for his institutional work than for his residential towers, which means that 432 Park is (at least in New York) something of a departure for him. Most architects’ renderings, of course, seek to reveal a prospective building in the most favorable light. In one of the most telling renderings for

74 May 2013 www.TheRealDeal.com

432 Park, however, you see nothing more than a marble ledge, two metallic seats, a coffee cup and a croissant on a simple white plate. Beyond, and slightly below, disappearing into the ether of a Manhattan morning, is the Empire State Building, and farther south, the various towers of the reborn World Trade Center. In the greatest coup de théâtre of all, however, you see the spire of the Chrysler Building — which, according to the rendering, barely rises to the level of the

enhances the sense of immensity. As it rises, 432 Park asserts itself like a cross between a bean-pole and a No. 2 Ticonderoga, while the forest of high-rises that have defined Midtown for the past three generations barely seems to come up to its knees. There is beauty in that freakish thinness, in the almost-absurd notion that something so slight could rise so high with so little visible support. Even more revolutionary than the height, however, is that it’s a residential

planation for buildings like 432 Park and One57. There are other residential buildings in their vicinity, some of them quite tall, like Cesar Pelli’s Carnegie Hall Tower, at 152 West 57th Street. Nor is the skyscraper’s reinvention a question of technology, since the engineering skills

A rendering of 432 Park Avenue, which will be the city’s tallest residential tower when completed in 2015. Inset, right: A rendering that offers a unique height perspective. Insets, below, from top: Architect Rafael Viñoly and developer Harry Macklowe, who is partnering with the CIM Group on the tower.

croissant. This, more than any of the other renderings, is the money shot, the one that sends the blood of Manhattanites racing, not to mention the pulse of moneyed foreigners looking for a piece of real estate in which to invest. In other images, we see the building itself, and if the renderings are accurate, it is a thing of beauty, far surpassing the plodding gaucheries of Christian de Portzamparc’s One57. Recalling a conceptualist sculpture by artist Sol Lewitt, it rises up as a sequence of perfectly square modules along its entire height, without any of the distinction between base, shaft or summit that is the norm with more traditional skyscrapers. Other than what looks to be two-story mechanical cores placed at intervals every 12 floors, there is nothing to give a sense of scale to the building. The sense of pure geometry, the almost polemical denial of scale, only

tower. It would be astounding enough to work 1,400 feet above Manhattan, but to awaken there would be an almost metaphysical experience. Or so the developers hope. And if they are right, then the topmost apartment will represent a trophy so tempting that its price will dwarf any of the fabled tallies for 15 Central Park West (Sandy Weill’s former penthouse there, of course, sold to Russian billionaire Dmitry Rybolovlev for $88 million) and One57 (where a unit is reportedly in contract for $90 million). This reinvention of the typology of the skyscraper for residential use is a result, in Manhattan, of the desire — which began with the colonizing of Soho in the 1980s — of younger buyers, in their attraction to centers of art and culture, to inhabit areas of the city that had originally been zoned for commercial use. But that cannot be the entire ex-

that will eventually create 432 Park are not greatly different from those that gave us the Empire State Building more than 80 years ago. This ambition — combined with the Bloomberg administration’s massive rezoning efforts — has resulted in condo towers taller than anything that has been seen here or anywhere else. If 432 Park, which will consist of glass cladding over a concrete core, turns out as well as its renderings promise, it will be perhaps the defining landmark north of the Financial District — at least when viewed from north of 59th Street, where it will rise in glorious isolation above the lowlier skyscrapers, including One57, that now define the skyline of Central Park South. And together with One Madison Park — the perilously thin Cetra/Ruddy-designed tower that’s been unfairly maligned — 432 Park suggests that finally, after all the hype about starchitects coming to the Big Apple, some genuinely distinguished architecture is being created once again in Manhattan. TRD

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Q&A

Architecture’s new blueprint

The NYC architecture business is seeing development heat up, but the industry mindset is different than it was during the boom BY MELISSA DEHNCKE-MCGILL hen the construction pipeline slows down, it’s not just developers who suffer. The architects who are usually brought on board to design the projects get hit, too. But while new building slowed down during the recession, it’s been heating up lately because developers are rushing to bring apartments online to deal with the shortage of inventory that resulted from the halt in construction (see related story on page 56). In this month’s Q&A, The Real Deal talked to a number of local architects and architecture firm principals to find out what their workloads are like and what sorts of new trends they’re seeing in the New York City development world. What we found is that business, especially for residential projects, is on the rise. Many of the sources TRD talked to said that while there are major differences between now and

Gregg Pasquarelli

principal, SHoP Architects NYC is facing a residential inventory squeeze, but development for new projects is heating up. What are you seeing in terms of new residential projects in NYC in the design phase? There is an inventory squeeze and there hasn’t been a lot of product completed in the last four years, so there is a very short supply. But we see things heating up on the residential development side and our business is up. But we try to be very selective in the number of residential projects we take. So while it is up, it is not something that is dominating our workload. In the wake of NYC’s micro-apartment design competition, we wrote about how more developers were growing interested in pursuing their own micro-units. Are developers approaching you about that? A lot of people have approached us. There is a really strong interest in a product type that doesn’t really exist, but that there’s a

of business to pursue? We designed the modular housing for Forest City and we are doing the first three towers there. No, I don’t think it’s a blow to architecture at all. This is something we’ve been talking about for a decade, and Bruce Ratner had the vision to figure this out. It’s ridiculous the way we are still building. It’s time we came into the 21st century. This is not about building cheaper or faster, this is about building higher quality. When you crack the code, you can get more architecture at reasonable prices. I think this is a fantastic thing for designers. Are developers considering going with smaller, untested firms than in the past? What’s interesting right now is that there is a kind of new breed of midsize firms — firms that are tested, but nimble. There is a little bit of a blurring. It used to be the boutique firms and then the big corporate firms. If you look at the new Madison Square Garden renovation competition that’s coming out — there is Diller Scofidio + Renfro, Santiago Calatrava, Skidmore, Owings & Merrill and SHoP. That’s very interesting because 10 or 20 years ago they wouldn’t take a mix like that to

“Fee cutting is still common. It’s not as bad as it was in 2009 and 2010, but it is still worse than in 2007.” BRADFORD PERKINS, PERKINS EASTMAN great demand for. If you were a young person, would you rather live in 250 square feet [on your own] or in a 750-square-foot apartment that you have to share with three other people? Prefabricated buildings have also gotten a lot of buzz lately. I know you’re working on Forest City Ratner’s prefab residential tower at Atlantic Yards. But do you think the trend toward prefab is a blow to the architecture industry or another avenue 76 January 2013 www.TheRealDeal.com

tackle these big projects. I think it’s the midsize firms where most of the interesting work is happening right now. What do you think are the most exciting projects taking shape or coming down the pike from an architectural point of view in NYC right now? I think the Whitney is very interesting. The fact that a museum of that caliber wants to go to the Meatpacking District and the West Village and connect with the

the boom — on everything from the type of projects architects are working on to developers’ expectations for how quickly projects should get done — the amount of work coming in the door is mostly back up to pre-recession levels. Still, competition is fierce. “Fee cutting is still common,” said Bradford Perkins, co-founder of megafirm Perkins Eastman. “It’s not as bad as it was in 2009 and 2010, but it is still worse than in 2007.” In addition to the solid levels of residential business, architects say retail and hotel development is also taking up a good chunk of their time. And, unlike in the past, they are getting more queries about designing micro-units and prefabricated buildings. For more on which current New York City projects architects think will be most transformative, what’s going on with hiring in the industry and what other challenges architects are facing, we turn to our panel of experts.

Hudson River Park and the High Line is remarkable. It’s something no one could have thought of 10 years ago. I think Norman Foster’s project for the Public Library is going to be great. And I think [our project at] Atlantic Yards, when the towers get built and the 6,000 apartments are online and you’ve got that density connected to the public transit, that’s going to be transformative in a big way. Is there anything interesting going on architecturally in the outer boroughs that you’re noticing these days? It’s called Brooklyn. It is absolutely the coolest city in America bar none right now. You will see a new generation of developer emerge. They are pushing the envelope on design. It’s not seen as an either-or [in terms of] making a lot of money or designing differently… The Howard Hughes Corporation and JDS Development are [also] doing amazing work.

Bradford Perkins

co-founder/chairman, Perkins Eastman What are you seeing in terms of new residential projects in NYC in the design and planning phase? Is your architecture business up or down on that front compared to last year, and two years ago? Starting two years ago we have seen a steady increase in demand for our residential design services — both in New York and in the corridor from Washington, D.C. to Boston. It appears that the small inventory is pushing rents and sales prices to a new level that is stimulating a resurgence in development activity. Which sector of the market is most of your firm’s business coming from these days in New York?

Our practice is a mix of private development such as corporate, residential, hotel and retail/mixed-use; as well as institutional like healthcare, schools, higher education, science and technology. All areas have recovered over the last two years to the point where we are back at pre-recession levels in terms of staffing, numbers of projects and fee volume. Are you working on a lot of projects that have been restarted after faltering during the downturn or are the projects you’re working on mostly new? We did not have a lot of projects that went on hold. Most of those that did are still on hold or dead. Most of our increase in volume is new work. What sorts of new trends are you seeing in NYC that are impacting architecture firms? We’re seeing [office] rents escalating to much higher levels in the neighborhoods where many architects have space. Architecture is a narrow-margin business and this trend may force many of us to move in the future. What’s the competition like among architecture firms for projects these days? The competition remains fierce for the good projects. Fee cutting is still common. It’s not as bad as it was in 2009 and 2010, but it is still worse than in 2007 when almost everyone was busy. Are developers approaching you about designing micro-units and prefabricated projects? We have one project that’s based on a variation of the micro-unit idea, but we do not see it as a major trend at this time. [For prefabricated designs], we have done some work, but we don’t think it is an applicable construction method for most projects. It is not a threat to architects because these buildings still must be designed and documented. www.TheRealDeal.com May 2013 77

Q&A What’s the job market like these days for new architects out of school? Is your firm hiring? The job market for architects has been improving steadily. In New York, we have added over 130 architects since the bottom of the recession. There are still some firms that are struggling, but the majority seems to be cautiously hiring. Are more developers going with smaller, untested firms than in the past? We believe most developers have become more conservative in their architect selection since the recession. We do not see them hiring untested firms for major projects. Is there anything interesting going on architecturally in the outer boroughs that you’re noticing these days? The renaissance of Brooklyn and certain parts of Queens — such as Long Island City and Flushing — is creating the opportunity for good architectural assignments. I think there will be some good buildings built there. We are doing the [Ferris] wheel on Staten Island, which is a unique development and architectural project.

Dan Shannon

principal, Moed de Armas & Shannon Architects Which sector of the market is most of your firm’s business coming from these days in NYC? Seventy percent of our projects are office buildings. There has been a definitive increase in activity. We were fortunate to have been working on several large projects that had been approved to proceed, including Vornado’s 330 Madison Avenue and Brookfield’s First Canadian Place. Both of these were complete redevelopments. Projects like those sustained our activity during the slower period. The current load has steadily increased. What sorts of new design trends are you seeing in NYC architecture today? There is a tremendous focus on retail projects, either new retail buildings such as 120 West 42nd Street; the complete redevelopment of projects like the Herald Center; or repositioning the retail at buildings like 1633 Broadway for Paramount, which is developing the available concourse space below the plaza. Leaders like Apple and Uniqlo have transformed the marketplace and the way owners perceive and value these kinds of tenants. What do you think are the most exciting projects taking shape from an architectural point of view in NYC right now? Galleries and museums are providing some of the most exciting spaces. The new 78 May 2013 www.TheRealDeal.com

David Zwirner gallery by Annabelle Selldorf on West 20th Street has some of the most exciting spaces I have seen recently. Is there anything interesting going on architecturally in the outer boroughs? Every week there appears to be a new, interesting building or a retail or restaurant space in Queens or Brooklyn. Some are using materials in a more progressive way that will definitely be incorporated into other projects. City Point [in Brooklyn], the Barclays Center and the new entry to the Brooklyn Botanical Garden, among others, are important contributors. We recently completed the first building at Gotham Center in Long Island City. The new concentration of buildings there has created a new city center. And we are currently working on 10 Exchange Place in Jersey City, where there is a substantial amount of work on the commercial buildings now.

Eran Chen

principal/design director, Office for Design & Architecture Is your architecture business up or down compared to last year and two years ago? Business is up significantly compared to the past two years. Volume is higher than it was in 2007–2008. There is more activity in the marketplace and much more activity for us as an individual firm in the condo market. What I see in post-recession development is that the quality of the product overall is superior to what we built before. Part of it is the change of perspective of the buyer and the higher expectations of value. What sorts of new design trends are you seeing in NYC architecture today? New materials like terra cotta are being used. Rainscreen systems, meaning masonry systems that are integrated in curtain walls, [are also being used]. A general trend is big apartments. Three-bedrooms are the majority, whereas in the past it was one or two. So the premium market is the dominating market. What are you doing differently for developers these days that they weren’t asking for in the past? We are doing total design, meaning we are doing the architecture and the interiors. Sometimes we do custom furnishing work. I think it’s a trend because the level of sophistication of the buyer dictates a more unique approach to developments that has a more integrated character. Prefabricated buildings have also gotten a lot of buzz lately. Is that a blow to the industry or another avenue of business?

I think [it’s] another interesting avenue. I think it’s going to become more and more successful in the hotel industry and not as successful with condos because condos are driven more toward custom-made, bespoke-type of apartments, while hotels, even on the high end, are based on repetition and modulation. I think that trend is going to grow tremendously in the next few years. Is the architecture business expanding/ contracting in general in NYC? The business is expanding after the huge shrinkage of the recession. We grew by about 15 people in the past two years, so I think it’s going to get better and better. Generally speaking, we are hiring. A lot of the city’s most exclusive residential buildings are being designed by starchitects — like Christian de Portzamparc at One57, Herzog & de Meuron at 56 Leonard and Rafael Viñoly at 432 Park Avenue. That’s not a new trend, but during the downturn, the use of starchitects was on the decline. Are they back or is this just a trend at a handful of exclusive buildings? I think they are back, but by the same token there are more local firms that have emerged after the recession that match those capabilities and design aspirations. So I definitely think there is a new generation of local starchitects. What are the most exciting projects taking shape architecturally in NYC? The new extension of the Whitney Museum on the West Side Highway creates another gateway to the High Line and reiterates how that area is booming. The decision of the Whitney to open their new location there was a very smart one and shifts a lot of the cultural center of the city from the Upper East Side to that area.… I wouldn’t be surprised if the Guggenheim was next. I know they’ve been looking for a location for a long time. The West Chelsea art gallery district is the most condensed area in the world for art galleries. What used to be 23rd–24th Street now extends up to 29th–30th Street.

Nancy Ruddy

principal, CetraRuddy What are you seeing in terms of new residential projects in NYC in the design and planning phase? The market has heated up for us over the past two years, with projects coming to market at this point. We are very busy with new residential projects in two areas: high-end luxury condominium projects and rental building projects.

Which other sectors is your firm’s business coming from in NYC? In addition to residential, we are involved in a number of hospitality projects. The first step when a developer brings the site to us is to analyze the property for both residential and hospitality use or a combination of both. In the largest-scale projects, providing a hotel at the base and residential above is a model that has come into the mix more. Are you working on a lot of projects that have been restarted after faltering during the downturn or are the projects you’re working on mostly new? We are completing only one project that sat in the drawer for two years because of the recession: 200 East 79th Street. All of our current work consists of new projects with existing and new clients. What are the most challenging aspects about working in architecture in NYC? After the long recession we lived through, our clients want to bring properties to market with shorter design schedules.

Morris Adjmi

principal, Morris Adjmi Architects What are you seeing in terms of new residential projects in NYC in the design and planning phase? There is a lot more new development in the pipeline than even a year ago. It was the very top end of the condo development market that started the growth trend we are in now, but we see it trickling down to the middle-income rental market, where relief of demand is most needed. What are the most challenging aspects about working in architecture in NYC? Speed and the need to get things done fast. Developers feel the pressure to get in the ground because competition is heating up. It still takes the same amount of time, though, if not more, to get work approved through the DOB, the Board of Standards and Appeals or the Landmarks Commission. We architects get sort of crunched in the middle of these opposing forces. What’s the job market like these days for new architects? It’s certainly a better time to be entering the job market than at any time in the last five years. What we are going to miss is all the experience that got pushed out or left the profession during the depths of the recession. The architecture, construction and development industries have all woken from a long slumber, and they are all hungry. TRD www.TheRealDeal.com January 2013 79

R ece nt Cl os ed R e nta ls Status

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$18,000

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$37,500

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$18,000

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$35,000

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70 Little West Street

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112 Washington Place

$35,000

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212 East 57th STreet

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$16,000

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$16,000

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$26,500

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$16,000

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$26,000

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25 Central Park West

$16,000

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71 Murray Street

$25,000

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$16,000

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$25,000

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$16,000

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$15,995

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$25,000

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$15,900

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317 East 8th Street

$23,500

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$15,850

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$23,500

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TOWN Residential, LLC • 730 Fifth Avenue, 8th Floor, New York, NY 10019 • Tel: (212) 242-9900 • Fax:(212) 242-9901 • www.townrealestate.com

TRI-STATE BRIEFS WESTCHESTER

County signs agreement to ‘stop the bleeding’ at Rye’s Playland County officials last month announced an agreement for a local nonprofit group to operate the historic Playland Amusement Park in Rye, the Journal News reported. The group, Sustainable Playland, will operate and maintain the county-owned park for 10 years, paying the county $4 million upfront, plus annual payments of up

to $1.2 million. Sustainable Playland’s redevelopment plan for the Playland

park includes scaling back the amusement area and bringing in

private partners to run year-round attractions. The group is also planning a new field house and outdoor fields, a new water zone, restaurants and programming in new public spaces. Westchester County Executive Rob Astorino asked for proposals to revamp the park in 2010, after saying it could never make money under county control. Sustainable’s annual payments to the county, 50 percent of net operating revenue, would be used to pay off Playland’s debt. “This is a deal that stops the financial bleeding of the county,” Astorino said.

The agreement will be signed after it is approved by the Board of Acquisition and Contract.

CONNECTICUT

Danbury’s Lee Farm Corporate Park sells at deep discount After seven months on the market, Lee Farm Corporate Park in Danbury sold last month for $16.9 million, less than half its 2007 sale price, the Danbury NewsTimes reported. A partnership of Summit Development and the Grossman Companies purchased the complex from the overseas investment trust 83 Wooster Heights, which paid $37.5 mil-

lion for it in 2007. The five-story, 216,000-square-foot Class A office complex, built in 1987, is more than 70 percent leased to tenants including GE Capital, PepsiCo and IMS Health. The Danbury commercial real estate market was hit hard by the recession but is slowly rebounding, according to Jeff Dunne, a vice chairman at the Stamford office of CBRE Group, who represented the seller. Office rental rates are typically a third lower in Danbury than the rest of Fairfield County, according to the News-Times. Felix Charney, a principal at Summit, told the paper that he and his partners will launch an aggressive marketing

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Lee Farm Corporate Park

campaign and common-area upgrades to help fill vacant space at the complex. “We’re confident that Lee Farm will attract additional high-quality tenants,” Charney said.

LONG ISLAND

Walt Whitman Shops to get 30 new stores this year The Walt Whitman Shops in Huntington Station will get up to 30 new stores and three new restaurants this year, Newsday reported. Mall owner Simon Property Group has started construction on a major overhaul of the shopping center, which includes a new row of shops and eateries along with a pedestrian walkway. Construction is expected to be completed in stages between August and November, according to Newsday. New restaurants will include Brio Tuscan Grille, P.F. Chang’s, Cups Frozen Yogurt and the upscale burger and wine spot Zinburger. The row will also feature a Brooks Brothers flagship store, and Urban Outfitters, Carhartt and Pottery Barn stores. Inside, spaces occupied by current tenants will be revamped. There will be more parking, new lighting and even a statue of the center’s namesake, poet Walt Whitman. Leasing is ongoing, but other confirmed new stores include C. Wonder, Kate Spade New York, Lululemon, Hugo Boss and Lucky Brand Jeans, according to Newsday. Compiled by Sanna Chu

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

NATIONAL MARKET REPORT

The Holmby Hills home of Casey Kasem

L o s A n g e l e s Radio personality Casey Kasem has listed his Holmby Hills mansion for $42 million, Curbed.com reported. The 12,000-square-foot home, purchased in 1989 for $1.72 million, has 17 bathrooms, a hair salon, an “English-style” library and a heart-shaped pool.

The Seattle skyline Ronald Reagan

Seattle

Houston

Seattle developer R.C. Hedreen has announced plans to build the

The historic Humble Oil Building complex in downtown Hous-

largest convention hotel north of San Francisco, Seattlepi.com re-

ton has been sold for $79.5 million in an off-market transaction,

ported. Set to open in early 2017, the downtown Seattle project

Commercial Property Executive reported. RLJ Lodging Trust, a

will feature 1,500 hotel rooms and 150,000 square feet of meeting

real estate investment trust backed by BET cable network founder

and ballroom space, plus 150 units of affordable housing and some

Robert Johnson, purchased the three-building complex, which in-

40,000 square feet of retail space. The 43-story tower will take

cludes the 1.2 million-square-foot George R. Brown Convention

over a space currently occupied by a Greyhound bus station. Some

Center. RLJ plans to convert a residential tower on the property

97 conventions were unable to meet in Seattle last year due to date

to a 166-room SpringHill Suites hotel. Plans for a 1,000-room

availability or capacity constraints at available venues, according

Marriott Marquis that will connect to the convention center are

to Seattlepi.com.

also in the works. The complex, which housed the original head-

Chicago

quarters of the Humble Oil and Refining Company, is listed on the National Register of Historic Places, and all of its buildings were

Chicago saw an uptick in luxury sales in 2012, including the re-

built before 1940. Construction of the new hotel is expected to be

cord-breaking sale of a $15 million penthouse at Park Tower, the

completed in mid-2015.

Wall Street Journal reported. Chicago saw 713 home sales over $1 million in 2012, according to a Coldwell Banker market report

Las Vegas

cited by the Journal, and the highest number of homes priced over

New home sales in Las Vegas rose 65 percent year-over-year

$5 million since the boom. And current listings on the market in

through December 2012 and home prices were up 15 percent,

the Windy City are setting the price point even higher: A pent-

Business Insider reported, leading some experts to suggest

house at Trump International Hotel and Tower Chicago is cur-

that a new housing bubble may be in the works. In the Las

rently on sale for $32 million, and an estate in Winnetka is listed

Vegas-Paradise metro area, where the median home sale price

for $21.9 million. But Chicago’s luxury market is still not back to

is now $165,000, the spike in prices may be due in part to the

boom-time highs in sales volume, in part because of low inventory

decline of foreclosures since the state of Nevada instituted a

in sought-after areas like Lincoln Park and Gold Coast. Unit sales

foreclosure fraud law in 2011. Las Vegas had 29,454 foreclo-

were down 41 percent in 2012 compared to five years prior, and

sure sales in 2012, down 38 percent from 2011. Developers

dollar volume was down 38 percent. Despite that, the fourth quar-

have also been paying more for land in the area. At the end

ter of 2012 was very busy as highly motivated sellers tried to close

of 2012, land in the Las Vegas area was selling for $175,000

deals prior to Jan. 1 when existing tax cuts were set to expire. One

to $185,000 per acre, Business Insider reported. By February,

such deal, which closed on Dec. 31, was the sale of an 18-room

the price had risen to $250,000 to $275,000 per acre.

lakefront mansion in Winnetka for $12.25 million, one of the single highest-priced residential sales in Chicago-area history. 82 May 2013 www.TheRealDeal.com

Compiled by Evan Bleier

C h i c a g o Despite attempts by preservationists to save the building, a boyhood home of President Ronald Reagan in Hyde Park was demolished last month, CBS reported. The young Reagan lived in the apartment building at 832 East 57th Street with his parents from 1914 to 1915, but spent much of his childhood in Dixon, Ill. The University of Chicago, which now owns the Hyde Park building, said it had no immediate plans to redevelop the property.

Judd Apatow’s new home

Malibu Director Judd Apatow and his wife, actress Leslie Mann, paid $10.82 million for a 2,550-square-foot beachfront house in the exclusive Malibu enclave of Carbon Beach, Realtor.com reported. The four-bedroom, five-bathroom house was once the home of late “Pretty Woman” producer Laura Ziskin.

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ON THE MARKET Eastdil’s Harmon tapped to market Time Warner Center Media giant Time Warner hired Eastdil Secured’s Doug Harmon last month to market its 1.1 million-square-foot Midtown headquarters and determine what it would receive for the building, Reuters reported. The mega-company is reportedly preparing to leave the Time Warner Center or consolidate its more than 4 million square feet of New York City office space. If the company does decide to sell the building, which is located in Columbus Circle, the two-tower complex could command prices of roughly $1,000 per square foot for a total price north of $1 billion, according to the Wall Street Journal. In February, Time Warner had reached out to Eastdil Secured, Jones Lang LaSalle and Studley to aid in the property’s valuation, the Journal reported.

UWS retail condo asking $25M A retail condo located at 380 Columbus Avenue, directly across the street from the Museum of Natural History, is for sale with an ask380 Columbus Avenue ing price of $25 million. Situated between West 78th and 79th streets, the 11,795-square-foot condo is occupied by two eateries, Ocean Grill and Gazala’s, and a nightclub, 78 Below. The hr15890_RELaw_9.5x6.75.pdf

2/26/13

10:45:52 AM

tenants are at the beginning of their respective leases. The condo is on the market for the first time since the building was constructed at the turn of the 20th century. Eastern Consolidated’s David Schechtman, Adelaide Polsinelli, Lipa Lieberman, Abbie Kassin and Gary Meese are marketing the property.

Queens multi-family building on the block A seven-story apartment building at 56-10 94th Street in Queens is on the market with an asking price of $24.5 million. The 102,390-squarefoot elevator building is located between 56-10 94th Street 56th and 57th avenues in the borough’s Elmhurst section. Of the property’s 112 residential units, 12 are studios, 88 are one-bedrooms and 12 are two-bedrooms. The apartments have an average rent per square foot of $19.63, which is approximately 75 percent of market rates, according to the listing. The building has a swimming pool and a 26-car indoor parking garage. Thomas Donovan, Tommy Lin, Eugene Kim and Robert Rappa of Massey Knakal Realty Services are handling the sale.

Brooklyn mixed-use assemblage asking $10M A package of adjacent lots at 1295-1299 Nostrand Av-

Commercial properties recently placed on the market enue and 306-310 Clarkson Avenue in Brooklyn is on the market with an asking price of $10 million. Located on the southeast corner of Nostrand and 1295-1299 Nostrand Avenue Clarkson avenues, the site consists of lots measuring from 3,200 to 20,000 square feet for a total of 36,430 square feet. The properties, zoned for residential or commercial use, have a total buildable square footage of 145,720. CPEX Real Estate’s Brian Leary, Sean Kelly, Matt Dzbanek and Jay Sendogdular are handling the assignment.

East Village apartment building for sale A six-story walk-up building at 228 Avenue B is for sale with an asking price of $8.9 million. Built in 1900, the 12,613-square-foot property has 21 apartments, nine of which are rent stabilized. With an average monthly rent of $1,648, the residential units consist of one three-bedroom duplex with a usable basement, 10 two-bedrooms and 10 one-bedrooms. The building has two ground-floor retail units of 500 square feet each, which are occupied by custom framing shop 567 Framing and money transfer services provider Franklin Check Cashing. Ronald Cohen and Amit Doshi of Besen & Associates are marketing the building. Compiled by Linden Lim

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017187 Real Deal_v2.indd 1

Exactly Right. T

4/29/13 4:37 PM

Office listings

Retail listings

Property information Registration not required

Agorafy is an open platform for organizing and sharing real estate data in New York City. It’s fast. It’s simple. It’s free. Get started today at agorafy.com.

Have questions or want to submit listings? Send them to listings@agorafy.com.

Deal Sheet summary

The Deal Sheet, on pages 88 to 98, covers transactions from 3/11/13 through 4/10/13. Please submit future deals to deals@therealdeal.com.

Sales

Overview

By type

Property sales Deals Dollars

41 $1,054,480,000

Financing Buildings Aggregate value

Development

Hotel

325

Industrial

27.4

Mixed-Use

Mixed-Use Multi-family

Transactions

By dollar volume (in millions) 249.89

17.05

Multi-family

147.82

Office

261.5

Retail

25.82

$47,150,000

Leases Office

Retail

Total

Leases square feet Office

2,126,011

Retail

162,919

Total

2,288,930

Office leases Office leases by industry Industry

Office leases sf by industry Leases

Industry

Advertising & Marketing

Construction

Consulting

Energy

Event Production

Top tenant reps for office leasing by sf

Square feet leased

Tenant representative

Square feet leased

CBRE Group

636,800

22,998

Newmark Grubb Knight Frank

401,020

20,750

Jones Lang LaSalle

367,570

143,564

1,264 25,000

Fashion*

85,015

Financial

Food & Beverage

Health & Beauty

Home Furnishings

Legal

Medical

NGO

Other

Real Estate

Science & Technology

31,472

Adams & Co.

27,750

Abraham + Martin Studley

25,000

139,351

CBC Alliance

21,945

19,800

Rice & Associates

18,297

Centric Real Estate Advisors

11,373

Byrnam Wood

8,000

402,000 10,666

JDF Realty

5,015

Cushman & Wakefield

5,000

2,558

Handler Real Estate

3,867

8,465

The Vortex Group

3,643

148,910

Miyad Realty

3,052

476,361

Vicus Partners

2,558

618,409 900

Retail leases Top tenant reps for leasing by sf

Retail leases by industry

Broker

Discount

20,991

Square feet leased

Retail leases sf by industry

Ripco Real Estate

72,806

Fashion

38,880

VIP Realty

12,000

Financial Services

18,000

Millenium Realty

10,206

Food & Beverage

50,443

NAI Friedland Realty

9,450

Health & Beauty

12,512

Pliskin Realty

7,000

Other

Winick Realty

6,818

Oxford Property Group

3,128

M Properties

2,900

Lee & Associates

2,800

NYCRS

2,200

SRS Real Estate Partners

1,100

Square Foot Realty

686

Newmark Grubb Knight Frank

551

(*includes showroom space)

087 may deal sheet summary se FINAL.indd 1

22,093

www.www.TheRealDeal.com May 2013 87

4/30/13 2:16 PM

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 3/11/13 to 4/10/13. Please submit future deals to deals@therealdeal.com.

Office leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

425 Lexington Ave

595,000

Thacher & Bartlett LLP / L. Miller, K. Rapp, R. Rikhy, CBRE

Hines / Represented in-house

The law firm signed a lease renewal for 26 floors of the 31-story building.

10th Ave and West 30th St

402,000

L’Oreal / n/a

Related Companies; Oxford Properties Group / n/a

The beauty giant signed a lease to be one of the anchor tenants for the South Tower at the Hudson Yards megaproject. The new space will serve as the company’s U.S. headquarters. L’Oreal will be joining luxury leather goods company Coach and software company SAP at the building, which is now over 80 percent leased.

28 and 40 West 23rd St

220,000

AppNexus / M. Weiss, R. Eisenberg, Newmark Grubb Knight Frank

n/a / A. Roos, M. Cohen, Colliers International

The advertising technology firm signed a long-term expansion lease and extension. The tenant originally leased 24,500 square feet around three years ago, then expanded to 90,000 square feet before its latest expansion to 220,000 square feet.

222 Broadway

120,537

WeWork / M. Lapidus, WeWork; S. Black, Jones Lang LaSalle

L&L Holding Company / D. Berkey, A. Wiener, L&L Holding Company

The collaborative workspace provider inked a 16-year lease for another office space, the New York Observer reported. The asking rent was in the mid-$50 range, according to the Observer.

10th Ave and West 30th St

115,000

SAP / n/a

Related Companies; Oxford Properties Group / n/a

The enterprise software company signed a lease to be an anchor tenant for the South Tower at the Hudson Yards megaproject. The tenant will take the top four floors of the building. SAP will be joining luxury leather goods company Coach and beauty giant L’Oreal at the building, which is now over 80 percent leased.

1290 Sixth Ave

105,951

State Street Bank / P. Riguardi, C. Wasserberger, P. Mas, Jones Lang LaSalle

Vornado / Represented in-house

The bank signed a new lease for the entire sixth floor, the New York Post reported. The tenant is relocating from a smaller space at 2 World Financial Center. The company is also vacating the 10th-floor space it had been subleasing at 1290 Sixth Avenue.

1400 Broadway

87,000

Interpublic Group / S. Panzer, R. Romano, Jones Lang LaSalle

W&H Properties / S. Klau, E. Harris, N. Rubin, Newmark Grubb Knight Frank

The advertising and marketing firm signed a new lease.

350 Fifth Ave (Empire State Building)

85,000

Shutterstock / Paul Ippolito, Newmark Grubb Knight Frank

W&H Properties / W. Cohen, R. Kass, Newmark Grubb Knight Frank

The technology firm signed a new lease.

111 Fifth Ave

62,000

Eileen Fisher / D. Falk, D. Levine, A. Cukier, Newmark Grubb Knight Frank

Winter Organization / Represented in-house

The fashion company signed a lease renewal and expanded, the New York Post reported. The tenant is adding 19,000 square feet in the building.

498 Seventh Ave

29,416

Alloy Digital / A. Chudnoff, D. Turkewitz, Jones Lang LaSalle

Liquidnet Holdings / H. Fiddle, J. Mangiacotti, CBRE

The digital media firm signed a six-year sublease for the entire 19th floor, the New York Observer reported.

195 Broadway

26,414

Omnicom / n/a

L&L Holding Co.; Beacon Capital Partners / n/a

The advertising agency signed an expansion lease, the New York Post reported. The asking rent was $47 per square foot, according to the Post. The building is now 100 percent occupied.

462 Broadway

25,000

BGB Communications / Nicholas Farmakis, Studley

Meringoff Properties / Represented in-house

The pharmaceutical and medical advertising firm signed a 10-year lease to relocate and expand its headquarters. The reported asking rent for the topfloor space was $60 per square foot.

639 West 46th St

25,000

Metropolitan Pavilion / J. Belitsky, M. Duncan, Abraham + Martin

MKF Realty / Jesse Rubens, Murray Hill Properties

The event production company signed a lease. The tenant is relocating and expanding from 123 West 18th Street.

125 Broad St

22,000

Loeb Holding Corporation / B. Savitt, Savitt Partners; S. Bogetti, CBRE

Mack-Cali / Mark Ravesloot, CBRE

The financial firm signed a 15-year, 10-month lease for half of the 14th floor, Crain’s reported. The tenant is relocating from 61 Broadway.

512 Seventh Ave

21,945

comiXology / Michael Okun, CBC Alliance

n/a / M. Feigen, M. Dreizen, Newmark Grubb Knight Frank

The digital comics platform signed a lease. The tenant is relocating from a smaller, 7,500-square-foot space at 159 West 25th Street.

350 Hudson St

19,800

PepsiCo / G. Miovski, S. King, CBRE

Trinity Real Estate / J. Pizer, C. Laginestra, Trinity Real Estate

The beverage giant signed a five-year lease on the second floor for its second Manhattan office space, the New York Observer reported. The asking rent was $58 per square foot, according to the Observer.

110 Fifth Ave

17,000

TOWN Residential / Chris Mongeluzo, Newmark Grubb Knight Frank

Rabina Management / Chris Mongeluzo, Newmark Grubb Knight Frank

The real estate brokerage firm signed a lease renewal on the sixth floor, the New York Observer reported.

485 Lexington Ave

14,000

Xerox Corporation / D. Neye, M. Astrachan, Jones Lang LaSalle

Novantas LLC / J. Serko, A. Ross, R. Serko, C&W

The management consulting firm signed a sublease for the entire 22nd floor.

48 West 37th St

13,978

Manhattan Business Interiors / David Levy, Adams & Co.

Forty Eight Thirty Seven Associates / David Levy, Adams & Co.

The general contracting and construction management firm signed a new 10-year lease for 5,296 square feet and renewed its lease for its existing 8,682-square-foot space.

440 Ninth Ave

11,373

Century Management / G. Lorberbaum, S. Fishbone, Centric Real Estate Advisors

Paramount Group / S. Schofel, J. Gosin, H. Houley, Newmark Grubb Knight Frank

The real estate company signed a lease, the New York Post reported. The asking rent was $45 per square foot, according to the paper. The tenant is relocating from 7 Penn Plaza.

100-104 Fifth Ave

10,666

Springs Global / Gil Ohls, Jones Lang LaSalle

n/a / Grant Greenspan, Kaufman Organization

The home furnishings company signed a 10-year lease for office and showroom space. The reported asking rent was $60 per square foot.

519 Eighth Ave

9,020

Legacy Builders / Michael Frantz, Newmark Grubb Knight Frank

n/a / S. Kaufman, B. Raskob, Kaufman Organization

The general contracting and construction management firm signed an 11-year lease. The reported asking rent was $40 per square foot.

660 Madison Ave

8,000

Trevi Health Capital / Gordon Ogden, Byrnam Wood

Safra Real Estate / P. Amrich, N. King, S. Zarba, CBRE

The investment firm signed a lease on the 15th floor, the New York Observer reported. The tenant is relocating from the 33rd floor at 110 East 59th Street.

1350 Sixth Ave

8,000

Sanford & Heisler LLP / R. Emden, G. Linder, Newmark Grubb Knight Frank

SL Green / Represented in-house

The law firm signed a 10-year lease.

231 West 39th St

6,973

Hudson Jeans / James Buslik, Jeff Buslik, Adams & Co.

231/249 West 39 Street Associates / James Buslik, Jeff Buslik, Adams & Co.

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

231 West 39th St

5,521

Hard Tail / n/a

231-249 West 39 Street Associates / James Buslik, Jeff Buslik, Adams & Co.

The sportswear and denim company signed a four-year lease renewal. The reported asking rent was $40 per square foot.

30 West 21st St

5,150

Appco Group / Thomas Jacobs, Rice & Associates

Kimco / Nora Stats, Tarter Stats O’Toole

The sales and marketing firm signed a lease.

225 West 35th St

5,015

3T Health Systems / Gregory Gang, JDF Realty

225 West 35th Street Associates Limited Partnership / n/a

The tenant signed a lease to expand onto another floor.

88 May 2013 www.TheRealDeal.com

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

12 West 27th St

5,000

Trade Desk Inc. / Adam Rappaport, C&W

Magnet Media Inc. / D. Someck, M. Kunikoff, J. Ram, Lee & Associates

The Internet and software company signed a sublease.

259 West 30th St

4,000

Cambridge Leadership Associates / Elizabeth Juviler, Rice & Associates

Two Friends Realty / Joe McLaughlin, Capstone Realty Advisors

The consulting firm signed a lease on the 16th floor.

405 Lexington Ave

3,867

Lewis Baach PLLC Kaufmann Middlemiss / Handler Real Estate Organization

Tishman Speyer / Represented inhouse

The international law firm signed a lease on the 32nd floor.

70 West 40th St

3,746

Lynn/Cahill LLP / Elizabeth Juviler, Rice & Associates

Milltex Distributors / Laura Belt, Widgeon Management Corp.

The law firm signed a lease on the 15th floor.

152 West 57th St

3,643

Nagashima Ohno & Tsunematsu NY LLP / R. Marek, T. Freydberg, The Vortex Group

n/a / Matthew Leon, Newmark Grubb Knight Frank

The law firm signed a 10-year lease renewal for part of the 37th floor.

515 Madison Ave

3,400

Tiger Bay Advisors / Elizabeth Juviler, Rice & Associates

n/a / n/a

The investment management firm signed a lease.

10 West 33rd St

3,163

Royal Glove / David Levy, Adams & Co.

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

The accessories company signed a new nine-year, 10-month lease. The reported asking rent was $43 per square foot.

10 West 33rd St

3,053

Athalon Sportgear Inc. / David Levy, Adams & Co.

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

The accessories company signed a five-year lease renewal. The reported asking rent was $42 per square foot.

111 Broadway

3,052

Perez & Cedeno / M. Rouzenrouch, M. Jotkowitz, Miyad Realty

Capital Properties / B. Gerla, A. Foster, M. Rizzo, S. Spillane, CBRE

The law firm signed a 10-year lease on the seventh floor, the New York Observer reported.

307 Seventh Ave

2,750

The Big Space / J. Belitsky, M. Duncan, Abraham + Martin

n/a / David Berger, Bernstein Real Estate

The consumer experience consultancy signed a new lease.

52 Vanderbilt Ave

2,558

Coalition for Rain Forest Nations / P. Gardiner, A. Stein, Vicus Partners

Brause Realty / Lloyd Desatnick, Jones Lang LaSalle

The nonprofit signed a five-year lease. The tenant is relocating from 370 Lexington Avenue.

2521 Butler Pl (The Bronx)

2,200

Lycatel LLC / S. Kaufman, P. Cokin, NAI Friedland Realty

GLC Properties Inc. / S. Kaufman, P. Cokin, NAI Friedland Realty

The tenant signed an office lease.

831 Third Ave

1,264

EN-Power Group / M. Kabiri, W. Stein, Manhattan Commercial Realty

n/a / Sylvie Shames, Friedland Properties

The energy optimization solutions provider signed a two-year lease with a two-year option on the fourth floor.

132 Delancey St

1,250

American Association of Independent Music / Alex Dominguez, AC Lawrence

132 Delancey Street Realty Corp. / Lior Lev, Spire Group

The organization of independent music labels signed a lease.

140 West 57th St

1,101

Margolin & Pierce / Matthew Kurtzban, Rice & Associates

Feil Organization / Kevin Driscoll, Jeffrey Management

The law firm signed a lease on the seventh floor.

10 West 33rd St

1,090

Summer Rio Corp. / David Levy, Adams & Co.

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

The accessories company signed a lease renewal. The reported asking rent was $42 per square foot.

10 West 33rd St

962

Intercontinental Leathern Industries / David Levy, Adams & Co.

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

The leather goods company signed a lease renewal. The reported asking rent was $42 per square foot.

For more information please visit: Manhattan Showroom 230 5th Ave New York, NY 10001 (212) 213-9350 www.nyslidingdoor.com Office Partitions

Swing Doors

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Room Dividers

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

202 West 40th St

900

Brian Harris, Therapist / Gregory Rogers, Rice & Associates

Argus Realty / Sol Freidman, Argus Realty

The music psychotherapist signed a lease on the fourth floor.

10 West 33rd St

880

OMG Accessories LLC / David Levy, Adams & Co.

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

The accessories company signed a new lease. The reported asking rent was $44 per square foot.

10 West 33rd St

866

Biaggi USA LLC / David Levy, Adams & Co.

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

The luggage and accessories company signed a new lease. The reported asking rent was $44 per square foot.

10 West 33rd St

507

Pure Element Apparel / David Levy, Adams & Co.

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

The apparel company signed a lease renewal. The reported asking rent was $42 per square foot.

Retail leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

1 Fordham Plaza (The Bronx)

30,000

TJ Maxx / Peter Ripka, Ripco Real Estate

n/a / Miles Mahony, Ripco Real Estate

The discount fashion retailer signed a lease for space on the second level.

4515-4529 18th Ave (Brooklyn)

18,000

TD Bank / R. Senior, I. Shabot, Ripco Real Estate

CSS I LLC / R. Senior, I. Shabot, Ripco Real Estate

The bank signed a 20-year ground lease for another location.

1196 Prospect Ave (The Bronx)

12,531

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

Prospect Court Housing LLC / Christina Warner, L & M Equities

The discount retailer signed a lease for another location.

1339 Jerome Ave (The Bronx)

12,000

Antillana Supermarket / Wictor Angelillo, VIP Realty

n/a / G. Dolgin, D. Gourianov, Kalmon Dolgin Affiliates

The supermarket signed a long-term lease.

201 East 61st St

11,000

Texas de Brazil / n/a

Mall Properties / n/a

The Brazilian restaurant signed a lease for its second New York–area location. The company’s original eatery is situated in Yonkers, N.Y.

704 Broadway

10,206

BurgerFi / CBC Alliance, Millenium Realty Group

n/a / Z. Nathan, J. Pennington, Ripco Real Estate

The eatery signed a 10-year lease. The reported asking rent was $175 per square foot.

4225 White Plains Rd (The Bronx)

8,460

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

PBS One LLC / E. Bukai, M. Mahony, R. Senior, Ripco Real Estate

The discount retailer signed a lease for another location.

302 East Fordham Rd (The Bronx)

8,250

City Jeans Premium / Steve Lorenzo, NAI Friedland Realty

East Fordham Real Estate LLC / Steve Lorenzo, NAI Friedland Realty

The denim retailer signed a lease.

168th Pl and Jamaica Ave (Queens)

7,000

AAP / Marvin Hartman, Pliskin Realty

n/a / CPEX Real Estate

The automotive retailer signed a 10-year lease.

400 West 63rd St

4,691

iPlzaza Salon / n/a

n/a / Z. Nathan, J. Pennington, D. Kleiman, Ripco Real Estate

The salon signed a 12-year lease. The reported asking rent was $60 per square foot.

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Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

250 West 57th St

3,797

AT&T Wireless / Steve Baker, Winick Realty

W&H Properties / J. Podell, I. Lerner, C&W

The mobile services provider signed a new lease.

2381 Frederick Douglass Blvd

3,248

Express Drugs and Surgical / n/a

n/a / Z. Nathan, J. Pennington, Ripco Real Estate

The drugstore signed a 10-year lease. The reported asking rent was $45 per square foot.

570 Lexington Ave

3,021

Schnipper’s Quality Kitchen / Steven Baker, Winick Realty

The Feil Organization / Represented in-house

The restaurant signed a long-term lease for another location. The reported asking rent was $300 per square foot.

111 Central Park North

2,851

Punch Fitness / n/a

n/a / Z. Nathan, J. Pennington, B. Cohen, Ripco Real Estate

The fitness studio signed a 10-year lease. The reported asking rent was $60 per square foot.

1148-1150 Second Ave

2,800

The Pleasure Chest Ltd. / Garry Steinberg, Lee & Associates

1150 Second Avenue LLC / J. Gilbert, A. Cuccier, Newmark Grubb Knight Frank

The adult novelty store signed a 10-year lease for its second New York City location. The reported asking rent was $105 per square foot.

340 St. Nicholas Ave

2,684

Unity Yoga / n/a

n/a / Z. Nathan, J. Pennington, Ripco Real Estate

The yoga studio signed a 10-year lease. The reported asking rent was $40 per square foot.

2381 Frederick Douglass Blvd

2,498

Empire Gate Medical Group / Oxford Property Group

n/a / Z. Nathan, J. Pennington, Ripco Real Estate

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

24 West 8th St

2,100

5oz Factory / Z. Nathan, J. Pennington, Ripco Real Estate

n/a / Buchbinder & Warren

The eatery signed a 12-year lease. The reported asking rent was $100 per square foot.

458 Greenwich St

2,000

The Greek / M Properties

n/a / n/a

The Greek restaurant signed a new, long-term lease.

60 West 56th St

1,715

Glaze Teriyaki / Z. Nathan, J. Pennington, Ripco Real Estate

n/a / Zelnik & Company

The restaurant signed a 12-year lease. The reported asking rent was $200 per square foot.

8522 Fifth Ave (Brooklyn)

1,600

Uni K Wax Center / n/a

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

The hair removal salon signed a lease.

342 Lexington Ave

1,400

Kale Health Food / Ravi Idnani, NYCRS

n/a / James Famularo, NYCRS

The restaurant signed a 10-year lease.

96 Third Ave (Brooklyn)

1,350

Trojanowski Liquors / n/a

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

The liquor shop signed a lease.

4030 Broadway

1,200

Dunkin’ Donuts / Steve Lorenzo, NAI Friedland Realty

Woodrow Court Inc. / Gus Perry, Stein-Perry Real Estate

The coffee chain signed a lease.

41 Union Sq

1,100

Liquiteria Juice Bar / Mark Kapnick, SRS Real Estate Partners

Brause Realty / Mark Kapnick, SRS Real Estate Partners

The juice bar signed a 10-year lease.

436 Myrtle Ave (Brooklyn)

950

T-Mobile / n/a

Invesco / R. Condren, K. Triglia, G. Danut, S. Burk, CPEX Real Estate

The mobile services provider signed a lease.

526 Amsterdam Ave

900

Cardeology / n/a

n/a / Z. Nathan, J. Pennington, Ripco Real Estate

The stationery shop signed a 12-year lease. The reported asking rent was $150 per square foot.

663 Franklin Ave (Brooklyn)

900

Lazy Ibis / n/a

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

The tenant leased retail space.

20 John St

900

Dee Mark / M Properties

Malachite Group / Represented inhouse

The Thai restaurant signed a new, long-term lease.

137 First Ave

800

Ivrose Bomba / H. Demetrious, I. Donath, NYCRS

Aro Management / n/a

The wine bar signed a 10-year lease.

503 West 51st St

686

Baire Hair Removal / Aaron Gavios, Square Foot Realty

Clinton Housing Development Company / Howard Aaron, Square Foot Realty

The hair-removal salon signed a seven-year lease with a three-year option. The reported asking rent was $70 per square foot.

277 Bleecker St

630

Studio Manhattan / Ava Kim, Oxford Property Group

277 Bleecker / Steve Rappaport, Sinvin Real Estate

The leather goods store signed a 10-year lease, Crain’s reported. The asking rent was $300 per square foot, according to the publication.

628 10th Ave

600

Marshall / n/a

630 Tenth Avenue LLC / H. Aaron, A. Gavios, Square Foot Realty

The restaurant signed a 10-year lease.

75 Ninth Ave (Chelsea Market)

551

Num Pang / Jay Gilbert, Newmark Grubb Knight Frank

Jamestown Properties / Represented in-house

The Cambodian sandwich shop signed a lease for another location.

729 Eighth Ave

500

Pie Face / Rob Bonicoro, CBRE

Clinton Housing Development / Howard Aaron, Square Foot Realty

The eatery signed a 10-year lease for another location.

Buys Address

Size

Buyer / Representative

Seller / Representative

Notes

700 Eighth Ave

Fee interest in hotel bldg

Deutsche Asset & Wealth Management; David Werner / n/a

Rockpoint Group; Highgate Hotels / n/a

The leased fee interest in the Milford Hotel New York sold for $325 million, Real Estate Weekly reported. The transaction is subject to a new 99-year ground lease, according to the paper.

350 Madison Ave

24-story, 394,000 sf office bldg

RFR Holdings / n/a

Kensico Properties / R. Baxter, J. Caplan, R. Cohen, S. Latham, Jones Lang LaSalle

The property sold for $261.5 million. The building has 70,000 square feet of retail space, which has been tenanted by upscale clothing retailer Paul Stuart since 1938.

250 South St

Development site

Extell Development / n/a

Cherry Street LLC/Park-It Management / n/a

The former site of a Pathmark grocery store sold for $103.4 million, the LoDown NY reported.

300 Livingston St (Brooklyn)

600,000 buildable sf development site

TF Cornerstone / n/a

Thor Equities / Robert Knakal, Massey Knakal

The parking garage and retail property sold for $75 million, Crain’s reported.

58 and 60 East 86th St

Development site

Glenwood Management / n/a

Columbia University Mailman School of Public Health; Morgan Holding Capital / n/a

The adjacent buildings sold for a combined $31 million. The four-story townhouse at 60 East 86th Street sold for $22.2 million and the six-story rental building at 58 East 86th Street sold for $8.8 million.

25 Paidge Ave (Brooklyn)

41,000 sf industrial space

Arc Terminals / n/a

Motiva Enterprises / n/a

The refined petroleum products terminal sold for $27.4 million.

835 Myrtle Ave (Brooklyn)

Development site

Alliance Private Capital Group / n/a

n/a / Kenneth Zakin, Newmark Grubb Knight Frank

The former General Linen Supply & Laundry plant sold for $27 million, the New York Post reported. The site can support a development of 251,505 square feet of residential space and 101,000 square feet of commercial space, according to the Post.

2520 Tilden Ave (Brooklyn)

9-story apt. bldg, 117 units total

United Realty Trust / G. Corbin, A. Doshi, Besen & Associates

Tilden LLC / G. Corbin, A. Doshi, Besen & Associates

The elevator building sold for $22.9 million.

243, 244, 247, 333 and 335 East 33rd St

5 apt. bldgs, 63 units total

n/a / G. Raff, R. Cohen, Besen & Associates

Five on 33rd LLC / G. Raff, R. Cohen, Besen & Associates

The package sold for $20.6 million.

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Buys continued Address

Size

Buyer / Representative

Seller / Representative

Notes

58-60 Ninth Ave

10,839 sf retail bldg

DelShah Capital LLC / n/a

Icon Realty Management / David Schechtman, Eastern Consolidated

The property sold for $18.2 million. Located across the street from an Apple Store, the space is currently home to Pop Burger, which will be closing in the near future.

1423-25 Amsterdam Ave

9-story apt. bldg, 130 units total

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

The property sold for $17 million.

22 East 36th St

10-story, 60,300 sf mixed-use bldg

Infinity Urban Century / n/a

n/a / n/a

The property sold for $12.5 million.

1834 Caton Ave (Brooklyn)

6-story, 93,378 sf apt. bldg, 83 units total

Family investors / Aaron Jungreis, Rosewood Realty

1834 Realty LLC / Aaron Jungreis, Rosewood Realty

The elevator building sold for $11 million. The price represents a gross rent multiple of over 11.

500 Fort Washington Ave

6-story, 44,295 sf apt. bldg, 56 units total

Private investor / V. Sozio, S. Shkury, M. Tortorici, Ariel Property Advisors

The property sold for $8.62 million.

18th Ave and 66th St (Brooklyn)

Retail development site

1031 exchange buyer / Jason Maier, Stan Johnson

n/a / Jason Maier, Stan Johnson

The under-construction retail property 100 percent leased to Bank of America sold for $8.46 million. The development is expected to be completed in the middle of this year. The tenant has signed a new 20-year lease for the space with five five-year renewal options.

539 East 87th St

5-story, 10,068 sf apt. bldg

n/a / n/a

n/a / Thomas Gammino Jr., Massey Knakal

The property sold for $8.05 million, or about $800 per square foot.

6 West 190th St

6-story, 60,000 sf apt. bldg, 57 units total

6 West 190th Street Bronx LLC / Aaron Jungreis, Rosewood Realty

6 West 190 LLC / Aaron Jungreis, Rosewood Realty

The walk-up building sold for $6.4 million. The price represents a gross rent multiple of 7.5.

156-164 Delancey St

1-story retail bldg

Ashkenazy Investments / n/a

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

The property sold for $6 million.

1925 Glenwood Rd (Brooklyn)

Three 4-story apt. bldgs, 59 units total

Family investors / Aaron Jungreis, Rosewood Realty

1925 Realty LLC / Aaron Jungreis, Rosewood Realty

The contiguous buildings sold for $6 million. Also known as 1192, 1198 and 1204 Ocean Avenue, the properties sold for 9.5 times the rent roll.

165 East 71st St

5-story, 4,500 sf multi-family townhouse

Ira Lifshutz / n/a

n/a / G. Garvin, P. Massey, Massey Knakal

The property sold for $5.9 million, or about $1,311 per square foot.

104 Suffolk St

5-story, 10,000 sf apt. bldg

n/a / D. Schlesinger, J. Rosenberg, The Rosemark Group

n/a / M. DeCheser, P. Massey, G. Garvin, Massey Knakal

The property sold for $5.5 million, or $550 per square foot. The price represents a capitalization rate of 4.8 percent.

140 West 238th St (The Bronx)

5-story, 42,525 sf apt. bldg, 45 units total

n/a / n/a

n/a / Karl Brumback, Massey Knakal

The walk-up building sold for $4.35 million, or $102 per square foot.

1104 Manor Ave (The Bronx)

6-story, 50,000 sf apt. bldg, 44 units total

n/a / Aaron Jungreis, Rosewood Realty

1104 Manor Ave LLC / Aaron Jungreis, Rosewood Realty

The elevator building sold for $4.35 million. The price represents a gross rent multiple of 7.

110 West 87th St

5-story multi-family townhouse

n/a / n/a

n/a / H. Oster, J. Nelson, Massey Knakal

The property sold for $3.7 million, or $694 per square foot.

5959 Broadway (The Bronx)

Development site

n/a / V. Sozio, S. Hirschfield, J. Deutch, J. Gold, Ariel Property Advisors

The vacant lot sold for $3.63 million. The site features 40,000 to 80,000 buildable square feet.

1423-25 Amsterdam Avenue (Logan Plaza) New York NY Sold March 2013 I $17,000,000

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Buys continued Address

Size

Buyer / Representative

Seller / Representative

Notes

386 Manhattan Ave

5-story, 10,005 sf apt. bldg, 20 units total

1031 investor / Ryan Perkoski, Rosewood Realty

386 Realty LLC / S. Kooris, M. Kerwin, Rosewood Realty

The walk-up building sold for $3.63 million.

2833 Decatur Ave (The Bronx)

5-story apt. bldg, 37 units total

n/a / Amit Doshi, Besen & Associates

The property sold for $3.38 million.

149-34 35th Ave (Queens)

3-story, 9,000 sf community facility bldg

n/a / n/a

n/a / Stephen Preuss, Massey Knakal

The property sold for $3.1 million, or $344 per square foot.

3506 Newkirk Ave (Brooklyn)

4-story, 26,126 sf apt. bldg, 29 units total

Local investor / Joshua Orlander, GFI Realty

Local investor / Joseph Landau, GFI Realty

The walk-up building sold for $2.61 million. The price represents a gross rent multiple of 9.

125 Madison St

5-story, 6,810 sf apt. bldg, 15 units total

125 Madison Street LLC / A. Shmaruk, M. Sherman, The Manhattes Group

125 Madison Street Realty Corp. / A. Shmaruk, M. Sherman, The Manhattes Group

The property sold for $2.27 million, or about $333 per square foot.

693 Union St (Brooklyn)

4-story apt. bldg, 8 units total

n/a / n/a

n/a / Adam Hess, TerraCRG

The property sold for $2 million, or $400 per square foot. The price represents a capitalization rate of 5.3 percent and a gross rent multiple of 14.

2248 Adam Clayton Powell Blvd

5-story, 9,400 sf apt. bldg

2248 7 Ave, LLC / Darryl White, Cornerstone Property

Okryun Marrero / Darryl White, Cornerstone Property

The property sold for $1.65 million.

2455 Frederick Douglass Blvd

5-story, 8,460 sf apt. bldg

2455 8 Ave LLC / Darryl White, Cornerstone Property

Okryun Marrero / Darryl White, Cornerstone Property

The property sold for $1.65 million.

75 St. Marks Ave (Brooklyn)

3-story, 3,720 sf apt. bldg

Theodore Petroulas / n/a

n/a / TerraCRG

The property sold for $1.64 million, or $441 per square foot.

64-24 Queens Blvd (Queens)

4,000 sf retail bldg

n/a / n/a

n/a / S. Weiner, C. Wong, Greiner-Maltz

The property sold for $1.62 million, or $405 per square foot.

96-25-27 Rockaway Blvd (Queens)

3-story, 8,600 sf mixed-use bldg

n/a / n/a

n/a / Stephen Preuss, Massey Knakal

The property sold for $1.45 million, or $169 per square foot.

313 West 117th St

10,092 buildable sf development site

n/a / n/a

n/a / J. Lipton, H. Oster, Massey Knakal

The property sold for $1.4 million, or $140 per buildable square foot.

1243 Webster Ave (The Bronx)

4-story, 7,420 sf apt. bldg

n/a / n/a

n/a / David Simone, Massey Knakal

The property sold for $1.35 million, or $182 per square foot.

193 Buffalo Ave (Brooklyn)

5-story, 9,100 sf apt. bldg, 10 units total

Local investor / Joseph Landau, GFI Realty

Local investor / Shlomo Antebi, GFI Realty

The property sold for $1.19 million. The price represents a gross rent multiple of 6.5.

457 Decatur St (Brooklyn)

4-story, 9,632 sf apt. bldg

457 Decatur LLC / Michael Guttman, Rosewood Realty

Private investor / Michael Guttman, Rosewood Realty

The walk-up building sold for $1.05 million.

1689 Putnam Ave (Queens)

3-story, 4,400 sf apt. bldg, 2 units total

n/a / n/a

n/a / T. Donovan, S. Preuss, Massey Knakal

The property sold for $1.03 million, or $233 per square foot.

Financing Address

Size

Borrower / Representative

Lender / Representative

Notes

245 East 24th St

162-unit apt. bldg

Tracy Tenants Corp. / n/a

NCB / n/a

A $5.5 million first mortgage and a $500,000 line of credit were arranged for the building.

200 East 78th St

118-unit apt. bldg

200 East 78th Street Owners Corp. / n/a

NCB / n/a

A $4.5 million first mortgage and a $500,000 line of credit were arranged for the building.

63-89 Saunders St (Queens)

173-unit apt. bldg

Saunders Apartments Inc. / n/a

NCB / n/a

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

444 East 84th St

94-unit apt. bldg

East 84th Street Apartments Corp. / n/a

NCB / n/a

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

325 East 77th St

59-unit apt. bldg

325 House Inc. / n/a

NCB / n/a

A $2.9 million first mortgage and a $500,000 line of credit were arranged for the building.

3850 Sedgwick Ave (The Bronx)

122-unit apt. bldg

Mutual Housing Association Inc. / n/a

NCB / n/a

A $2.8 million first mortgage and a $500,000 line of credit were arranged for the building.

118-11 84th Ave (Queens)

118-unit apt. bldg

Georgian House Owners Corp. / n/a

NCB / n/a

A $2.8 million first mortgage and a $500,000 line of credit were arranged for the building.

345 East 77th St

60-unit apt. bldg

345 East 77th Street Owner Inc. / n/a

NCB / n/a

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

51 West 81st St

115-unit apt. bldg

51 West 81st Street Corp. / n/a

NCB / n/a

A $2 million first mortgage and a $1 million line of credit were arranged for the building.

84-19 51st Ave (Queens)

90-unit apt. bldg

Arkansas Owners Corp. / n/a

NCB / n/a

A $2.6 million first mortgage was arranged for the building.

3200 Netherland Ave (The Bronx)

79-unit apt. bldg

Steven Lee House Inc. / n/a

NCB / n/a

A $1.9 million first mortgage and a $500,000 line of credit were arranged for the building.

1155 Ocean Ave (Brooklyn)

59-unit apt. bldg

1155 Ocean Apt. Corp. / n/a

NCB / n/a

A $1.9 million first mortgage and a $500,000 line of credit were arranged for the building.

110-34 73rd Rd (Queens)

65-unit apt. bldg

110-34 73rd Owners Corp. / n/a

NCB / n/a

A $1.9 million first mortgage and a $300,000 line of credit were arranged for the building.

127 West 79th St

123-unit apt. bldg

Clifton House Owners Corp. / n/a

NCB / n/a

A $1 million line of credit and a $1 million third mortgage were arranged for the building.

120-10/12 85th Ave (Queens)

59-unit apt. bldg

120-10-12 85th Avenue Owners Corp. / n/a

NCB / n/a

A $1.3 million first mortgage and a $350,000 line of credit were arranged for the building.

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Other Deals Office investor pays $250 million for Nassi’s 315 Park Avenue South San Francisco–based Spear Street Capital paid around $250 million to BCN Development for a prewar Midtown South office tower at 315 Park Avenue South, the New York Post reported last month. This is the office investor’s first New York City buy. BCN — run by father-and-son duo Bijon and Craig Nassi — bought the 20-story, 356,000-squarefoot building located between 23rd and 24th streets for $265 million in 2007. In August 2012, after being delinquent on the $219 million building loan, the property was at risk of foreclosure, as The Real Deal reported. In December of the same year, the debt was sold to SL Green Realty for $218 million in a deal that was arranged by Eastdil Secured’s Douglas Harmon and Adam Spies. (The deal was announced after the deadline for the Deal Sheet.)

Law firm renews 200,000-square-foot lease at 1133 Sixth Avenue Law firm Patterson Belknap has renewed its lease for 200,000 square feet at 1133 Sixth Avenue for 20 years, Crain’s reported. The firm’s current lease, the building’s largest, had been slated to expire in December 2014. The building’s landlord the Durst Organization would have been left with vacancies for two major blocks of space at the property if Patterson had opted to move from floors 18 through 26. Another large tenant, the Internal Revenue Service, will leave its nine-floor space next year. Studley executive vice president Ira Schuman brokered the deal. (The deal was announced after the deadline for the Deal Sheet.)

LinkedIn expands at Empire State Building Internet behemoth LinkedIn has expanded its footprint inside the Empire State Building, the New York Observer reported. The site signed a full-floor deal encompassing 31,196 square feet, which brings its total presence in the landmark tower to 109,719 square feet. A CBRE team led by Sacha Zarba represented LinkedIn in the deal; Newmark Grubb Knight Frank’s William Cohen and Ryan Kass represented Malkin Holdings, the landlord. LinkedIn first took 31,742 square feet on the 25th floor in 2011. Since that time, it has expanded to the 23rd, 24th and 39th floors. The company expanded to the 23rd floor last November, as previously reported. (The deal was announced after the deadline for the Deal Sheet.)

A West Village “Fantasy” fades after Jackson Group’s $21 million retail buy In a pair of unrelated transactions, the Midtown-based Jackson Group paid a total of $20.6 million for two retail properties in the West Village that are currently occupied by sex shops. The company, led by Ike Chehebar and his brothers Elliot and Gabriel, expects to replace the tenants with more mainstream retailers. Jackson purchased the retail condo at the base of 333 Sixth Avenue, a residential building at West 4th Street, for $16.5 million, in an offmarket deal that closed on April 10, Ike Chehebar told The Real Deal. The firm purchased the one-story building 192 Seventh Avenue South, at West 11th Street, for $4.1 million on Feb. 7, city records show. That deal was broadly marketed. (The deal was announced after the deadline for the Deal Sheet.)

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Trump Organization secures financial firm at 40 Wall Street Donald Trump’s Trump Organization has signed financial services firm First Investors Management Company to its 40 Wall Street, the New York Observer reported. First Investors will take a 36,490-square-foot space, moving from its current offices at 110 Wall Street. The asking rent for the space was $35 per square foot. The Trump Organization was represented by Cushman & Wakefield’s Jeffrey Lichtenberg and Jared Horowitz, while Marc Shapses of Studley represented the tenant. “We’ve leased over 600,000 square feet since taking over the building five years ago,” Lichtenberg told the Observer. Other tenants include Weidlinger Associates, an engineering firm, Duane Reade and private school Green Ivy. (The deal was announced after the deadline for the Deal Sheet.)

Air India takes new space at old GE building Indian national carrier Air India has struck a 15-year deal for space at the Feil Organization’s 570 Lexington Avenue — better known as the old General Electric Building — moving one floor down from its current space, Crain’s reported. The airline — which shuttles passengers nonstop between New York and Delhi — inked a deal for 7,846 square feet of space at the 50-story, 460,000-square-foot property. The deal will reduce Air India’s presence by 20 percent in the building, yet allow them to maintain the same staff due to a more efficient floor layout, Newmark Grubb Knight Frank’s Robert Eisenberg, who represented the airline, told Crain’s. (The deal was announced after the deadline for the Deal Sheet.) TRD

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DEVELOPMENT UPDATES CONSTRUCTION UPDATE

Midtown East

Halcyon 305 East 51st Street Construction has begun on the 32-story, 123-unit condominium tower, developed by HFZ Capital Group and CIM Group and designed by SLCE Architects. Sales of the one-, two-, three- and four-bedroom residences will launch later this year, with closings expected in late 2014. Corcoran Sunshine Marketing Group is the agent. Contact: www.halcyonny.com. RENTAL UPDATE

Long Island City Gantry Park Landing 50-01 Second Street The 12-story, 199-unit rental building, developed by the Lightstone Group, will begin leasing this summer. Designed by Mark Zeff, the building will offer one-, two- and three-bedroom residences. Building amenities include a full-time doorman, fitness center with yoga room, gaming lounge, courtyard, roof deck and bike storage. Aptsandlofts.com is the agent. Contact: www.gantryparklanding.com.

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35XV 35 West 15th Street The 24-story, 55-unit condominium, developed by Alchemy Properties, is now 40 percent sold. The 35XV one- to four-bedroom units range in size from 865 to 3,831 square feet and range in price from $1.57 to $11.5 million. Building amenities include a full-time doorman, residents’ lounge, wine cellar, outdoor terrace, fitness center and children’s playroom. Contact: www.35xv.com.

Park Slope 397 First Street The seven-unit boutique condominium, developed by East River Partners, is now sold out. The building’s two-bedroom units

range in price from $850,000 to $1.3 million and in size from 1,000 to 2,000 square feet. Building amenities include video intercom security and private storage units. Corcoran Sunshine Marketing is the agent. Contact: www.397first.com. 371 Sixth Avenue Sales have launched at the four-unit boutique condominium, developed by East River Partners. Available apartments include a two-bedroom, 2,069-square-foot 371 Sixth Avenue duplex with a private outdoor garden; 1,047-square-foot two-bedroom units; and a 1,076-squarefoot, two-bedroom penthouse with a private rooftop terrace. Prices range from $1.05 to $1.8 million. Amenities include video intercom systems. Contact: www.371sixth.com. Park Union 910 Union Street The seven-story, 15-unit condominium, developed by American Development Group, is now 85 percent sold. The two remaining units include a 1,200-square-foot, two-bedroom unit priced at $1.5 million, and a 1,505-square-foot, three-bedroom home for $2.15 million. Building amenities include an attended lobby, on-call superintendent, common roof terrace, playroom, fitness center and bike storage. Halstead Property Development Marketing is the agent. Contact: www.parkunionps.com.

Harlem Park Lane 118 West 112th Street The six-story, 24-unit condo conversion, developed by Rodney Propp and Joseph Tahl of Tahl Propp Equities, is now sold out. The one-, two- and three-bedroom units range in price from $310,000 to $649,000 and in size from 576 to 1,037 square feet. Building amenities include a fitness room, patio, children’s playground, bike room, and private storage. Warburg Realty is the agent. Contact: www.warburgrealty.com.

Financial District 20 Pine: The Collection 20 Pine Street The 38-story, 408-unit condo conversion, developed by Africa Israel USA, is now sold out. The building has studios and one-, two-, three- and four-bedroom units, ranging in size from 656 to 1,387 square feet and in price from $595,000 to $3.54 million. Building amenities include a pool, terrace, fitness center, library lounge, billiards room and golf simulation room. Warburg Realty is the agent. Contact: www.20pine.com. Compiled by Andrea Cetra

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Downtown Brooklyn $600,000 110 Livingston Street, Apt.7F

One-bedroom, one-bath, 760-square-foot unit in a prewar elevator condo conversion; apartment has central air, washer/dryer; building has full-time doorman, 24-hour concierge, live-in super, fitness center, roof deck and garage; common charges $418 per month; taxes $69 per month; asking price $625,000; eight weeks on the market. (Brokers: Angelo Rodriguez, NY Casa Group; Rory Bolger, Citi Habitats)

Upper East Side $4.31 million 200 East 66th Street, Apt. E1104

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“The buyers were renting [a different apartment] from an owner in the building. They fell in love with Manhattan House and wanted to make this their permanent home. But it took them a full year to decide on the perfect unit. They also had a lease on the apartment they were renting. They didn’t need to use a broker because they knew what they were looking for.” Tricia Hayes Cole, Corcoran Sunshine

“The buyer is originally from Brooklyn but was living in California for the last several years and is moving back to New York to be closer to his family. We looked at about a half-dozen other apartments, mainly in the Financial District, before we decided to take a look in Brooklyn. The location of the building — right across from Borough Hall with easy access to several subway lines — was a draw because it is among the best areas for transportation in Brooklyn. The buyer also liked the fact that the building is able to command premium rents, a big plus if he ever chooses to use the condo as an investment property. There were heavy negotiations and we were in a bidding war. We were able to beat an all-cash buyer because the terms of our offer were better — but it took a lot of negotiation. At times things got a little intense. A big issue was that the first bank decided that they weren’t going to loan any more to the building, and finding an alternative lender put a huge delay on the process. The deal was touch-and-go at many points. Holding it together and keeping the buyer calm and comfortable was often a challenge. Buying an apartment is never an easy process, but my client was a trooper.” Rory Bolger, Citi Habitats

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kitchen, custom crown moldings, white oak floors and two balconies; building has fulltime doormen, on-site valet parking, fitness and yoga center with spa services, and children’s playroom; common charges $2,322 per month, taxes $1,854 per month; asking price $4.4 million; 27 weeks on the market. (Broker: Tricia Hayes Cole, Corcoran Sunshine Marketing Group)

Three-bedroom, three-bath, 2,588-squarefoot unit in a postwar condo conversion, Manhattan House; apartment has open

Upper West Side $600,000 749 West End Avenue, Apt. 1B

Two-bedroom, one-bath, 700-squarefoot co-op unit in a prewar elevator building; apartment has high ceilings, marble baths, hardwood floors and home office; maintenance $914 per month; asking price $599,999; one week on the market. (Brokers: Lydia Sussek, the Corcoran Group; Marco Lombardini, Bond New York) “My clients, [standup comedian and rabbi Bob Alper] and his wife, mainly live in Vermont, but wanted a pied-à-terre close to their daughter, who lives in the 90s off Broadway. We viewed many properties listed at up to $1.5 million, and thought this place was a steal. The kitchen needs some renovation, but as a pied-à-terre, it fit all of their requirements. We made an offer [of all cash at the asking price] within 24 hours of viewing the apartment, but there were multiple offers higher than ours. It was tense for a few days with a lot of back and forth. We had to close fast because the sellers were getting divorced. From signed contracts to close, the deal took about five weeks to do. Board approval was required, and since my client is a comedian, he nailed it in 30 minutes.” Marco Lombardini, Bond New York

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Closed deals

from page 44

Frederick Peters, president of Warburg Realty, said his company tries to sell residential properties in a wide range of prices as a way to create stability for the firm. He said he prefers that strategy over tapping into the rental market. “We don’t have that kind of [rental] hedge. [So] we have made a strategic decision that we want to be a multi-market player,” Peters said. (The StreetEasy figures showed that Warburg closed $323.5 million in deals above $1 million in 2012, though the company claimed to have closed $417.9 million.)

mand those prices,” she said. But again, Corcoran led on the Lower East Side and East Village, with sales in 11 of the three dozen properties. On the slow-moving Far West Side, Corcoran and BHS were particularly active in the two dozen buildings that had closed deals above $1 million. While most of the firms had a near balance between the closed deals on the East Side and the West Side, Stribling had about three-dozen sales west of Central Park compared with more than 60 east of the park.

Geography juggling

Productivity prizes

Most of the firms showed a surprisingly balanced neighborhood distribution of deals, but there were some anomalies. For example, there were three popular residential neighborhoods in Manhattan that had surprisingly few sales above $1 million recorded by StreetEasy. The Lower East Side and the East Village had only about three dozen such residential property sales in 2012. Also, a vast swath of the West Side, between 34th and 55th streets and Sixth Avenue and the Hudson River, spanning more than 120 city blocks, had sales above $1 million in fewer than two dozen buildings, although some buildings had multiple sales closed by a variety of brokerages, such as the Orion at 350 West 42nd Street. In contrast, in one 28-block area between 79th and 86th streets, and Third and Fifth avenues, there were sales above $1 million in approximately 80 buildings. Song attributed the slow transaction volume in the Downtown East Side neighborhoods to the lack of available for-sale units in 2012 (see related story on page 56). “The Lower East Side and East Village neighborhoods don’t have as much product as other areas that would com-

During interviews with TRD, firm executives stressed the importance of agent productivity — a strong indicator for how much revenue agents generate for themselves and their firms. TRD calculated the annual dollar volume by agent to get a sense of who performed best by that metric. However, there are some caveats, most notably that some firms have significant numbers of rental brokers, or brokers who focus heavily on rentals in addition to doing some sales. For consistency, TRD tallied the figures using the agent counts published in its 2012 top residential brokerage ranking. In addition, some company executives argued that the rankings don’t provide a full picture of their 2012 closed deal volume. They said the data should have included deals below $1 million, which accounted for more than half the deal volume in Manhattan, as well as buyer-side representation. Shaun Osher, CEO of CORE, said his company’s deals are typically split equally in representation. (StreetEasy figures showed that the firm closed $148.1 million in 2012 in deals above $1 million, though the company claimed to

have done $165.5 million.) “We generally have a balanced representation between buyers and sellers,” Osher said, noting that his firm didn’t get credit for representing the buyer of the $25 million Rothschild Mansion at 41 East 70th Street. Meanwhile, data for Nest Seekers International showed that the firm closed $81.8 million in deals, while revealing that Keller Williams NYC closed $69.5 million and Kleier Residential closed $67 million. (Those firms claimed $100 million, $86.1 million and $82.4 million respectively.) But it was Leslie J. Garfield, which ranked No. 1 on TRD’s boutique survey of listings this year (see related story on page 43), that was far and away the most productive firm by agent. The company, led by Jed Garfield, had just eight brokers in 2012, and successfully stuck with its niche strategy of selling townhouses. That strategy yielded the highest sales volume per agent of nearly $9 million — almost twice any other firm. “You can’t be all things to all people,” Garfield said. “You want to try and do one thing better.” BHS was the second-most productive firm at $4.8 million annually per agent, while Sotheby’s clocked in third, at $4.2 million. Corcoran, meanwhile, had an average of $2.8 million per agent, while Douglas Elliman, which has a robust rental business that reduces the firm’s productivity-per-broker figure, came in at $1.6 million per agent. Liebman said her firm’s position shows that her agents are active. “We are known as a pretty tough company. If [agents] are not making their numbers we tend to replace them. This is not a place to park your license and just hang out,” Liebman said. TRD

Global from page 54 lems, Daniels said that those issues are mostly contained to areas around the border, and “the situation in the Mexican economy is strong.” “All of the macroeconomic indicators have been more positive each day,” he said. “The political environment has become very stabilized.… That leads to greater confidence by investors looking southwards to Mexico.” As in all of the recently surging countries, macroeconomic conditions, such as an emerging middle class and an increasingly younger population, have also sparked a growing consumer appetite, Daniels said. That has sent investor interest soaring and helped fuel hefty returns. A report about Mexico City’s office market compiled by CBRE Mexico said in the next three years over 3.12 million square feet of office space will come on the market. While Slim’s various companies are investing $1.4 billion into a rundown section of Mexico City — with plans to bring housing, office, movie theaters and a museum — most U.S. investors are sticking to more tested locations. In December, Joe Sitt’s Thor Equities created Thor Urbana Capital — a joint venture with Mexico City–based real estate developer GFa Grupo Inmobiliario — to invest in Mexico. With plans to spend at least $500 million, the new venture’s first project includes developing a full block of high-end retail along the popular tourist strip of Quinta Avenida in Playa del Carmen. While Thor Equities did not respond to requests for comment, its website notes that it already has three other retail developments in the works in the area. And like Thor, many entities are forming joint ventures to help break into the Mexican market. “There are barriers to entry including [lack of ] rela-

104 May 2013 www.TheRealDeal.com

tionships, knowledge and local market best practices,” Daniels explained. Other American private equity firms have also increased their activity in the last year or so in Mexico. For example, in March 2012, Denver-based private equity firm Black Creek Group closed on a nearly $400 million fund that will reportedly invest in retail assets.

United Arab Emirates

nce a safe haven for investors, the United Arab Emirates took a dramatic nosedive during the recession, when construction halted. Only recently have those pre-recession projects come out of mothballs. That has drawn international investors to Dubai and Abu Dhabi — two areas where American investors see financial potential. “Abu Dhabi is one of the fastest growing real estate markets in the Middle East region,” Craig Plumb, head of research for the Middle East and North America at JLL, said via email. “It has benefitted from political stability during the Arab Spring, and from continued government investment in infrastructure and real estate,” he said. A first-quarter report from JLL noted that the Dubai market is continuing to experience higher levels of residential sales than the global market, which it called an indication that the residential market there is beginning to “overheat.” Indeed, a 2012 Colliers fourth-quarter report on Dubai showed that while prices are low compared to what real estate players are used to in New York, they are continuing to increase. The average price per square foot for residential property in Dubai was $308 in 2012’s fourth quarter

versus $302 in the third quarter. (By comparison, the average price per square foot for a Manhattan apartment was $1,103 in 2013’s first quarter, according to Douglas Elliman.) The JLL report also noted that a number of new retail projects have been announced in Dubai recently. In October 2011, Toronto-based Brookfield Asset Management announced that it would start a $1 billion fund called the Investment Corporation of Dubai. ICD functions as an investment arm of the Dubai government, which holds a stake in more than 30 Dubai companies, including some of the largest real estate companies in the region. Meanwhile, in December, Gulf Related — a partnership between Related and Gulf Capital, one of the Middle East’s leading alternative asset management firms — purchased four plots of land that it will develop into a 3.1 million-square-foot, mixed-use luxury retail complex called Sowwah Central in Abu Dhabi. The project, which is expected to open in 2017, will include 350 fashion retailers and two 400,000-squarefoot luxury residential and hotel towers. The partnership’s neighboring Galleria — which is already fully leased to luxury retailers such as Louis Vuitton, Cartier, Prada and Gucci — is slated to be done later this year. Gulf Related also has four commercial towers, including two hotels, on Al Maryah Island. Ken Himmel, the CEO of Related Urban, told TRD the returns are high for the Sowwah Central project, which he described as high-risk. He did not specify the exact returns Related expected, but said: “There’s lots of risks we’re not accustomed to in the U.S., so the returns need to be higher.” TRD

www.TheRealDeal.com January 2012 00

Hedge funds

from page 18

“I would say 2012 was the year it really took off,” Blomquist said. “In 2011 you had some of the really early players getting in, but the hedge fund–type, Wall Street–backed money didn’t really jump in until 2012.” The strategy has exploded since then, with private equity giant the Blackstone Group reportedly spending $3.5 billion on 20,000 single-family houses and Thomas Barrack’s Colony Capital raising $2.2 billion. While most of the groups buying individual houses are private entities, some have now announced plans to go public, creating single-family REITs. Due to interest from these investors, vast amounts of inventory have been absorbed in markets like Orlando, where investors over the last 12 months “bought up all the cheap stuff,” said Hinricher. Jon Grabowski, president of Precise Associates Inc., a Detroit-based investor that purchases houses and rents them out, said he and other investors have begun considering acquisitions in the Northeast, including Baltimore and Philadelphia. Home prices are still too high in New York, he said, but that could change. “The model makes sense in the Northeast, and it’s a completely untapped market, which is attractive to us,” he said. Some investors have already dipped their toes in the water, purchasing distressed single-family homes in the New York area. RealtyTrac identified at least 12 investor entities that included single-family homes in New York State among the large numbers of foreclosed properties they purchased in 2012. For example, a California-based entity called Lvs Title Trust I last year purchased seven foreclosed single-family homes in New York, including one in Brooklyn, one in Staten Island and one in Suffolk County. That was alongside some 120 other homes it bought nationwide. So far in 2013, the entity has purchased three single-family homes in New York State, including one in Brooklyn. Meanwhile, an entity called

Gecko Realty bought five foreclosed single-family homes in New York State — including one in the Bronx, two on Long Island and two in the Hamptons — in addition to around 20 other properties it purchased across the country. Of course, not all of these are institutional investors — some are likely smaller companies or property flippers. For example, as The Real Deal has reported, Retained Realty is a company affiliated with Howard Milstein’s Midtown-based Emigrant Savings Bank that specializes in buying distressed properties and quickly selling them for a profit. According to RealtyTrac, Retained and associated entities purchased 29 foreclosed single-family homes in New York in 2012, including four in Queens and 12 in the Hamptons. And Blomquist said huge players like Blackstone don’t seem to be purchasing large numbers of single-family homes in New York — at least not yet. That’s partly because there simply aren’t enough distressed properties available to make it worth their while. Still, some large players want to diversify and provide investors with a “blended return” by buying a few single-family homes in the New York area, Hinricher said. And experts said interest in New York is growing, especially as more foreclosures are coming down the pike. New York, like Florida, “has a very lengthy foreclosure process,” Blomquist said. “It’s just taking longer for some of the foreclosures to come through the pipeline. So we believe there’s going to be more opportunity to buy at the foreclosure auction in New York than last year.” A market like Queens, which has seen more foreclosures than other areas of New York City but where rents remain high, would make sense for institutional investors who want to buy up single-family homes, he said. Some investor groups are even buying individual apartments in areas of Upper Manhattan, Hinricher added, where new big-box stores and major infrastructure investments like Columbia’s expansion are attracting institutional money.

Hedge funds + Hamptons

success this year in part to its strong ties to international buyers. “We have remained small in size, but the total volume of our deals is increasing tremendously because of the fact that we have a huge global reach of clients,” Berk explained. She added that the firm has worked as the buyer’s broker in sought-after developments, such as 432 Park Avenue. “It’s been a good year [for] selling new [construction] product,” Berk said. “We find our clients are seeking new apartments that will become available in two or three years. By the time these apartments [are ready], the return on their deposit is going to be very significant.” Berk said she only anticipates the market getting busier as more international clients seek out high-end real estate in Manhattan. Of course, that depends on whether the supply of Manhattan residential properties gets boosted.

sented the buyer of a $12.9 million apartment at 823 Park Avenue. While in the past, the firm’s client base was generally split evenly between buyers and sellers, she said that’s recently shifted to about 70 percent buyers and 30 percent sellers. “People wanted to buy first, then put their homes on the market,” she said. “When the market has a scarcity of product, they’re afraid to sell first. They’re afraid they’ll sell and be homeless.” She noted that Kleier Residential also listed several multimillion dollar properties in early April after TRD’s data was collected — such as a $3.5 million unit at 55 East End Avenue — to coincide with families returning to New York from spring vacation. As for Fox Residential, Fox said she’s not concerned about a drop in listings to $64.4 million, down 24 percent from $84.5 million last year. “I never sweat it when we’re down a little bit because I know we always make it up,” she said. Fox recently sold a $21 million penthouse duplex listing at 733 Park Avenue. The eight-year-old brokerage Platinum Properties also saw a drop in listing-dollar volume, from $20.3 million last year to $13.4 million. And Elegran Realty entered the fray this year with seven listings worth $16.8 million. Michael Rossi, cofounder of the five-year-old firm, attributed its “under-the-radar success” to its out-of-the-box approach. For one thing, all of the firm’s 38 agents are new to real estate. “None of us came from another firm,” Rossi said. “We’re really trying to create something different here.” TRD

Now that hedge funds and other players have gotten a taste of the single-family market, sources say they expect them to expand into other sectors of real estate. Already, “hedge funds are adding Hamptons properties and commercial properties to their portfolios,” said Ernie Cervi, executive managing director in Bridgehampton for the Corcoran Group. He declined to give more details due to client confidentiality, but said funds are investing in a range of East End properties, from those that “can be developed and resold” to longer-term investments, “from raw land to commercial properties.” One reason for the interest, he said, is that commercial spaces in the wealthy Hamptons are few and far between. “Given the limited amount of commercial space in each hamlet, one might think that a commercial building in an exclusive resort town can only become a trophy property and increase in value over time,” he said. Michael Rossi, who managed a trading desk for a boutique hedge fund before cofounding the Manhattan-based residential brokerage Elegran Real Estate, agreed. “Whenever there’s some type of weakness in any market, hedge funds will move into that marketplace,” said Rossi. Whether it’s commercial properties or single-family homes, real estate brokers may not realize that their buyer is a hedge fund. Tony Cerio, a Brown Harris Stevens broker who has several commercial properties for sale in the Hamptons, said buyers rarely give details about the identity of the investors in a deal. “We have groups that look at them, whether hedge funds or not — we don’t know,” said Cerio, who is listing Inlet Seafood in Montauk for $21 million. “But they don’t come right up to you and say, ‘We’re a hedge fund buying.’ They never let you know that.” TRD

Boutiques from page 43 husband, Mark Consuelos. Modlin is also listing a townhouse at 19 East 70th Street for $38 million. The Italian Renaissance mansion, formerly home of the Knoedler Gallery, was not included in TRD’s rankings because it’s classified as a multifamily building, though Modlin said it is being marketed as a single-family home. Another firm that jumped on this year’s ranking was Kaiser’s Key-Ventures, which took the No. 3 spot, up from No. 7 last year. It had seven exclusive listings for a total of $79.7 million. That’s significantly more than its $45.7 million total for last year, despite the fact that the firm had a higher number of exclusives — 11 — last year. Kaiser, who founded the firm 47 years ago, said he’s used to dealing with a shortage of listings. “There’s always a lack of inventory for the best things in the best buildings,” he said. Kaiser said his niche is working discreetly with high-end clients and celebrities who don’t like publicity. “We do very well, in a low-key way,” he said. And he’s not showing signs of slowing down. Even as he approached his fifth decade running Key-Ventures, Kaiser said he’s nowhere near retirement. “As long as I’m alive, we’ll go on,” he said. Meanwhile, the 13-agent firm Mercedes/Berk jumped to No. 5 in the rankings this year, up from No. 10 last year, with its listing volume increasing to $38.2 million year-over-year from $17.7 million, TRD’s data shows. While the firm keeps a relatively low profile, it’s known for its high-end listings in buildings such as 15 Central Park West. Firm principal Noel Berk attributed the company’s 106 May 2013 www.TheRealDeal.com

Inventory squeeze

Some firms’ results were concrete proof that the inventory squeeze may be most disproportionally felt in the boutique brokerage world, where those one or two high-priced listings can make a huge difference. Kleier Residential, Fox Residential and Platinum Properties all saw the dollar amount of their exclusive listings drop this past year. Kleier’s ranking dropped from No. 3 to No. 6, TRD’s data shows, and its dollar volume of listings fell from $113.2 million to $37.4 million year-over-year. But firm head Michele Kleier said with listings scarce in the current market, she’s been representing more buyers than usual. For example, she said, in February she repre-

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Mid-size firms

from page 42

burg significantly more than its current total of 126 agents. “I’ve made a decision about the size that I wanted to maintain for the firm because I want to make sure our broker-to-manager ratio is always small enough so agents can always get the training and support and feedback that they need,” Peters said. Meanwhile, the 62-agent brokerage MNS is expanding its reach. The firm — which was formed in 2011 as a merger between the Developers Group and the Real Estate Group New York — recently opened a new Williamsburg office at the Edge, which the firm has been marketing. The firm has two other offices in Manhattan. (Only Manhattan agents and listings were included in this ranking.) “We have a good story in [Williamsburg],” MNS CEO Andrew Barrocas said. “We have a high concentration of apartments coming on the market and more condo sales than any other company out there in the Williamsburg market.” While the firm is marketing a number of new rental and condo developments in the outer boroughs, “we did do a lot of business in the Manhattan market” this year, Barrocas said. For example, the firm is marketing the new development condo 2280 Frederick Douglass Boulevard in Harlem. MNS stayed mostly consistent in terms of Manhattan dollar volume of listings, TRD found, increasing to $27.4 million in total dollar volume of listings from $27.1 million year-over-year. (Like CORE, MNS was also on the top boutiques list last year.) Like many others, Barrocas attributed the lack of substantial growth to the work MNS has been doing with buyers as well as sellers (see related story on page 16). “There are probably 30 buyers to every one apartment that’s out there,” Barrocas said. “A lot of what we do work on is new developments and there were periods where there weren’t any new projects being planned.” Another firm, 55-agent DJK Residential, is also shifting its focus. The firm came in at No. 7 with $13.9 million in Manhattan listings. With listings few and far between in Manhattan, the

firm has been doing a lot of work in New Jersey, through its office in Nutley, according to Phyllis Pezenik, the company’s vice president of brokerage services. “With the market being tight and exclusives being gold, everyone’s looking for the bigger properties and they’re scarce,” she said. “But short of building them, we’re trying to find them wherever we can.” The fifth-ranked firm, 80-agent Fenwick Keats, founded in 1989, had $44.2 million in sales listing volume for 38 listings this year. (Its most expensive listing was a $19.95 million Upper West Side townhouse at 47 West 70th Street.) The firm, previously called Fenwick Keats Goodstein, bought out Goodstein Management in late 2010. Following the split, it moved out of its Downtown office at 45 Seventh Avenue and into new headquarters at 419 Park Avenue South. In addition to its headquarters, it has an office Downtown at 45 Seventh Avenue and one on the Upper West Side at 2244 Broadway. “We adhere to the basics and we are very consistent and steady, so our agents are really trained to deal with all markets and deliver with both our buyers and our sellers,” said Kinnaird Fox, Fenwick’s director of development.

Not mid-size for long Some firms that are currently mid-size don’t plan to stay that way. Keller Williams NYC — the Texas-based firm, which opened a Manhattan franchise in 2011 — hopes to grow to 750 Manhattan agents in the next three years, according to Eric Barron, Keller Williams NYC’s CEO. (The firm was founded by powerbroker Illan Bracha, who is still at the helm as the firm’s chairman.) TRD’s mid-March tally found 240 agents listed on the firm’s website. Barron said Keller Williams NYC also hopes to open four more offices across the city — on the Upper East and Upper West sides and two Downtown — in the next three years. The firm currently has one office, at 425 Park Avenue. Growing the number of agents is crucial to Keller Wil-

liams’ unusual profit-sharing model: Half of Keller Williams’ annual profits are paid out to brokers who have recruited other agents. But Barron said he’s not daunted by the fact that the firm has a long way to go. “We’re building the core and the foundation first and then we’re looking to expand,” he said. The firm’s visibility may get a boost now that a Keller Williams broker, Luis Ortiz, is joining the cast of Bravo’s “Million Dollar Listing New York.” The season premiere of the series airs this month. Keller Williams hired Ortiz from real estate brokerage Synergy NYC this past year. Barron said he was initially concerned about how Ortiz would be portrayed on the show, but is so far happy with how it’s shaping up. “How can you argue with the name Keller Williams New York City being on television six times a week?” he said. Another new firm, Blu Realty, clocked in at No. 4 on the list with 28 exclusive sales listings worth $80.5 million. Blu was founded in 2011 by five former Nest Seekers International brokers. According to TRD’s tally, Blu had 56 agents as of mid-March. But firm co-owner David Tobon disputed that, saying the company has 66. He said the firm aims to have 100 agents by the end of the year to fill two new offices it’s looking to open — one Downtown and another on the Upper East Side. (The company currently has two offices, its headquarters at 1674 Broadway, and an Upper West Side outpost at 120 Riverside Boulevard.) Tobon attributed the firm’s growing business to an increase in international clientele. “We’ve gotten a lot of international clientele in the last year,” he said. “That’s where we’ve grown in sales.” He said Blu’s increase of international clients has come primarily from the firm’s newly formed London office, which has exposed a variety of foreign buyers and sellers to the brokerage. Back home in Manhattan, the firm is currently marketing several high-end listings, including a $27 million Upper East Side townhouse at 170 East 80th Street and a $17.5 million Upper West Side townhouse at 38 West 87th Street. TRD

Inventory from page 58 tended to be petite, like 455 West 20th Street, the new 21-unit Brodsky Organization project inside the General Theological Seminary. Even the hulking Walker Tower, under construction at 212 West 18th Street, is adding just 53 units.

East Village/ Lower East Side (31 percent drop since 2009) nventory in this mostly young Downtown area, where protests recently erupted over the arrival of a 7-11 convenience store, has also dropped. The combined neighborhood on Manhattan’s East Side — which runs from 14th Street to Canal — had 281 listings in 2009. Last month, there were only 194 listings, 31 percent fewer. Since last year alone, when there were 266 listings, the area has seen a 27 percent decline in available for-sale units. The average asking price now is $1.3 million, up from $1.2 million last year. Recent developments, though, have crept in on the edges. Orange Management’s 123 Third Avenue condo launched in 2010 and has sold all 47 of its units except a penthouse, according to StreetEasy. And there are others on its heels: The Jefferson, an 82unit condo on a long-empty lot at 211 East 13th Street, off Third Avenue, is rising fast. It’s being constructed by a team

108 May 2013 www.TheRealDeal.com

East Village/ Lower East Side Year

# of listings

2009

281

2010

256

2011

266

2012

266

2013

194

that includes Ironstate Development, the Shnay Brothers and Charles Blaichman. The dearth of for-sale units has had another upside in the enclave: The rental market in the area has benefited, said Jason Misrahi, chief operating officer at Misrahi Realty, a brokerage based on Rivington Street. “It definitely juiced up my rental market,” he said. Rents in the area, which run to $2,400 for a studio, continue to climb, he said. TRD

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Top residential firms

from page 41

cent to 244 Manhattan agents, up from 213 last year. Elizabeth Ann Kivlan, president of Stribling, told TRD that the firm had been gradually adding to its Manhattan ranks throughout the year, although not in large numbers. “We’re happy with our size,” she said. In Brooklyn, however, Stribling is looking to add up to 50 agents to coincide with the opening of its first Brooklyn office this month at 384 Atlantic Avenue, near the Barclays Center. The city’s third-largest firm this year was Halstead, which grew its Manhattan agent total to 617 from 600 in 2012, jumping ahead of Citi Habitats in size. The growth this year is due in part to Halstead’s purchase of the assets of the five-agent firm Stein-Perry Real Estate, a residential brokerage based in Washington Heights. Halstead’s Ramirez told TRD that she makes decisions about the company based on long-term strategy as opposed to temporary market trends. “At our level, we have to look long-term,” she said. “You cannot run a company based on what’s happening in the market at that moment.” Citi Habitats, which slipped in the rankings to No. 4 from No. 3 in 2012, has had a tumultuous year, as TRD previously reported. The firm’s head of new development marketing, Clifford Finn, left for Elliman, and Corcoran Sunshine — which has the

same corporate parent, NRT — took over Citi’s outstanding new development commitments. Meanwhile, Gordon Golub, the firm’s second in command, departed in January after 18 years. (He was replaced by Peter Sobeck, previously a senior vice president at NRT.) And last month, the firm took another hit when sisters Tracie and Elizabeth Hamersley, Citi’s perennially top-ranked sales team, joined Elliman. The company also closed two offices in the last year — at 27 East 22nd Street and 32 East 22nd Street — bringing its total office count to nine. But Citi Habitats President Gary Malin told TRD that the company is currently seeking out new office space, and is focused on relaunching its new development division. He declined to provide further details. “Last year was really a year for us to take stock of where we were, but more importantly, where we wanted to go,” he said.

Bucking the trend Two firms did manage to buck the trend by growing their listings volume this year: Rutenberg Realty and Bond New York. Rutenberg — known for its high-commission split model, in which brokers pay the firm fixed fees rather than a percentage of their earnings — had $94 million worth of listings this year, up 12 percent from last year’s TRD ranking.

Company co-founder Kathy Braddock attributed Rutenberg’s growth to maintaining its focus on real estate, as opposed to extras. “We’re not trying to build a $3 million website,” she said. “We’re not trying to open up fancy branches all over the place; we’re not trying to create an app that somebody might use if they happen to be out and about in the street. I don’t mean to diss my competition, but [other firms] feel this constant pressure to be doing something new and different.… We came out of the box and we have stuck exactly to our model.” Bond, often considered primarily a rental brokerage, grew its listings volume by 15 percent, to $31 million. And Bond co-founder Bruno Ricciotti said the firm now has several big-ticket sales listings not reflected in the rankings. A $14 million penthouse at 50 East 89th Street, for example, was listed by Bond’s Kianna Choi the week after TRD collected its data. Ricciotti told TRD that Bond has worked to get more highpriced exclusives over the past year by hiring a number of experienced sales brokers. Agents who started out doing rentals, meanwhile, have since begun working on sales transactions, he said. “This week alone, we closed a $15.5 million listing [and] listed a $14 million property,” he said. “We’re definitely turning a corner into the high-end market.” TRD

Scheetz from page 72 complished career. The 66-year-old Schrager, who himself went to jail after pleading guilty to income tax evasion in connection with Studio 54, said “of course it set him back.” “It was a terrible thing that happened to him,” he told TRD. “I went through a similar thing with Studio 54. Everybody makes mistakes, some are bigger than others. You have to pick yourself up and dust yourself off.” While publicly fighting for his reputation, Scheetz was quietly working on a comeback in the hotel business, but this time from the ground up. In 2008, he launched a Greenwich, Conn.-based firm called the Scheetz Group, a hotel investment firm that bought a 15 percent stake in the trendy Surf Lodge Lounge in Montauk. He later co-founded King & Grove as an affiliated hotel management and development company. Then in May 2011, he entered into a deal for the firm to manage the Surf Lodge. His King & Grove cofounders were Ben Pundole, his former vice president of entertainment at Morgans, and Rob McKinley, a Manhattan-based designer and partner in Manhattan nightclubs Cain Luxe and GoldBar. The Surf Lodge — whose majority owners included McKinley’s GoldBar partners Jayma Cardoso, Jamie Mulholland and Manhattan-based broker Steven Kamali — altered the nightlife scene in Montauk. But while stiletto-wearing patrons crowded the bar at night, behind the scenes the deal was souring. Indeed, Scheetz filed suit against the Surf Lodge owners last year, alleging that they diverted funds to their nightclub properties and tried to sell the hotel to another inside investor and dilute his interest. (A judge, however, allowed the sale to proceed.) In December, the majority owners of the Surf Lodge filed a separate $4.8 million suit against King & Grove, alleging that it mismanaged the hotel and stole the concept to launch a rival hotel-restaurant called Ruschmeyer’s, right down the street. They say King & Grove funneled nearly all hotel and

restaurant business to Ruschmeyer’s, costing them hundreds of thousands of dollars and prompting them to sell the Surf Lodge. Scheetz declined to comment on the pending case, as did lawyers for the former owners. Meanwhile, Scheetz and Pundole had their own highly publicized split. Last year, the New York Post reported that Pundole resigned from King & Grove by email after Chetrit and Scheetz reneged on a deal to give him an ownership stake in the hotel company. Pundole declined to comment on the resignation. But Scheetz confirmed that Pundole was “very involved” with Ruschmeyer’s and said he has a “great appreciation” for his former partner. Schrager — who is now working with Pundole again at Edition (a collaboration with Marriott) — said he doesn’t know exactly what happened between the two, but noted that he remains friends with both. “I don’t think it was a Cain and Abel story,” Schrager said. “Sometimes business strategies and business expectations kind of differ.”

Not just a finance whiz Long before Scheetz began making a name for himself in the hotel world, he established himself in finance. After graduating from Princeton, Scheetz made his first impression at Trammel Crow Realty Advisors in Dallas from 1988 to 1993. By age 28, he had caught the eye of Stephen Ross, the head of the Manhattan-based development firm Related Companies, who recommended him to Bill Mack of the development company Mack Cos. It was 1992, and Mack had just launched a $500 million real estate fund with Leon Black of the megafirm Apollo Real Estate Advisors. Mack contacted Scheetz and asked him to come to New York for a meeting. Reflecting back on those days, Scheetz said, “I owe a lot to Steve for thinking highly enough [of me] to recommend

me, and to Bill for giving me the opportunity to work with him running the Apollo Real Estate Funds.” Among the many deals arranged by Scheetz during his time at Apollo were two notables in 1994: a $15 million investment in Andrew Farkas’s Insignia Financial Group and the deal to restructure bankrupt real estate and energy conglomerate Olympia & York. Scheetz left Apollo in 1997 to launch NorthStar along with David Hamomoto, who at the time was managing the $1.1 billion Goldman Sachs Whitehall Fund, a real estate fund. NorthStar quickly established itself as a major player when it acquired 84 percent of Schrager’s eponymous hotel company — which ultimately became Morgans — for $255 million. (The deal allowed Schrager to maintain complete control over hotel operations.) The venture also expanded Schrager’s holdings, acquiring the Hotel St. Mortiz on Central Park South, the Empire Hotel on the Upper West Side and the famed Barbizon Hotel. The expansion made Schrager the largest privately owned hotel firm in New York, with 4,200 rooms by 1998. “I learned that Ed was more than a brilliant financial guy and a brilliant deal guy, but could execute a growth strategy,” said Schrager, who put Scheetz in charge of Morgans when he stepped down as CEO of Morgans in 2005 to launch Ian Schrager Co. (Schrager’s new firm developed luxury residential projects, including 40 Bond and 50 Gramercy Park North.) For his part, Scheetz said there was a learning curve to transition from structuring financial deals to growing a boutique hotel company. “I knew I wasn’t another Ian, so it was challenging to rebuild the company so that it wasn’t reliant on its founder,” he said. “I’m proud of initiating the strategy of using what I felt were Morgans’ iconic brands to expand the company.” Today, the test for Scheetz may be to prove that he can grow a boutique hospitality company all over again — but sources say with King & Grove he seems to be off to a good start. TRD

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Book review

from page 34

was seen as a threat,” Bagli writes. “Including the gardening.” Once Tishman Speyer had control, the firm failed to generate as much rental income as predicted, according to Bagli, and by January 2009, the reserve funds ran out. A few months later, an appeals court ruled in favor of a group of tenants who had sued in 2007, claiming the owners had illegally deregulated about 4,400 units while taking J-51 tax benefits. When Speyer heard about the decision, he had a succinct

response: “Shiiitttt!” The ruling, upheld by New York State’s highest court that fall, meant that Tishman Speyer could have been on the hook for as much as $200 million in rent overcharges. The case was officially settled last month, but shortly after that decision, Tishman Speyer relinquished the complex to lenders, walking away from the soured deal. CWCapital Asset Management, a special servicer, officially took control in October 2010.

Certainly, the court decision and a rental market weakened by the housing collapse hurt the buyers’ chances of profiting off Stuy Town. But, Bagli argues, the acquisition “required a financial leap of faith and a total disregard for worst-case scenarios by buyers, lenders and investors.” And, like the Wall Street CEOs who pocketed bonuses while their firms floundered, Tishman Speyer left Stuy Town with nary a financial scratch. Ultimately, it was the pension funds and foreign governments that lost it all. TRD

will not start until a tenant or tenants have committed to take at least 400,000 square feet of space, said Jones Lang LaSalle Managing Director Derek Trulson, who is part of a team handling leasing at 1 Hudson Yards. But he said the MTA is readying the foundation for the Extell site as it builds the new No. 7 subway station, which gives the project “a running start” in terms of “speed to market and certainty of delivery.” Extell has a reputation as a prolific residential and commercial builder, and is currently completing the 748,000-square-foot Gem Tower office building at 50 West 47th Street in the Diamond District. But this parcel, like Moinian’s, is located on 11th Avenue, which could make it more difficult to lure tenants, brokers said. Trulson, however, said the site is “central to all of the Hudson Yards district.” And unlike the multitowered Related and Brookfield sites, which some tenants worry could be under construction for years, “we are one building,” Trulson said. He declined to specify the asking rent, but said Extell would fight for tenants. “We are going to be competitive,” he said. “The nature of the site and our basis allows us to be. We believe we will be as competitive as anyone in the market.”

Alloy is keeping the brokerage industry “up to date” on the project.

Hudson Yards from page 50 decrease for projects west of 10th Avenue. Mosler and Larkin would not reveal the asking rent, saying only that the rents would be “competitive.”

3 Hudson Boulevard

The Moinian Group 1.8 million square feet Expected completion date: 2016 ome consider the Moinian Group’s 3 Hudson Boulevard to be the best-positioned of the Far West Side’s new buildings: It sits on top of the No. 7 subway station and across from the Jacob K. Javits Convention Center. Another advantage to the FXFOWLE Architects–designed project is that “you are not on a platform, you are on bedrock,” said Arthur Mirante, president of the tristate region for commercial firm Avison Young, which is handling leasing at 3 Hudson Boulevard. He said he also points out to potential tenants that “no water got anywhere near this with [Hurricane] Sandy. [Yet] you are on the Hudson River with water views.” Like Related did with Coach, Moinian will look for prospective tenants that would want to sell their existing building in exchange for a condo unit at 3 Hudson, Mirante said. Asking rents in the 1.8 million-square-foot building are currently $85 per square foot, according to Mirante, but ultimately, “We hope to achieve in excess of $100 [per foot] in the tower.” A challenge facing the project is that while Moinian is well known as a residential developer and an office owner, the firm has limited experience as a ground-up, Class A office tower builder. Moinian’s residential management was criticized in the wake of Hurricane Sandy, and insiders said the company’s access to construction financing is not as strong as other developers’. For that reason, sources expect Moinian to partner with a more-established office landlord to move the project forward, much as it did with SL Green Realty at 3 Columbus Circle. In response to those criticisms, a spokesperson for Moinian said the company has three decades of development experience and strong relationships with lenders, and issued the following statement: “The Moinian Group is looking forward to breaking ground on 3 Hudson Boulevard and efficiently delivering this elegant office tower to Manhattan’s new West Side.” The spokesperson declined to comment on whether Moinian is planning to partner with another developer on the project. Developer: Size:

1 Hudson Yards

Developer: Extell Development Size: 1.75 million square feet

Expected completion date: TBD

xtell Development, headed by Gary Barnett, owns a parcel at 34th Street, just south of Moinian’s. Barnett is planning to construct 1 Hudson Yards, a 1.75 millionsquare-foot office building, on the site. But construction

112 May 2013 www.TheRealDeal.com

450 Hudson Park Boulevard Alloy Development (possibly with Boston Properties) Size: 1.1 million square feet Expected completion date: TBD lloy Development is far less well-known than its competitors, and its site is the smallest of those now vying for tenants. Alloy assembled the site — west of 10th Avenue between 35th and 36th streets — in 2007. The location has been cleared and stands ready for a tenant, but there’s no set development plan in place, according to Alloy president Jared Della Valle, an architect and developer. Brooklyn-based Bernheimer Architecture drafted a rendering, but the design was created to give tenants an idea of what the site could look like, and is not an active plan, Della Valle said. “Our opportunity is more build-to-suit,” said Della Valle, noting that the building can support floor plates as large as 48,000 square feet at its base. Della Valle is working informally on plans for the project with large office owner Boston Properties. The two are each looking for a large tenant for the site, which Alloy could develop by itself or in partnership with Boston Properties, Della Valle said. Boston Properties did not respond to requests for comment. But Della Valle said he is also entertaining other possibilities, such as selling the site, or leasing it on a long-term basis to another owner or developer. A leasing team hasn’t yet been hired, although he said Developer:

447 10th Avenue Developer: Sherwood Equities Size: 2.5 million square feet Expected completion date: TBD Leasing agent: None idtown-based Sherwood Equities, headed by CEO Jeffrey Katz, owns three parcels in the Hudson Yards area. But much like Alloy, it is less well-known than most of the other Far West Side developers. Sherwood is planning an office tower at 447 10th Avenue at 34th Street on a site it’s owned since 1986. (Sherwood’s two smaller sites in the district will likely become residential or mixed-use towers.) But the firm is in no hurry to start construction on the massive office project, Nelson said, and Sherwood is not competing as fiercely for tenants as some of the other developers in the area. “We are not being as aggressive as the others,” Nelson said. With rents in the untested neighborhood still relatively low, the firm feels that “it does not make sense to fight tooth and nail.” He said he expects rents in the area to rise dramatically once tenants start moving in to other new buildings. Sherwood is nonetheless on the lookout for tenants in need of large chunks of space. Sources said the firm responded to an inquiry from Time Warner about potentially taking space at 447 10th. Nelson declined to comment on Time Warner specifically, but confirmed that Sherwood would indeed respond “if a tenant came along that needed 2 million square feet.” TRD

CORRECTIONS A N D C L A R I F I C AT I O N S The April magazine story, “Boom-time megaprojects: Where are they now?” incorrectly stated the date when Manhattan House’s construction loan matures. It is in fact slated to mature in December 2015. In an April issue story entitled, “Behind ‘Big Data,’” The Real Deal incorrectly stated that Halstead Property was a client of BlockAvenue. While Stephen Kliegerman, president of Halstead’s development marketing division, is an adviser to BlockAvenue and uses the service, the brokerage is not a client. A story in the April magazine, “Miron opens its second Union Square office,” incorrectly stated the number of New York City offices operated by Miron Properties. The correct number is three. The same story also incorrectly stated the location of the firm’s fourth office, which is in fact in Tenafly, N.J.

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Rechler

from page 31

partner looking for a relatively modest rate of return. Reckson decided to submit an early bid and up it by $50 million to ensure nobody would match it. But before it could get the bid in, the firm got a call notifying it that the property had sold for tens of millions more than it had planned to bid. Indeed, investment manager Beacon and Lehman Brothers agreed to pay $1.5 billion in the second-priciest office building purchase in U.S. history at the time. “Everything we bid on, we were just losing,” Rechler said. “I guess subconsciously we were thinking, ‘this market is really getting heated.’ And in our own mind, we were trying to find a capital source to see if we could be players in this market, and be active in this market, and we realized we couldn’t be.” Rechler and his team agreed that the market might be nearing a top, making it a potentially ripe time to sell Reckson. Just weeks before, the REIT Trizec Properties Inc. had sold for $8.9 billion. It seemed like a market where a company of Reckson’s size could be reasonably assured it would get multiple cash bids. So in August 2006, it agreed to sell to SL Green for about $6 billion, which included outstanding debt of about $2 billion. It was a deal that promised to pay Reckson’s 68 million shareholders roughly 700 percent more than the REIT’s initial IPO price. Even so, many shareholders were outraged, complaining that price wasn’t high enough. They cried cronyism, pointing to a side agreement that called for a newly formed private consortium, led by Rechler, to buy back Reckson’s suburban buildings. They also argued that the frothy real estate market had far higher to climb. The deal closed in January, just a few weeks before news broke that Macklowe acquired a $7.6 billion portfolio of New York City office towers owned by Sam Zell’s Equity Office Trust — a top-of-the-market deal that became the poster child for the out-of-control times. In a telling move, Macklowe had publicly announced his intention to partner with Carl Icahn to top SL Green’s bid for Reckson — before backing out and going after the Equity deal.

Back in business The day after the sale to SL Green closed, Rechler and his team were back in business — in the same offices, but with a new name: RXR Associates. They spent the day completing a billion-dollar deal (backed by two pension funds) to buy back the New Jersey and Long Island properties Reckson had just sold to SL Green. Then a few months later, the market crashed. RXR’s problems were relatively minor compared to many other real estate companies. Its biggest issue was a 300,000-square-foot building it had built in Princeton: Development had finished just in time for it to sit empty in 2008 and a construction loan was coming due. But ultimately, the company bought the debt back at a discount, and leased the Princeton building up. Meanwhile, after the crash, Rechler and his top executives worked their Rolodexes, compiling a list of properties that were underwater or in need of restructuring. For the next two years they reached out to bankers, debt servicers, private equity shops and hedge funds to try to get an in on buying some of those buildings. For many months, the market was frozen. But RXR wanted to be on the other end of the phone when those who needed to sell finally did so. So it offered to help evaluate properties for owners still trying to find out where the market was headed, or assist in any other way. “We did work so that when things started to happen, we had either bought the debt on it, or [were otherwise in] a position so we could have a seat at the table, or we had been working with one of the private equity shops that were looking to exit,” Rechler said. The effort yielded its first payoff in August 2009, when RXR bought the debt on 1166 Avenue of the Americas — where JPMorgan Chase had a long-term lease — at a steep discount. The deal offered an immediate return of about 15 percent, which more than doubled over the next several years. At the time, however, it was a harrowing decision. For weeks, Rechler and his team considered every possible issue. For example, what would happen if JPMor-

gan went out of business? But the bet paid off. Back then office space was going for about $30 to $40 a square foot; today it’s going for between $50 and $60. In November 2010, RXR also acquired a building it had long coveted — 1330 Avenue of the Americas, a Macklowe-owned building a few doors from its own headquarters. RXR had been in contact with the Canadian pension fund that owned the debt for some time, offering to pay roughly $400 million. Then late on a Friday, as Rechler was getting ready to go to his niece’s Bat Mitzvah, he got a call from a fund official saying if RXR put down a $50 million deposit by Monday and could close by the end of the year, it could buy the building. Rechler and his team worked the phones from the hotel where the Bat Mitzvah was being held and won the necessary commitments from investment partners. The deal was signed that Monday. In the months that followed, RXR decided to bet big on Midtown South, hoping to capitalize on the coming high-tech boom. In the spring of 2011, it announced a $920 million megadeal to buy the Starrett Lehigh Building, a 2.2. million-square-foot behemoth on West 26th Street. Soon after, it acquired 620 Sixth Avenue, the Bed Bath & Beyond building, at 19th Street, for about $500 million. In total, Rechler said RXR has raised about $2.9 billion from private investors, and is about 50 percent leveraged. He noted that the firm is disciplined about sticking to its strategy of paying prices that make sense. And he sees little reason for the firm to return to the public markets.. The private approach, he said, allows it to target pitches to investors rather than millions of shareholders. “We don’t want to buy commodity buildings. We want to buy buildings that are tarnished gems, that have some sort of real estate problem or balance-sheet problem,” he said. “[The goal is] to polish them up and have a precious gem at the end.” TRD

ICSC from page 70 basketball-themed cocktail party in the Palms’ Hardwood Suite, a 10,000-square-foot, two-story space boasting an indoor basketball court, locker room and scoreboard. Not surprisingly, Monday night’s parties sometimes even spill into Tuesday, brokers said, noting that it’s not unusual for real estate pros to head home at dawn. Some brokers suggest keeping sober during these marathon fiestas, to help facilitate business and connections, while others dive head first into the spirit (and spirits).

Tuesday, May 21

“Meet the Trustees” breakfast: Las Vegas Convention Center (7 a.m.) This event is a must-attend, especially for ICSC newbies, insiders said. It features a round-table discussion and meet-and-greet with the ICSC’s Board of Trustees, which includes such high-profile execs as Foot Locker CEO Ken Hicks; Ken Bernstein, President and CEO of Acadia Realty

Trust; and Scott Nelson, senior vice president for real estate at Target Corp. Getting to know these top players on a personal level is invaluable, brokers said.

Keynote address: Gregory Wasson, president & CEO of Walgreens, Las Vegas Convention Center (1:15 p.m.) The Walgreens pharmacy head is slated to discuss Obamacare and its impact on the retail drugstore industry, along with Walgreens’ recent move to take an equity interest in Alliance Boots GmbH, an international health and beauty company.

16th Annual New York Developers Party: Bellagio (time TBD) The New York Developers is a group of 15 retail real estate development and investment firms based in the New York metropolitan area, including the Feil Organization and the Mattone Group. Their annual invitation-only party, held

poolside at the Bellagio, is widely seen as ICSC’s big finale and always well-attended by players from nearly every facet of the industry — from contractors to retail CEOs. Last year’s party famously featured women dressed as mermaids. “Mermaids!” one broker recalled incredulously. “It’s a must-attend,” Consolo told TRD.

Wednesday, May 22, and beyond The Leasing Mall will remain open on Wednesday, but most firms said they’ll be closing up shop and heading home at that point. Once back in New York, following up on conference leads is, of course, critical, brokers said. Many deals are actually done long after the conference, Shabtai added. She first met representatives from a movie theater company at ICSC, and years later they’re still looking for the right space to open a branch in New York City. “You never know who’s going to be on the other end of a smile or handshake at ICSC,” Shabtai said. “It’s this microcosm of the real estate world.” TRD

For more NYC real estate news, go to www.TheRealDeal.com 114 May 2013 www.TheRealDeal.com

www.TheRealDeal.com January 2012 00

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.com Every building tells a story... In my younger and more vulnerable years my father gave me some advice that I’ve been turning over in my mindever since.‘Whenever you feel like criticizing any one,’ he told me,‘just remember that all the people in this world haven’t had the advantages that you’ve had.’ He didn’t say any more but we’ve always been unusually communicative in a reserved way, and I understood that he meant a great deal more than that. In consequence I’m inclined to reserve all judgments, a habit that has opened up many curious natures to me and also made me the victim of not a few veteran bores. The abnormal mind is quick to detect and attach itself to this quality when it appears in a normal person, and so it came about that in college I was unjustly accused of being a politician, because I was privy to the secret griefs of wild, unknown men. Most of the confidences were unsought—frequently I have feigned sleep, preoccupation, or a hostile levity when I realized by some unmistakable sign that an intimate revelation was quivering on the horizon—for the intimate revelations of young men or at least the terms in which they express them are usually plagiaristic and marred by obvious suppressions. Reserving judgments is a matter of infinite hope. I am still a little afraid of missing something if I forget that, as my father snobbishly suggested, and I snobbishly repeat a sense of the fundamental decencies is parcelled out unequally at birth. And, after boasting this way of my tolerance, I come to the admission that it has a limit. Conduct may be founded on the hard rock or the wet marshes but after a certain point I don’t care what it’s founded on. When I came back from the East last autumn I felt that I wanted the world to be in uniform and at a sort of moral attention forever; I wanted no more riotous excursions with privileged glimpses into the human heart. Only Gatsby, the man who gives his name to this book, was exempt from my reaction—Gatsby who represented everything for which I have an unaffected scorn. If personality is an unbroken series of successful gestures, then there was something gorgeous about him, some heightened sensitivity to the promises of life, as if he were related to one of those intricate machines that register earthquakes ten thousand miles away. This responsiveness had nothing to do with that flabby impressionability which is dignified under the name of the ‘creative temperament’— it was an extraordinary gift for hope, a romantic readiness such as I have never found in any other person and which it is not likely I shall ever find again. No—Gatsby turned out all right at the end; it is what preyed on Gatsby, what foul dust floated in the wake of his dreams that temporarily closed out my interest in the abortive sorrows and shortwinded elations of men. My family have been prominent, well-to-do people in this middle-western city for three generations. The Carraways are something of a clan and we have a tradition that we’re descended from the Dukes of Buccleuch, but the actual founder of my line was my grandfather’s brother who came here in fifty-one, sent a substitute to the Civil War and started the wholesale hardware business that my father carries on today. I never saw this great-uncle but I’m supposed to look like him—with special reference to the rather hard-boiled painting that hangs in Father’s office. I graduated from New Haven in 1915, just a quarter of a century after my father, and a little later I participated in that delayed Teutonic migration known as the Great War. I enjoyed the counter-raid so thoroughly that I came back restless. Instead of being the warm center of the world the middle-west now seemed like the ragged edge of the universe—so I decided to go east and learn the bond business. Everybody I knew was in the bond business so I supposed it could support one more single man. All my aunts and uncles talked it over as if they were choosing a prep-school for me and finally said, ‘Why—yees’ with very grave, hesitant faces. Father agreed to finance me for a year and after various delays I came east, permanently, I thought, in the spring of twenty-two. The practical thing was to find rooms in the city but it was a warm season and I had just left a country of wide lawns and friendly trees, so when a young man at the office suggested that we take a house together in a commuting town it sounded like a great idea. He found the house, a weather beaten cardboard bungalow at eighty a month, but at the last minute the firm ordered him to Washington and I went out to the country alone. I had a dog, at least I had him for a few days until he ran away, and an old Dodge and aFinnish woman who made my bed and cooked breakfast and muttered Finnish wisdom to herself over the electric stove. It was lonely for a day or so until one morning some man, more recently arrived than I, stopped me on the road. ‘How do you get to West Egg village?’ he asked helplessly. I told him. And as I walked on I was lonely no longer. I was a guide, a pathfinder, an original settler. He had casually conferred on me the freedom of the neighborhood. And so with the sunshine and the great bursts of leaves growing on the trees—just as things grow in fast movies—I had that familiar conviction that life was beginning over again with the summer. There was so much to read for one thing and so much fine health to be pulled down out of the young breath-giving air. I bought a dozen volumes on banking and credit and investment securities and they stood on my shelf in red and gold like new money from the mint, promising to unfold the shining secrets that only Midas and Morgan and Maecenas knew. And I had the high intention of reading many other books besides. I was rather literary in college—one year I wrote a series of very solemn and obvious editorials for the ‘Yale News’—and now I was going to bring back all such things into my life and become again that most limited of all specialists, the ‘well-rounded man.’ This isn’t just an epigram—life is much more successfully looked at from a single window, after all. It was a matter of chance that I should have rented a house in one of the strangest communities in North America. It was on that slender riotous island which extends itself due east of New York and where there are, among other natural curiosities, two unusual formations of land. Twenty miles from the city a pair of enormous eggs, identical in contour and separated only by a courtesy bay, jut out into the most domesticated body of salt water in the Western Hemisphere, the great wet barnyard of Long Island Sound. They are not perfect ovals—like the egg in the Columbus story they are both crushed flat at the contact end—but their physical resemblance must be a source of perpetual confusion to the gulls that fly overhead. To the wingless a more arresting phenomenon is their dissimilarity in every particular except shape and size. I lived at West Egg, the—well, the less fashionable of the two, though this is a most superficial tag to express the bizarre and not a little sinister contrast between them. My house was at the very tip of the egg, only fifty yards from the Sound, and squeezed between two huge places that rented for twelve or fifteen thousand a season. The one on my right was a colossal affair by any standard—it was a factual imitation of some Hôtel de Ville in Normandy, with a tower on one side, spanking new under a thin beard of raw ivy, and a marble swimming pool and more than forty acres of lawn and garden. It was Gatsby’s mansion. Or rather, as I didn’t know Mr. Gatsby it was a mansion inhabited by a gentleman of that name. My own house was an eye-sore, but it was a small eye-sore, and it had been overlooked, so I had a The Great Gatsby view of the water, a partial view of my neighbor’s lawn, and the consoling proximity of millionaires—all for eighty dollars a month. Across the courtesy bay the white palaces of fashionable East Egg glittered along the water, and the history of the summer really begins on the evening I drove over there to have dinner with the Tom Buchanans. Daisy was my second cousin once removed and I’d known Tom in college. And just after the war I spent two days with them in Chicago. Her husband, among various physical accomplishments, had been one of the most powerful ends that ever played football at New Haven—a national figure in a way, one of those men who reach such an acute limited excellence at twenty-one that everything afterward savors of anti-climax. His family were enormously wealthy—even in college his freedom with money was a matter for reproach—but now he’d left Chicago and come east in a fashion that rather took your breath away: for instance he’d brought down a string of polo ponies from Lake Forest. It was hard to realize that a man in my own generation was wealthy enough to do that. Why they came east I don’t know. They had spent a year in France, for

116 May 2013 www.TheRealDeal.com

And if you know the full story, brand yourself as THE EXPERT in the buildings you know and specialize in. Showcase your knowledge and advertise your listings to today's buyers by sponsoring valuable, credible information to the marketplace. And as I walked on I was lonely no longer. I was a guide, a pathfinder, an original settler. He had c a s u a l l y conferred on me the freedom of t h e neighborhood. And so with the sunshine and the great bursts of leaves growing on the trees—just as things grow in fast movies—I had that familiar conviction that life was beginning over again with the summer. There was so much to read for one thing and so much fine health to be pulled down out of the young breath-giving air. I bought a dozen volumes on banking and credit and investment securities and they stood on my shelf in red and gold like new money from the mint, promising to unfold the shining secrets that only Midas and Morgan and Maecenas knew. And I had the high intention of reading many other books besides. I was rather literary in college—one year I wrote a series of very solemn and obvious editorials for the ‘Yale News’—and now I was going to bring back all such things into my life and become again that most limited of all specialists, the ‘well-rounded man.’ This isn’t just an epigram—life is much more successfully looked at from a single window, after all. It was a matter of chance that I should have rented a house in one of the strangest communities in North America. It was on that slender riotous island which extends itself due east of New York and where there are, among other natural curiosities, two unusual formations of land. Twenty miles from the city a pair of enormous eggs, identical in contour and separated only by a courtesy bay, jut out into the most domesticated body of salt water in the Western Hemisphere, the great wet barnyard of Long Island Sound. They are not perfect ovals—like the egg in the Columbus story they are both crushed flat at the contact end—but their physical resemblance must be a source of perpetual confusion to the gulls that fly overhead. To the wingless a more arresting phenomenon is their dissimilarity in every particular except shape and size. I lived at West Egg, the—well, the less fashionable of the two, though this is a most superficial tag to express the bizarre and not a little sinister contrast between them. My house was at the very tip of the egg, only fifty yards from the Sound, and squeezed between two huge places that rented for twelve or fifteen thousand a season. The one on my right was a colossal affair by any standard—it was a factual imitation of some Hôtel de Ville in Normandy, with a tower on one side, spanking new under a thin beard of raw ivy, and a marble swimming pool and more than forty acres of lawn and garden. It was Gatsby’s mansion. Or rather, as I didn’t know Mr. Gatsby it was a mansion inhabited by a gentleman of that name. My own house was an eye-sore, but it was a small eye-sore, and it had been overlooked, so I had a The Great Gatsby view of the water, a partial view of my neighbor’s lawn, and the consoling proximity of millionaires—all for eighty dollars a month. Across the courtesy bay the white palaces of fashionable East Egg glittered along the water, and the history of the summer really begins on the evening I drove over there to have dinner with the Tom Buchanans. Daisy was my second cousin once removed and I’d known Tom in college. And just after the war I spent two days with them in Chicago. Her husband, among various physical accomplishments, had been one of the most powerful ends that ever played football at New Haven—a national figure in a way, one of those men who reach such an acute limited excellence at twenty-one that everything afterward savors of anti-climax. His family were enormously wealthy—even in college his freedom with money was a matter for reproach—but now he’d left Chicago and come east in a fashion that rather took your breath away: for instance he’d brought down a string of polo ponies from Lake Forest. It was hard to realize that a man in my own generation was wealthy enough to do that. Why they came east I don’t know. They had spent a year in France, for no particular reason, and then drifted here and there unrestfully wherever

The younger of the two was a stranger to me. She was extended full length at her end of the divan, completely motionless and with her chin raised a little as if she were balancing something on it which was quite likely to fall. If she saw me out of the corner of her eyes she gave no hint of it—indeed, I was almost surprised into murmuring an apology for having disturbed her by coming in. The other girl, Daisy, made an attempt to rise—she leaned slightly forward with a conscientious expression— then she laughed, an absurd, charming little laugh, and I laughed too and came forward into the room. ‘I’m p-paralyzed with happiness.’ She laughed again, as if she said something very witty, and held my hand for a moment, looking up into my face, promising that there was no one in the world she so much wanted to see. That was a way she had. She hinted in a murmur that the surname of the balancing girl was Baker. (I’ve heard it said that Daisy’s murmur was only to make people lean toward her; an irrelevant criticism that made it no less charming.) At any rate Miss Baker’s lips fluttered, she nodded at me almost imperceptibly and then quickly tipped her head back again—the object she was balancing had obviously tottered a little and given her something of a fright. Again a sort of apology arose to my lips. Almost any exhibition of complete self sufficiency draws a stunned tribute from me. I looked back at my cousin who began to ask me questions in her low, thrilling voice. It was the kind of voice that the ear follows up and down as if each speech is an arrangement of notes that will never be played again. Her face was sad and lovely with bright things in it, bright eyes and a bright passionate mouth—but there was an excitement in her voice that men who had cared for her found difficult to forget: a singing compulsion, a whispered ‘Listen,’ a promise that she had done gay, exciting things just a while since and that there were gay, exciting things hovering in the next hour. I told her how I had stopped off in Chicago for a day

She laughed again, as if she said something very witty, and held my hand for a moment, looking up into my face, promising that there was no one in the world she so much wanted to see. That was a way she had. She hinted in a murmur that the surname of the balancing girl was Baker. (I’ve heard it said that Daisy’s murmur was only to make people lean toward her; an irrelevant criticism that made it no less charming.) At any rate Miss Baker’s lips fluttered, she nodded at me almost imperceptibly and then quickly tipped her head back again—the object she was balancing had obviously tottered a little and given her something of a fright. Again a sort of apology arose to my lips. Almost any exhibition of complete self sufficiency draws a stunned tribute from me. I looked back at my cousin who began to ask me questions in her low, thrilling voice. It was the kind of voice that the ear follows up and down as if each speech is an arrangement of notes that will never be played again. Her face was sad and lovely with bright things in it, bright eyes and a bright passionate mouth—but there was an excitement in her voice that men who had cared for her found difficult to forget: a singing compulsion, a whispered ‘Listen,’ a promise that she had done gay, exciting things just a while since and that there were gay, exciting things hovering in the next hour. I told her how I had stopped off in Chicago for a day on my way east and how a dozen people had sent their love through me. ‘Do they miss me?’

“ T h e whole town is desolate. All the cars have the left rear wheel painted black as a mourning wreath, and there’s a persistent wail all night along the north shore.” “How gorgeous! Let’s go back, Tom. To-morrow!” Then she added irrelevantly: “You ought to see the baby.” “I’d like to.” “She’s asleep. She’s three years old. Haven’t you ever seen her?” “Never.” “Well, you ought to see her. She’s ——” Tom Buchanan, who had been hovering restlessly about the room, stopped and rested his hand on my shoulder “What you doing, Nick?” “I’m a bond man.” “Who with?” I told him. “Never heard of them,” he remarked decisively This annoyed me. “You will,” I answered shortly. “You will if you stay in the East.” “Oh, I’ll stay in the East, don’t you worry,” he said, glancing at Daisy and then back at me, as if he were alert for something more. “I’d be a God damned fool to live anywhere else.” At this point Miss Baker said: “Absolutely!” with such suddenness that I started — it was the first word she uttered since I came into the room. Evidently it surprised her as much as it did me, for she yawned and with a series of rapid, deft movements stood up into the room. “I’m stiff,” she complained, “I’ve been lying on that sofa for as long as I can remember.” “Don’t look at me,” Daisy retorted, “I’ve been trying to get you to New York all afternoon.” “No, thanks,” said Miss Baker to the four cocktails just in from the pantry, “I’m absolutely in training.” Her host looked at her incredulously. “You are!” He took down his drink as if it were a drop in the bottom of a glass. “How you ever get anything done is beyond me.” I looked at Miss Baker, wondering what it was she “got done.” I enjoyed looking at her. She was a slender, small-breasted girl, with an erect carriage, which she accentuated by throwing her body backward at the shoulders like a young cadet. Her gray sun-strained eyes looked back at me with polite reciprocal curiosity out of a wan, charming, discontented face. It occurred to me now that I had seen her, or a picture of her, somewhere before.

“ Yo u live in West Egg,” s h e remarked contemptuously. “I know somebody there.” “I don’t know a single ——”“You must know Gatsby.” “Gatsby?” demanded Daisy. “What Gatsby?” Before I could reply that he was my neighbor dinner was announced; wedging his tense arm imperatively under mine, Tom Buchanan compelled me from the room as though he were moving a checker to another square. Slenderly, languidly, their hands set lightly on their hips, the two young women preceded us out onto a rosy-colored porch, open toward the sunset, where four candles flickered on the table in the diminished wind. “Why candles?” objected Daisy, frowning. She snapped them out with her fingers. “In two weeks it’ll be the longest day in the year.” She looked at us all radiantly. “Do you always watch for the longest day of the year and then miss it? I always watch for the longest day in the year and then miss it.” “We ought to plan something,” yawned Miss Baker, sitting down at the table as if she were getting into bed. “All right,” said Daisy. “What’ll we plan?” She turned to me helplessly: “What do people p l a n ? ” Before I could answer her eyes fastened with an awed expression on her little finger.

“Look!”

she

complained; “I

hurt

it.”

We all looked — the knuckle was black and b l u e . “You did it, Tom,” she said accusingly. “I know you didn’t mean to, but you did do it. That’s what I get for marrying a brute of a man, a great, big, hulking physical specimen of a ——” “I hate that word hulking,” objected Tom crossly, “even in kidding.” “Hulking,” insisted Daisy. Sometimes she and Miss Baker talked at once, unobtrusively and with a bantering inconsequence that was never quite chatter, that was as cool as their white dresses and their impersonal eyes in the absence of all desire. They were here, an

www.TheRealDeal.com May 2013 117

d t h t h e y accepted Tom and me makin only p o l i t pleasa effort to enterta be entertaine knew that dinner would and a little l evening too w over and casu away. It was different from t where an even hurried from p phase toward its a co d i s a p p o i anticipation or sheer nervous the moment “You make m uncivilized, D confessed on m glass of corky b impressive clar you talk about something?” I nothing in part this remark, bu

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TH E R E A L D E A L CR O S S W O R D Trendy hotels, award-winning brokers and more BY MYLES MELLOR

Across 1. 4.

6. 8. 10. 13. 14.

15. 16.

17.

One of NYC’s big-budget hotel developers, Sam ____ Company joining forces with Washington Square Partners to build a market at City Point in Brooklyn First two letters of company recently bought by Bellmarc Iconic Manhattan building that turned 100 years old Place a bid A long time NYC developers regularly change the ___ of a building, often from industrial to residential Debt document “Wizard of Oz” actor whose one-time Beverly Hills home is on the market for $25.58 million, Bert ____ Unlike most major cities, NYC does not have one of these for the residential brokerage world

21. Nationally, there are more than 3,000 of these deserted homes that banks have foreclosed on 23. Be in debt to 24. The Clintons’ state 25. Title holder 27. The company building one of the city’s most exclusive residential buildings 28. ___RE Group 30. Action taken by the Department of Buildings when a structure is declared unsafe 33. Developer who is building a 720-unit rental in Brooklyn called the Hub 34. Loft conversion at 36 Bleecker Street, which was named after the site’s old printing plant 36. Adjective often reserved for areas like Tribeca, Soho and Noho 39. Times Square feature 40. Abigail Michaels’ service

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Park Ave. sale recently put her on TRD’s

Financier who recently sold his 733 Park Ave. penthouse for $21 million, _____ Allen

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COMINGS & GOINGS New bridge loan shop on the block

new Manhattan financial firm plans to originate between $100 and $150 million in loans in the coming year, founder Michael Hoffenberg told TRD. Newly launched Trevian Capital specializes in high-yield bridge loans — first mortgages or other senior secured loans with terms of six months to two years — in the $1 to $30 million range, he said. Trevian will help provide nontraditional financing for small to mid-size players who need money faster than a large bank can provide it, said Hoffenberg. “There is always a need for flexible, reliable, opportunistic capital,” said Hoffenberg, who expects Trevian to originate 75 percent loan-to-value bridge loans on multi-family, office and retail properties, with about half of its business in New York City and the other half spread throughout the country, with a focus on the Midwest. Hoffenberg previously worked at a private equity debt fund, but said he felt now is a good time to start a new firm because the “market has loosened up.” Michael Hoffenberg When it came to naming his new company, Hoffenberg decided to pay tribute to the mascot of his alma mater, New Trier High School outside Chicago. “I needed something unique,” he said. That turned out to be a good idea: The New Trier Trevians are so well-known in the Midwest, Hoffenberg said, that the name often serves as a good “conversation starter” with clients there. So far Hoffenberg has two employees, who work with him in Trevian’s 757 Third Avenue office, but he expects to hire around three additional people in the next year. Last month, Trevian closed a $2.2 million bridge loan in Brooklyn for a multi-family building, and $15.8 million in bridge funds on two multi-family assets in two Chicago suburbs, Hoffenberg said. By Guelda Voien

BROKER EXCHANGE Residential Bond New York Tuval Mor was hired as an agent from Keller Williams. Nikki Wernick, former director of leasing at Peter Cooper Village and Stuyvesant Town, joined the firm as an agent. Ari Silverstein joined from Oxford Property Group. Douglas Elliman Sisters Tracie and Elizabeth Hamersley were hired as executive vice presidents, along with their team from Citi Habitats. Miron Properties Alexandra Compuesto was hired as an agent from Metropolitan Property Group, Robert Krejci and Elicia Guarino joined the firm from Citi Habitats, Bradford Conrad joined from Rutenberg Realty, Julio Coronel joined from DSA Realty, Jeffrey Sackey was hired from Urban Apartments, and Wayne McClanahan, former property manager at Dermot, was hired as an agent. Saunders & Associates Penelope Moore has joined the firm as a senior vice president. She was previously at the Corcoran Group.

Bellmarc to open Morningside Heights office

Commercial

he Bellmarc Group is replacing its longtime Upper West Side location at 81st Street and Columbus Avenue with two larger outposts, one in the 70s and one in Morningside Heights, The Real Deal has learned. Bellmarc, the parent company of residential firms Bellmarc Realty and AC Lawrence, leased about 2,200 square feet at 2200 Broadway at 78th Street, and moved some 40 Bellmarc agents there late last month, Bellmarc founder Neil Binder said. The company is also in negotiations for a larger space “in the 100s” on the Upper West Side, Binder said, but declined to give further details since plans are not yet final. He said it hasn’t yet been determined whether Bellmarc or AC Lawrence A mosaic wall at Bellmarc’s Chelsea office agents, or a mix of the two, will be housed in the Morningside Heights office. Bellmarc had been in the same 81st Street office for 15 years, but Binder said the two-pronged approach would help the firm better serve both the Upper West Side and Morningside Heights. “We think both markets deserve their own office,” Binder said. The new office brings the Bellmarc Group’s total number of Manhattan offices to eight. By Guelda Voien

Craig Caggiano joined the firm as executive director. He was

Retail condo specialist launches new firm

evin Salmon, formerly of the commercial brokerage Salmon & Marshall, has launched his own Manhattan company, Khizer Salmon Real Estate Professionals. The new firm will focus on retail condo and multi-family building sales in New York City and the tristate area. Khizer Salmon has set up shop in a 1,000-square-foot space at 505 Park Avenue, where Salmon works with two other agents and a marketer. Salmon, 40, began his career in 1999 at Marcus & Millichap’s Manhattan office. He rose steadily through the ranks, eventually becoming the firm’s vice president of investments. In 2009, he formed Salmon & Marshall with a Marcus & Millichap colleague, Matthew Marshall. The two decided to part ways last year, though Salmon said the two are still friends. Following the split, Marshall launched Marshall Real Estate. Salmon said his specialty is retail condos. “I would give myself credit for coming up with the concept of making retail condos part of the business plan,” he claimed, adding that he has spent years building a database of retail properties in New York City. Marshall Real Estate, which also focuses on retail condos, is perhaps Khizer Salmon’s main competition, Salmon said, since few firms focus on that market segment, though the investment sales firm Eastern Consolidated did launch a new retail sales division this fall. Kevin Salmon Khizer Salmon has two mixed-use Manhattan buildings currently in contract and is marketing some $30 million in retail condos, including an 11,806-square-foot space at 261 Broadway listed for $9 million. Salmon, whose longtime clients include Ashkenazy Acquisitions and Ascot Properties, said he is also courting some foreign investors. “New York is the place where everyone wants to own retail,” he said. By Sanna Chu 122 May 2013 www.TheRealDeal.com

Colliers International previously leader of the New York City practice group at Travers Realty Corporation. Cresa New York Jim Pirot was hired as senior vice president of project management. He was previously executive director of facilities at the School of Visual Arts in Manhattan. HKS Capital Partners John Chantengco joined the firm as associate broker. He was previously a senior advisor at Triwest Financial Group. Marcus & Millichap Brian Hosey was named sales manager of the firm’s Manhattan office. He has been an associate agent at the firm since September 2010. Murray Hill Properties Christine Emery joined the firm as executive managing director, Yair Staav joined as executive managing director, and Barrett Friedman was hired as director from Lansco Corporation. Darilynne Saunders, former principal at Saunders Realty Advisors, was hired as managing director. Lay Kissling, formerly of Terramont Real Estate Services, was hired as an associate. Swig Equities Anthony Zografos, former general manager at Equity Office Properties, was hired as vice president of property management. Kevin Martin, former chief engineer and assistant building manager for Jack Resnick & Sons, was hired as director of engineering services. Wolf Haldenstein Adler Freeman & Herz Kelly Kulak was hired as counsel by the firm’s real estate department. Compiled by Sanna Chu

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A slam dunk for Cushman Brokerage hires former Duke University basketball player

pect” more than managing the bakery, Zoubek said. “It only seems natural at this point to make it my career.” Zoubek is not the first athlete to take an interest in real estate. Mo Vaughn, the former Red Sox and Mets first base-

WE HE AR D

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n acclaimed basketball player is entering the big leagues … of real estate, that is. Former Duke University center Brian Zoubek, 25, this month will join commercial brokerage Cushman & Wakefield as an associate broker, working with top Cushman executive Bruce Mosler, The Real Deal has learned. The 7’ 1” New Jersey native played four seasons for Duke University’s Blue Devils, a Division I team that won the NCAA championship Zoubek’s senior year. After college, Zoubek was signed as an undrafted free agent by the New Jersey Nets, but injured his back while attending training camp. The injury continually recurred, and in 2012 Zoubek decided to take his career down another path, opening an adorably monikered bake shop, Dream Puffz, in Haddonfield, N.J. But Zoubek also had a longtime interest in real estate. “I’ve always known that I would be involved in real estate in some way,” Zoubek said. “I have been drawn to it my whole life.” For a year while operating the bakery, he invested in and developed single- and multi-family properties on the side. “It got to a point where I was enjoying the real estate as-

also a Duke graduate. Through friends and the school’s alumni network, Zoubek was able to connect with Mosler and join his team of seven office-leasing brokers. Mosler, who played rugby at Duke, said he believes team sports are an excellent preparation for work as a broker. Zoubek “has shown an extraordinary work ethic and a high degree of ability to work in a team,” Mosler said, adding: “I have always been very team-oriented. Any deal I have ever done has been the result of partnering.” Mosler added that there are some perks to pursuing real estate rather than professional basketball. “Look,” he told Zoubek. “A number of your peers in the NBA are earning millions today, but let’s just say that in basketball, you have eight years [until] you are past your peak years.” By contrast, in real estate “in your mid-30s and on … you will be earning seven figures if you are successful, and you will be at the beginning of a long and successful career.” By Guelda Voien

Former Duke University center Brian Zoubek (center) with teammates

man, operates Omni New York, which owns 4,000 apartments in New York City, and Magic Johnson Enterprises — founded by the basketball legend — now owns real estate in 13 states. Mosler, Cushman’s global chairman of brokerage, is

Outdoor space — supersized Hamptons homeowners pile on more elaborate backyard amenities, from spas to full kitchens

ack when “the Hamptons” was “the country,” a backyard used to signify potato fields and fireflies. With the march of progress, pools, Jacuzzis and tennis courts became essential outdoor features for high-end Hamptons homes. Now it’s become de rigueur to make the outside of the house nearly indistinguishable (at least in terms of comfort level) from the inside. Indeed, Hamptonites say that in an acceleration of a trend that’s been going on for some time, new homes are increasingly being built with outdoor living rooms, full outdoor kitchens, screened-in and covered porches — and in some cases even more supersized amenities like wood-burning pizza ovens and spas. “People want to be outside more. They want to have that kind of experience where the outdoor living and indoor living is connected,” said Jeffrey Collé, a veteran homebuilder in the area. At 18 Wainscott Main Street in Wainscott, a 6,800-square-

foot speculative home currently listed for $8.5 million, Collé included a 3,600-square-foot exterior space — larger than many American homes. It includes two porches, a mahogany deck and a pool house with the option to add an outdoor fireplace — if the four fireplaces inside the house are not enough. “It’s a menu,” Collé said. “They can pick and choose wherever they want to eat, where they want to play, wherever they want to sit by the fireplace, wherever they want to watch TV. “Each season people get different, more extravagant ideas,” Collé said. The Corcoran Group’s Susan Breitenbach, who is marketing the Wainscott listing, said developers are finally wising up to clients’ desires for more elaborate outdoor spaces. “I tell all these people building for spec that a lot of people love … the outdoor kitchen and outdoor living space,” she said. Breitenbach is also marketing a $25 million, two-acre East Hampton compound on Further Lane, which includes outdoor pergolas, fireplaces, covered porches, an apple orchard,

Linked by ink Some 37 Rapid Realty agents get

tattoos with the firm’s logo

ll real estate firms hope to establish brand loyalty. But a growing number of Rapid Realty brokers have taken that literally, getting permanently branded with the company logo. No less than 37 Rapid Realty agents and managers now have tattoos featuring the logo of the Brooklyn-based franchise firm, which has about 1,100 salespeople across the New York area. It all started in 2010, when a heavily inked Rapid Realty broker, Adam Altman, had the company logo tattooed on his arm. “I thought it would be kind of tongue-in-cheek,” he said. Plus, he felt that the constant reminder of the firm would keep him working hard. Since then, company founder and CEO Anthony Lolli has encouraged other Rapid agents and franchise owners to follow Altman’s example. Lolli said he pays for all the Rapid tattoos, and offers all newly inked agents the title of

124 May 2013 www.TheRealDeal.com

Agents show off their Rapid Realty tattoos

“Brand Ambassador,” which comes with a 40 percent share of rental commissions — the highest percentage available to agents. (Agents start out at 25 percent.)

The elaborate outdoor space at 18 Wainscott Main Street in Wainscott

a 100-foot-long open-air dining table and a gym in a barn. As with interior spaces, the sky is the limit for the cost of building these exterior spaces. Ernie Cervi, executive managing director in Corcoran’s Bridgehampton office, said a “nice size” outdoor living room can cost upwards of $200,000. Collé said he spent roughly $500,000 alone to construct the exterior space on the Wainscott property. “The outdoor space is now being considered additional square footage to the house,” Cervi said. “You can really take it to a whole other level.” By Sanna Chu

Essentially, “you give yourself an instant raise” by getting a Rapid tattoo, said agent Stephanie Barry, who sports the company’s logo on her arm. Many Rapid agents who have gotten inked see it almost as a team-building exercise, going with groups of their colleagues to get it done. Videos and photos of these “Brand Ambassadors” are uploaded to the company’s Facebook page. “You feel like you become part of an elite group,” Barry said. And agents said they aren’t concerned about what happens if they leave the firm. Altman, in fact, now lives in Philadelphia and has left the real estate business, but said he doesn’t mind having a permanent reminder of Rapid. “I don’t have any bad feelings against the company, and I know if I move back to New York, I could work there again,” he said. The tattoo is “a nice way to remember the two years I spent there.” Lolli himself, surprisingly, does not sport Rapid Realty ink. “I’m not a tattoo type of guy,” he said. “But if I was, I’d get one.” By Lucy Cohen Blatter www.TheRealDeal.com November 2012 105

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THE CLOSING

JONATHAN

TISCH

Jonathan Tisch is the co-chairman of the board of Loews Corporation, a publicly traded company started by his grandparents in the 1940s that’s now worth in excess of $50 billion. The company has interests in off-shore drilling, insurance and commercial real estate with a major focus on hospitality. His family also owns 50 percent of the New York Giants. Tisch — the son of late business mogul Robert Tisch — is also chairman of Loews Hotels, a Loews subsidiary which owns and operates 19 hotels in the United States and Canada, including the Loews Regency Hotel at 540 Park Avenue. That hotel is currently undergoing a $70 million renovation, which is slated to be completed early next year. Tisch is also a co-founder of Walnut Hill Media, which invests in movies and TV projects.

What’s your full name? Jonathan Mark Tisch. Date of birth? Dec. 7, 1953. Pearl Harbor Day. Where were you born? Atlantic City, N.J. I spent my early years in New Jersey. Did you move around a lot as a kid? We moved to Miami Beach for one year when I was six. Then, when I was eight, we moved to Scarsdale, N.Y., and from there it was a combination of Westchester and New York City. I went to a prep school called the Gunnery in Washington, Conn. What was your childhood like? Were you aware that your dad and uncle were creating a business empire? Certainly, my siblings and cousins and I were very much aware. My uncle Larry was always referred to as “the inside Tisch” and my father was “the outside Tisch.” Larry was a financial genius and my father was the one who knew everybody.… Today I run the corporation with my two cousins, Andrew and Jim. But there are seven of us — three on my side and four on my cousins’ sides. We were virtually raised as one family. Did you ever consider staying out of the family business? I didn’t go into Loews for many years. I graduated from Tufts University in 1976 and I was hired by WBZ, then Boston’s NBC station. I was a cinematographer and editor. I spent three years there, producing sports, public affairs and children’s shows, and was nominated for three local Emmy Awards. I didn’t win any of them. I’ve since been nominated for two more and didn’t win those either. I’m 0 for 5. I’m the Susan Lucci of my generation. Didn’t you also have a TV show? I had my own show for seven years [called “Beyond the Boardroom with Jonathan Tisch”]. It was the only show where CEOs were interviewed by other CEOs. I did 52 interviews in seven years. Were you ever stonewalled by a CEO? I’m not sure that they always gave me the answers I was

126 May 2013 www.TheRealDeal.com

hoping for. Hopefully I came back with another way of trying to get the information. How long have you been married to your wife Lizzie? Five and a half years. She has a business that [introduces] new designers to clients in New York City. She’s very knowledgeable about the up-and-comers of Paris and London.… She’s very attuned to what people are wearing. How many kids do you have? I have two kids in college from my first marriage and a step-daughter. I first got married in 1988. My ex-wife [Laura] and I are very close. Your first wedding was a big society affair with guests like Barbara Walters. Did you go for something smaller this time around? I’m not answering that. Your family owns a stake in the Giants. What’s it like when they win the Super Bowl? They’ve won twice in the last five years. It’s a truly remarkable experience. In both of our wins, the game wasn’t decided until the final seconds. When you look back at the games, you realize how much could have gone wrong, but it went right. It tells you a lot about life. For my father, a kid growing up starting with not a lot in Brooklyn, to be able to buy half of his hometown NFL franchise, it was wonderful. Until he passed away seven years ago, it brought him so much pleasure to go out to Giants Stadium on a Sunday and stand on the field. You’re currently renovating the Loews Regency. Are you attached to that property? It’s certainly a labor of love. The power breakfast there

goes back more than 30 years to when the federal government was turning its back on New York and the city was about to go broke. The leaders of the day — including my father, Lew Rudin, Felix Rohatyn and others — would gather to talk about how to save New York. My father lived at the Regency, so they had breakfast downstairs. There was a story a while back about whether New York hot shots would return for the breakfast after the renovation. Are you worried that they’ll find another spot? My feeling is not only will they come back, but they will be so pleased with what they see that the fact that we inconvenienced them for 10 months will be a distant memory. Speaking of power breakfast, are you a morning person? I’m usually up by 5:30. I only sleep about five hours a night. Most days I’m at Soul Cycle by 6 or 7 a.m. What are your hotel pet peeves? I don’t think that people should be obsequious when they offer service. Don’t shout in my face that you’re giving me service. What’s been your biggest personal gaffe? Probably some of the dates I went on. The people I dated probably thought it was their biggest gaffe. Who are your friends in the industry? Billy Rudin [son of Lew Rudin] is a dear friend, Jeff Wilpon, whose family owns the Mets, and Jeff Blau at the Related Companies. I’m also fortunate to know Rob Speyer. What’s your biggest vice? French fries from Balthazar and Pastis. By Katherine Clarke

PHOTOGRAPH FOR THE REAL DEAL BY MARC SCRIVO00 www.TheRealDeal.com July 2006

ADVERTISEMENT 425 Park Avenue, 6th Floor New York, NY 10022 Phone (212) 838-3700 Fax (212) 838-1956

AN OPEN LETTER TO THE MANHATTAN BROKERAGE COMMUNITY Dear Fellow Real Estate Professionals: I’ve been called the “Jim Kramer of Real Estate” and I guess that’s pretty accurate, if it means that I’m not afraid to speak my mind. So here it goes… Your firm does not trust you to be independent. In fact, these companies want you to think your success is dependent on the company. That’s simply not true. You, the agent, are the company’s greatest asset. You generate the revenue by bringing in the business. The reality is, the traditional real estate brokerage model in Manhattan has sucked the entrepreneurial spirit out of some of you. Or, as many of you tell me, “It’s all the same sh*t anyway, so why change companies?” These observations are not far from the truth. Firms have the same dependent business model with the same rules, restrictions, and commission splits. That may be fine if you’re one of the .01% that’s being fed company leads, but unacceptable for the rest. The bottom line—has your company, your partner in business who takes 30-50% of your earnings, held up their end of the deal? The answer, for the most part, is a resounding NO! I can’t tell you I have all the answers. However, I can tell you that I took six months to fully vet the Keller Williams business model before taking over as CEO in December of 2011 and I feel compelled to share my findings. If nothing more than to set the record straight for those of you who think, “it’s all the same s*it,” because it’s clearly not! Here’s why: • Make more, keep more. Your commission to Keller Williams NYC is not based upon a percentage, but a capped dollar amount equal to $53,000 every 12 months, based upon your anniversary date with us. Thus, gross $500,000 and keep $447,000. Gross $1,000,000, and keep $947,000! How much of your money did your company keep last year? Did they deserve it? • We allow you complete control over your message. It’s about you, not us. Has your company ever told you how big a logo must be in an advertising piece? We’re not obsessed with promoting the company, instead giving our agents the freedom to promote themselves. You are your own brand! Other companies may preach the same, but then put massive restrictions on how, when and where you promote yourself. • Our board of directors, who meet monthly to discuss and vote on key operating strategies for the company, consists strictly of agents like you. We’re a company led by agents, for its agents. As the ones driving revenue for the company, shouldn’t you have some authority as to how that money is spent? • A huge network of agent-to-agent referrals awaits you as Keller Williams is now the largest real estate company in the United States with 700+ offices and 80,000 agents. From Beverly Hills and Short Hills to Boston, Scottsdale, and Palm Beach, agents connect directly with other agents passing along qualified referrals. No corporate relocation department to compete with and no management a**-kissing required. • We’ve recently launched internationally in fourteen countries. Thirty more international marketplaces are planned over the next 24 months, making us a major global brand in a very global city. Do you want access to international referrals? We have them! • We give almost 50% of the company profits back to you, the agent.You already contribute to the company’s growth with your influence in the marketplace, but you’ve never been compensated for your contributions. We give you a lifetime opportunity for passive income that could equal 100k+ annually! • Keller Williams is a training and coaching company that just happens to be in the real estate business. We wrote the book, The Millionaire Real Estate Agent, on running a successful real estate business. We’re so confident you’ll be blown away, that we invite you to attend any of our sessions, including our sales meetings. • If you believe that your work environment matters and that collaboration versus cut-throat competition is the proper way of doing business, then you need to spend a few hours at our office. Our positive energy is contagious! • We’re expanding throughout Manhattan – four new offices are on the way, which will be spearheaded by top producing agents like yourself. Do you want to be part of an office’s core group launch and board of directors? • The Manhattan Region has a diverse ownership group consisting of our top corporate executives, including Gary Keller himself. What this means for you? The largest privately held real estate company in North America is financially committed to reinventing real estate in Manhattan. I know what you’re thinking: sounds too good to be true. What about those fees I hear about? No, we don’t charge for photo copies. No, we don’t nickel-and-dime you. Let’s do the math together and you’ll see how much more money you put in your pocket. If you’re a producer, it’s not even close. I’ve been self-employed for the past 22 years. I’ve been a salesperson my entire life. I’m an entrepreneur who has great respect for you, the challenges you face, the support you need and deserve and the environment necessary to make this business just a little more fun. I also understand that without you, our industry doesn’t exist. You make the company, not the other way around. Don’t ever think for a moment you’re not the reason your customers and clients do business with you. Take the first step to taking back control of your business and the industry which you’ve come to love. Call me for a confidential and exploratory meeting. Your Partner in Business,

Eric Barron CEO, Keller Williams NYC facebook.com/kwnewyorkcity twitter.com/kwnewyorkcity #kwnyc

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