Page 1

18

Developers drool over Bushwick

20

Too much NYC landmarking?

28

A return of ‘hidden’ loans for luxe co-ops

32

Brokering in your own building

108

Real estate players party

THEREALDEAL

www.TheRealDeal.com

Life after Dewey Where real estate lawyers landed as firm crumbled

BY DAVID JONES By the time Dewey & LeBoeuf filed for bankruptcy late last month, nearly every attorney from its onceformidable SPECIAL REPORT real estate practice, including hotshots like Stuart Saft, had jumped to new firms. In doing so, they scattered a roster of impressive industry clients. Inside: a look behind the meltdown and who landed where.

N EW YO RK R E AL E S TAT E N E W S

Vol. 10 No. 6 June 2012 $3.00

Manhattan’s top firms Annual ranking finds more agents, pricier listings and a new boutique king

Benefiting from Facebook’s flop Some NYC residential brokers are taking comfort in Facebook’s flopped IPO last month. They say real estate will get a boost from investors looking for a Wall Street respite. But is the optimism warranted, or is it just Facebook-style hype? See page 16.

Cash cows NYC landlords with the most profitable portfolios

BY ADAM PINCUS How lucrative is it to own a NYC skyscraper? This month, TRD undertook a first-ever analysis of which firms generate the most income from their office portfolios. Top finisher Vornado rakes in a staggering $918 million a year.

Midtown South lifts rest of office market The tech craze in Midtown South is helping fuel office space absorption in Manhattan overall, with Midtown and Downtown lagging. See page 24.

See story on page 52

A look at the complex web of players needed to close a deal BY LEIGH KAMPING-CARDER NYC’s residential market is a web of interconnected players relying on each other to get deals done. This month, we untangle that web. See story on page 50

Men on the move: Town Residential founder Andrew Heiberger (left) and Core founder Shaun Osher (right)

BY LEIGH KAMPING-CARDER listings has shot up. Meanwhile, Andrew Heiberger’s Manhattan’s residential brokerage heavyweights, al- one-and-a-half-year-old company, Town Residenmost across the board, have retained agents or added tial, cracked the list for the first time with nearly 270 to their ranks since last year, according agents. And on the boutique firm front, F EATURE S TORY to TRD’s annual ranking of ManhatShaun Osher’s Core knocked Upper East tan’s largest firms. And while the number of listings Side stalwart Leslie J. Garfield from its top perch. they’re marketing is down, the dollar value of those See story on page 36

Paycheck confidential TRD breaks down industry salaries to see which real

Barbara Fox on cold-calling celebrities See page 110

MetLife announced plans 107 years ago this month to build what’s now called the Clock Tower. For a short period it was the tallest building on Earth. See page 58.

AT A GLANCE

See story on page 30

The real estate system

FACT

After a few years of relative quiet, the East End has seen a flurry of commercial activity. This month, TRD delved into the deals behind a slew of Hamptons’ hotels and clubs, including Montauk’s Surf Lodge, which just changed hands. See page 46.

‘Ringing’ in a

brand new era

estate pros get the biggest (and smallest) pieces of the pie

Will a legal battle unravel the coveted Ring portfolio?

BY C.J. HUGHES The subject of salaries may be the last holdout in today’s share-everything society. Even more reason to shine a light on who makes what in the real estate industry. So this month, TRD took inventory of compensation in a broad cross-section of real estate jobs, from CEOs to social media directors. What we found is that while there are plenty of execs and superbrokers who make seven-figure salaries, not everyone in the industry can afford a private jet.

BY ADAM PINCUS Michael Ring has been locked in litigation with the Tabak family for a year, trying to keep his full stake in the prime (but largely empty) 14-building portfolio he owns with his brother, Frank. This month, TRD sifted through court documents to piece together how Ring ended up in this spot and what the Tabaks might do if they win.

See story on page 60

Behind the deals for Hamptons hot spots

See story on page 42

The Surf Lodge in Montauk

Bidding up rentals Brokers say they are starting to see more bidding wars —which are normally associated with sales — for pricey rentals. See page 44.

www.TheRealDeal.com

HEIBERGER-OSHER AND FOX PHOTOGRAPHS BY MARC SCRIVO; ILLUSTRATION BY DEREK ZAHEDI


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Highlights SPACE LIFT

J U N E 2 0 1 2

16

The optimism debate

18

Drooling over Bushwick

20

Too much landmarking?

The lessons real estate brokers can learn from the botched Facebook IPO.

20

Despite zoning issues, residential developers want a piece of the action. The city has been under a microscope lately for what some in the industry say are overzealous preservation practices.

The Borough Hall Skyscraper District in Brooklyn Heights

22 Dennis Russo rocks out The co-chair of Herrick Feinstein’s real estate department is an avid guitar collector, as evidenced by his photo with Slash of Guns N’ Roses.

Dennis Russo

words... 26 InThistheir month’s funniest and most insightful comments. Since its construction in 1982, the Jacob K. Javits Center has been one of the world’s leading examples of spaceframe design. But the I.M. Pei & Partners-designed exhibit space needed updating to put its best face forward for the 3.5 million visitors it receives each year. So owners engaged Epstein Global and FXFowle Architects, who developed the recladding program that is dramatically increasing the building’s transparency and energy efficiency. Targeting LEED Silver with a glazing system that will enable the building to exceed energy code requirements by 25 percent, the new face of Javits proves that being old doesn’t have to mean retiring.

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for “unrecognized” residential loans? 28 AThecomeback secretive loans reappear into NYC market — albeit slowly.

30

Life after Dewey A behind-the-scenes look at where real estate attorneys landed as the once-high-profile firm crumbled.

Stuart Saft, who fled Dewey & LeBoeuf for Holland & Knight

32

Doing deals in pajamas

34

Good news for condo buyers

34

Chelsea Hotel roadblock

In today’s market, brokers say living on-site can help secure listings.

32

The FHA is readying changes that could make more borrowers eligible for low down-payment-insured loans.

The Chetrit Group’s proposed rooftop plans could be stymied by the city.

36

Prudential Douglas Elliman’s Laura Cao in her apartment at 101 Warren Street.

the luxury market 36 Chasing TRD’s annual ranking of biggest firms finds that brokerages have pricier listings and more agents.

breakthroughs 40 Boutique In the world of Manhattan boutique Architect: Epstein Global, FXFowle Architects Photographer: Enclos

8 June 2012 www.TheRealDeal.com

From left: Andrew Heiberger’s Town cracked the biggest firms list; Shaun Osher’s Core was the top boutique brokerage.

firms, a new company is king. Core knocked Leslie J. Garfield from its perch.


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Highlights continued in” a new era 42 “Ringing Could the Ring brothers’

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42

Manhattan portfolio finally be changing hands?

for rentals 44 Battling Landlords, brokers see more

Frank Ring, of F.M. Ring Associates

bidding wars for pricey units..

46

The hopping Hamptons

48

Meet the landlord

46 The Surf Lodge Inn, which just sold to tech entrepreneur Michael Walrath.

50

A look at the real estate deals behind the latest, trendy East End hot spots.

Park Slope property owner Michael Pintchik, on reshaping a neighborhood.

The real estate ecosystem The Real Deal maps out the complex web of relationships that are essential to closing a residential deal in New York City.

52

Skyscraper kings in NYC

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A ranking of the firms with the richest Manhattan office portfolios — and the buildings that are throwing off the most cash for them.

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Paycheck confidential TRD breaks down industry salaries to see which jobs are getting the biggest piece of the pie.

16

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

24

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

72

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

77

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

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100

Calendar of Events Check out this month’s activities.

104

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Up all night 108 The nightlife spots where NYC industry players can be found after hours. Think 1Oak and Provocateur.

110 ���������������������������� ��������������������������������������������������� � � �������������������������������

10 June 2012 www.TheRealDeal.com

Foxy lady Barbara Fox talks about beating “the crap out of a rock,” the embarrassment of reality television and more.

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

106

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

108

We Heard A lighter look at industry buzz.


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THE REAL DEAL N E W YO R K R E A L E S TAT E N E W S PUBLISHER Amir Korangy EDITOR-IN-CHIEF Stuart W. Elliott MANAGING EDITOR Jill Noonan DEPUTY MANAGING EDITOR Candace Taylor ART DIRECTORS Ronald Gross, Derek Zahedi SENIOR REPORTER Adam Pincus REPORTERS Leigh Kamping-Carder, Katherine Clarke WRITERS Melissa Dehncke-McGill, C.J. Hughes, David Jones, Adam Piore PRODUCTION MANAGER & RESEARCHER Linden Lim WEB PRODUCER Adam Fusfeld EDITORIAL ASSISTANTS Guelda Voien, Zachary Kussin ILLUSTRATORS David Cole, Yishai Minkin PHOTOGRAPHERS Max Dworkin, Michael Toolan, Marc Scrivo DIRECTOR OF MARKETING OPERATIONS Yoav Barilan ASSOCIATE SALES DIRECTOR Ross Fox ADVERTISING SALES Eran Evron, Abi Laoshe, Joseph Paci, Robert Stearns, Michael Stern WEBMASTER Nima Negahban ACCOUNT COORDINATOR Kenneth Cyrus ADMINISTRATOR Junaid Zahid CIRCULATION Paul Destanko DISTRIBUTION Mitchell Newman, Michael Presto VIDEOGRAPHER Toni Comas ATTORNEY Barry J. Friedberg Trachtenberg Rodes & Friedberg ACCOUNTANTS William T. McCallum, CPA, P.C., Christine Wang

The Real Deal is a registered trademark of Korangy Publishing Inc. Copyright © 2012. 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.

12 June 2012 www.TheRealDeal.com


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EDITOR’S NOTE The baffling behavior of the Rings

A

s a business publication, we usually write about people who try to make money. So it’s interesting when you come across members of the real estate community who, from the outset, seem to have a completely different goal in mind. I’m talking about the ongoing saga of the notorious Ring brothers, who reporter Adam Pincus writes about on page 42. The brothers, Frank and Michael, co-own 14 prime office buildings, most of them in Chelsea and Gramercy, that are mysterious relics of a bygone era. As sharks circle, the coveted portfolio sits nearly 90 percent vacant in the middle of the tightest commercial market in the country, and the buildings have fallen into less-than-prime condition. The brothers, who are both in their 60s, have never gotten their act together to decide what to do with the buildings after taking over control from their father around three decades ago. Now, a brief, failed attempt to change course and renovate may result in them eventually losing control of the properties. Up until The Real Deal first spoke to Frank Ring, who runs F.M. Ring Associates, a few years ago, no major media outlet had questioned why so many buildings sat empty. This month we look at why a portfolio that could bring in $40 million in rent annually, if leased up, could, according to sources, instead lose $1 million this year. Why didn’t the brothers initially sell the estimated half-billion-dollars worth of real estate, rather than leaving a vast fortune on the table? (“I wish I could make as much money as Frank Ring has lost,” quipped one broker.) Some say the firm is notoriously difficult to negotiate with, making it virtually impossible to ink leases. The big question: Why? “The [buildings] have been neglected,” one broker told TRD in a web story last year. “I’m not quite sure why. I’m not sure anyone knows why.” Forgive my psychoanalysis, but the answer may be more psychological than economic. To me, it seems like a version of “Grey Gardens” — the famous documentary

The story of the brothers seems like a version of “Grey Gardens,” albeit a buttoned-down, corporate one.

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about Jacqueline Onassis’s aunt and cousin, who lived in a decaying Hamptons mansion for years — albeit a buttoned-down, corporate take on the story. There seems to be an irrational preservation of the past, too, the real estate equivalent to Norman Bates saving his mother’s corpse in “Psycho.” Or a hoarding like that by Manhattan’s famed Collyer brothers (look them up), not of junk, but of valuable space. Indeed, it was the Rings’ father Leo who began accumulating Manhattan office properties in the 1940s. When he passed away in the 1980s, Frank began managing the portfolio. In the West 20s, “F.M. Ring Associates” is still emblazoned on the sides of numerous buildings. The large, fading mural-like advertisements look like something from an earlier time, as reporter Gabby Warshawer noted in an earlier piece. Maybe the brothers wanted to keep their space mostly untouched as a memorial to Leo. That would make more sense than their ostensible economic reasons, anyway. Frank Ring, who has claimed that the properties are more valuable if they stay vacant due to tax reasons, has implied that tenants who left have been hard to replace. He said if the brothers had sold during the boom, they might have invested the profits in the stock market or with Bernie Madoff and lost it all. The fate avoided, Frank Ring said, involved “seeing our entire equity disappear.” Michael Ring — who also worked at Helmsley Spear for 40 years — finally broke out of Grey Gardens when the properties were on the verge of becoming cash negative. He signed an agreement with the Tabak brothers last year to buy out a controlling portion of his stake and renovate the properties. But at the last minute, he tried to back out. Yet the door had been opened, and the Tabaks (reportedly advised by broker Doug Harmon) are trying to wrest control through clever legal maneuvering. Developer Gary Barnett has also edged his way in. The sharks are circling, and that’s where we pick up with our story on page 42. Check it out. Meanwhile, there are plenty of other great stories to feast on in this issue — about people who are making money. Our in-depth story about real estate executive compensation — sure to be discussed around the water cooler — begins on page 60. There is a first-ever survey of the most profitable office buildings in Manhattan in a story beginning on page 52. And check out our closely followed annual ranking of the biggest Manhattan residential brokerages beginning on page 36. Enjoy the issue!

Stuart Elliott 14 June 2012 www.TheRealDeal.com


RE S I D E N T I A L MA R K E T

BY LEIGH KAMPING-CARDER midst a storm of hype and conflicting expectations, Facebook went public last month, allowing average investors to buy a piece of the social networking juggernaut at $38 per share. In the days that followed, however, the company’s stock price slid, newly minted shareholders launched a class-action lawsuit claiming underwriters kept dam-

A

The optimism debate Can real estate brokers learn a lesson from the botched Facebook IPO?

aging information from the public while tipping off favored clients and federal regulators pledged to investigate the alleged improprieties. The news came about a week after JPMorgan Chase CEO Jamie Dimon admitted that his bank, largely unscathed by the economic crisis, had lost $2 billion on a risky trade, once again underscoring the fallibility of the nation’s financial institutions.

The whole mess had some real estate brokers taking comfort in the perception that investing in New York City homes is a refuge from the stomach-churning lurches of Wall Street. “Any blip in Wall Street, such as the JPMorgan story [last] month, reinforces real estate as the place to secure your equity,” said Eddie Shapiro, CEO of Nest Seekers International. In fact, a new feeling of opti-

“Any blip in Wall Street, such as the JPMorgan story [last] month, reinforces real estate as the place to secure your equity.” EDDIE SHAPIRO, CEO, NEST SEEKERS INTERNATIONAL mism has recently taken hold of some brokers (already an optimistic bunch), fueled by the sense that buyers are moving quickly, sellers are confident they can get good prices and inventory has yet to exceed demand. “About six weeks ago, it seemed as though someone had thrown a switch and the market heated up overnight to a degree we have not seen in many years,” said Michael Signet, director of sales at Bond New York. “Something new has been added to the equation that we have not seen in a long time — a sense of urgency.” But is the optimism warranted, or is it Facebook-style hype? Sales have picked up in the last few years, only to tumble a few months later. In 2009, for example, the federal first-time homebuyer tax credit sparked sales at the low end of the market only to have the effect wear off when the credit expired. More recently, stable sales last summer dropped off in the winter after Standard & Poor’s downgraded the U.S. debt and the European debt crisis rocked the financial markets. Some brokers say this time is different, and many of the leaders of Manhattan’s largest brokerages reported a flurry of sales activity in the last few months (see story on page 36). Gordon Hoppe, a senior vice president at Corcoran Sunshine Marketing Group, noted that the outlook for new development, where demand outpaces the supply of new condominium units, is particularly rosy. The number of signed contracts is up 29 percent compared to the same time last year, he said. “Consumers are starving for good news,” said Douglas Heddings, founder of the Heddings Property Group. “The current Continued on page 94

16 June 2012 www.TheRealDeal.com


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A new Soho?

Despite zoning issues, developers drool over Bushwick BY GUELDA VOIEN uch like once-obscure Soho in the 1980s, Bushwick is a magnet for today’s artists and hipsters. And real estate players are now hoping to get in on the action. Developers are salivating over sites in Bushwick, industry experts said, especially as nearby Williamsburg has transitioned from a gritty industrial area to an expensive residential neighborhood. Bushwick is still relatively affordable in comparison, but is seeing strong demand for rental housing. “It’s no coincidence that I got three or four calls in the last month about Bushwick,” said Ian Lester, a Manhattan attorney who represents a number of commercial developers.

M

Jonah Bokaer’s Chez Bushwick, a former knitting factory turned performance space. The area off the Morgan Avenue stop on the L, in particular, has seen a bevy of new retail, including hipster holy grail Roberta’s, a pizza place that opened in 2008. Meanwhile, the Knick, a “green” 49-unit condo developed by the Hudson Companies, opened last spring. Mayer Schwartz’s CastleBraid Apartments, a 144-unit rental catering to artists (“I believe there is a kiln” in the building, Behin said), opened in 2009 and is fully rented. Rents at CastleBraid range from $1,900 to $3,500 per month, according to the building’s leasing office. These changes have developers anxious to snap up property in Bushwick, which

The CastleBraid apartments at 114 Troutman Street in Bushwick

But Bushwick’s longtime identity as an industrial area presents obstacles to development, especially when it comes to zoning. Unlike Williamsburg, the city seems committed to maintaining Bushwick’s industrial zoning, experts say, which could prevent the building of large-scale housing developments in the prime northwest corner of the neighborhood. And for right now at least, Bushwick is significantly “rawer” than Williamsburg, which sometimes comes as a surprise to developers, said David Behin, president of investment sales at brokerage MNS. “A lot of developers want to put money out in these [North Brooklyn] neighborhoods,” Behin said. “I can see the reaction when we get to Bushwick, though. For a lot of them, it is too pioneering.”

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The swath of Brooklyn known as Bushwick lies east of Williamsburg along the L subway line and southeast along the M train. (The northwest portion is also sometimes called “East Williamsburg.”) The area was rocked by “white flight” in the 1960s and riots in the 1970s after New York City’s famed blackout, and was long considered blighted. But in recent years, it has attracted artists and event venues like

they believe could be the next hot residential neighborhood. In addition to Schwartz and Hudson, developers active there include Henry Development and Cayuga Capital, sources said. These builders are, not surprisingly, attracted by how Bushwick developments pencil out, brokers said. In the area of Bushwick that’s south of Flushing Avenue, the purchase price of development sites is rarely above $80 per square foot, said Neil Dolgin, president of Dolgin Kalmon Affiliates, which leases and sells commercial buildings extensively in Bushwick. In the more gentrified areas to the northwest, prices are closer to $125 per square foot, he said. With rentals in the neighborhood fetching as much as $40 per square foot per year, those numbers make sense, brokers said. For redevelopment projects, Dolgin said, a developer can expect to make back the initial investment and borrowing costs in less than 10 years, similar to the timeframe in hotter Brooklyn neighborhoods. According to Behin, the Jefferson stop on the L — one stop east of Morgan — is the next obvious area that young artists and professionals will begin flocking to. That’s good for developers because “you have a lot Continued on page 96

www.TheRealDeal.com March 2010


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The Bulletin Board

Too many landmarks? Compiled by Russell Steinberg

Picking up the pace

The Landmarks Preservation Commission has been under a microscope lately, as developers fight a recent uptick in historical designations. The LPC has been increasingly active since Mayor Michael Bloomberg took office, creating 27 historic districts since 2002 — more than under any other administration. (New York Observer) LPC Chairman Robert Tierney

LPC under attack

NYC developers have begun resisting the administration’s attempts to landmark buildings and create new historical districts. In response to their complaints, the City Council last month held a hearing on a bill that would require LPC officials to weigh potential lost revenue from a new development before landmarking it. Another bill would require City Council approval of historic designations. (DNA Info)

Brooklyn Heights in crosshairs Despite strong opposition, the LPC this year approved the Borough Hall Skyscraper Historic District. Critics, including the Real Estate Board of New York, lobbied aggressively against the 21-building designation, arguing that it would increase costs for landlords and suppress development.

Borough Hall Skyscraper Historic District

Taking a ‘Toll’ Another dispute is taking place on the Upper East Side, where residents are pushing for the landmark designation of two 156-year-old buildings — 1108 and 1110 Park Avenue — in hopes of blocking a 15-story development project by Toll Brothers that would demolish them. And this month, the LPC will consider creating an East Village/Lower East Side historic district. Several churches and synagogues in the area oppose the designation, arguing it will make building repairs more expensive. (New York Times, Wall Street Journal)

1108 and 1110 Park Avenue

Preserving the past

Historic decisions

The Bloomberg administration has ratcheted up the LPC’s funding. The commission’s annual budget is now $4.8 million, more than 60% higher than it was in 2003. During that time, staffing has jumped 40%, to 60 full-time employees. (New York Observer)

Mayor Robert Wagner established the LPC in 1965, in response to New Yorkers’ growing concerns over incidents like the 1963 demolition of Pennsylvania Station. Since then, the LPC has landmarked over 27,000 buildings and created 107 historic districts. The law requires the commission to include at least one resident of each borough.

Mayor Robert Wagner

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PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN

This typewriter belonged to Russo’s uncle, an intelligence officer in the U.S. Army in World War II. “This typewriter has traveled through most of the battles in Europe,” Russo says.

Russo has played guitar for 35 years and says collecting guitars is his passion. He has roughly 150 of them, including guitars previously owned by Peter Frampton and B.B. King. This redwood guitar was custom-made by famed manufacturer Fender Stratocaster using wood from the deck of his Fire Island home.

This photo of Russo with Guns N’ Roses guitarist Slash was taken last year at the National Association of Music Merchants show. “The guitar companies invite me because they know I buy guitars,” Russo says. At another show earlier this year, he met up with Ben Friedman, president of real estate firm Abacus Capital Group.

Russo found this drawing of Julius and Ethel Rosenberg — which he later discovered had an inscription written by Pablo Picasso — in a house he bought on Fire Island. The former owner’s mother, a lawyer, had represented the Rosenbergs when they were convicted of passing secrets to the former Soviet Union. “Picasso, who was a communist sympathizer, gave this to her as a present,” Russo says.

the

Desk

This plaque, awarded to an NYPD precinct in 1938, is part of Herrick’s collection of architectural artifacts, which also includes an original 1913 copper ornament from the Woolworth Building.

At

Russo

As a law student in the late 1980s, Russo started renovating NYC brownstones and multifamily buildings with his cousin and childhood friend. This cast-iron gate is from the first building they renovated in Fort Greene, Brooklyn. Today, Russo is on the investment committee at Herrick, one of the few firms where partners actually invest in real estate. The firm currently has interests in about 40 properties.

A photo of Russo riding a dirt bike with client Richard Meilman, of Meilman Properties, in upstate New York last October. “He is teaching me how to ride dirt bikes — yes, at age 50.”

This uniform belonged to Russo’s late father, a longtime firefighter in Brooklyn and Queens. “My family is — being Irish — cops and firemen,” Russo says. “My father put out all the fires in Brooklyn when it was burning to hell. Great guy — not a pencil pusher.”

ennis Russo may be co-head of the real estate department at law firm Herrick, Feinstein — which has one of the biggest such practices in the city — but he’s not your average Ivy League attorney. The son of a firefighter, he went to St. John’s University Law School in Queens, where he grew up. Russo — who specializes in workouts, restructurings, joint ventures, acquisitions, dispositions and development projects — now oversees a team of more than 50 lawyers. He has a host of high-profile clients, including Hersha Hospitality and Sherwood Equities. Russo’s team also handled Hersha’s $104 million purchase of the Hyatt Union Square and Gemini Real Estate’s development of the new Gem Hotel on 13th Street, which is slated to open later this year. The amateur musician is also a landlord and developer in his own right, owning about 450 residential apartments, mostly in Brooklyn, as well as several small retail properties in the outer boroughs. B y G uelda V oien

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of:Dennis

Russo was given this clock when he left Herrick in 1999 for Sonnenschein Nath & Rosenthal. He returned to Herrick in 2003, and took over as the head of the real estate practice last year.


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Midtown South lifts overall market Aided by tech leasing streak, the area is home to vast majority of Manhattan’s office absorption BY ADAM PINCUS idtown South has done the heavy lifting so far this year to bring down the availability rate in the Manhattan office market. Midtown and Downtown, on the other hand, have not performed as well. In fact, Midtown South — which has gotten a lot of attention lately because of its popularity with technology and media firms — has represented 73 percent of the positive office space absorption in Manhattan through the first four months of the year, commercial data firm Cassidy Turley reported. “Midtown South is in high demand,” said Richard Persichetti, vice president of research at Cassidy Turley. Through April, the Midtown South market — which includes Chelsea, Flatiron, Soho, Hudson Square and Tribeca — saw 630,000 square feet of positive absorption. During the same period, there was just 860,000 square feet of positive absorption for Manhattan overall, Cassidy Turley data showed. (Midtown saw slightly positive absorption, while Downtown saw negative.) Overall, the market was stable, even as some European economies stumbled. For Manhattan overall, the average asking rent rose to $54.04 per square foot, up $0.39 per foot, while the availability rate — which measures space available now or in the next 12 months — edged down slightly to 11.5 percent, down 0.1 points, preliminary data from commercial firm Colliers International showed. “The market is holding up a little better than some of the scare stories that were out in the early part of the year [predicted],” said Peter Kozel, executive managing director and chief economist for the New York office of Colliers. “It’s not really a strong upward movement, but it’s fairly solid.”

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Some of the city’s largest tenants inked deals in Midtown last month, including Citigroup, which renewed 500,000 square feet at Boston Properties’ 601 Lexington Avenue. But even that deal did not match the 1.3 million-square-foot renewal and expansion that media giant Viacom locked in a month earlier in April at SL Green Realty’s 1515 Broadway in Times Square. And commercial brokers said the disparity was not just at the top of the market. The overall Midtown market, they said, seemed a bit slower last month. “There is not a sense of urgency [in Midtown] on behalf of the tenant community, and the landlords are not as bullish as they

Manhattan office stats AVAILABILITY RATE

AVG. ASKING RENT

May ’12 Apr ’12

Manhattan 11.5% 11.6%

$54.04 $53.65

May ’12 Apr ’12

Midtown 11.9% 11.9%

$66.49 $66.14

May ’12 Apr ’12

May ’12 Apr ’12

Midtown South 8.2% $43.09 8.3% $42.28 Downtown 15.8% 16.1%

$44.85 $44.96

Source: Colliers International

were at the end of 2011,” said Bruce Weinberg, executive managing director at Cassidy Turley. He said he expects an uptick later in the year. Despite a slightly more downtrodden mood among brokers, the statistics showed an improving market. The average asking rents for Midtown rose to $66.49 per foot, up $0.35 per foot, while the availability rate remained flat at 11.9 percent, Colliers figures showed. Adding to that improvement was construction management company RC Dolner Construction, which signed a new office lease last month at 192 Lexington Avenue at the corner of 32nd Street, CoStar Group data shows. (Some of the city’s brokerage firms consider that Murray Hill location to be Midtown South, but CoStar considers it Midtown.) The construction firm — which has worked on high-profile projects such as the Hyatt’s Andaz 5th Avenue and the Soho Grand Hotel — took 8,268 square feet on the third floor for 10 years, CoStar data showed. Weinberg represented the landlord at the property, a company called Cres, while Edmond Levy and Samantha Greene, of Cornerstone Real Estate Investments, represented the construction firm.

Midtown South Internet firms have not let up on their leasing in Midtown South. Last month, Groupon competitor LivingSocial went from a sublease to a direct deal in the neighborhood. LivingSocial leased the entire fifth floor at the 60,405-square-foot 101 Fifth Avenue, at the corner of 17th Street, in a three-year Continued on page 92


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In their words...

The month’s funniest and most insightful comments from real estate pros

“I am a pimple on this elephant’s ass.” Thor Equities’ Joe Sitt at a Young Jewish Professionals event last month, comparing himself to Related Companies CEO Stephen Ross.

“We don’t do anything I cannot ride a bicycle to.” Two Trees’ Jed Walentas, on his company’s New York–centric approach to real estate.

“Now we’re starting to see outside of coffee shops, like, six strollers.… I like kids, but kids kind of bum me out. … I mean, people need to have kids. It’s just, like, you kind of go, ‘Aw, where are the adults having fun?’ Instead, they’re running around asking, ‘Do you need some milk now?’ ” Comedian Reggie Watts, on living in Williamsburg. (Curbed via College Times magazine)

“Our trade is emotions, and our tenten der is tears and laughter. We’re not lumberjacks. I’m not selling wood.”

Soho resident Camille Billops, 78, on the crowded sidewalks in the neighborhood. (New York Post)

“We are going to be opening up in Harlem.… I shouldn’t have said that.” Whole Foods co-CEO John Mackey, mistakenly letting the news slip while answering a question during a talk at the chain’s Tribeca location. (DNAinfo)

Nest Seekers broker and reality TV star Ryan Serhant.

“Thirty percent [of people moving out of their apartments in the first quarter] gave us the reason ‘increase too expensive,’ or ‘my rent’s just too damn high.’ ” Frederick Tuomi, executive vice president for property management at landlord Equity Residential. (Wall Street Journal)

“You have to be rich. Not as rich as in Manhattan, but rich.” Aroza Sanjana, president of Park Slope’s Warren Lewis Realty, on the requirements for buying a home in brownstone Brooklyn. (Daily News) 26 June 2012 www.TheRealDeal.com

“It’s a horror. Everybody wants to make money down here, like we’re whores.”

“I walked in and felt transported, like I wasn’t in Manhattan anymore. It just felt womblike.” Actress Chloë Sevigny, describing the first time she saw her East Village apartment, which is now on the market for $1.7 million. www.TheRealDeal.com August 2006 00


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Negative pledge financing, popular during the boom, is now creeping back into the high-end residential market — albeit slowly

BY KATHERINE CLARKE ecord-low interest rates have caused mortgage application volume to skyrocket across the U.S. recently. But in the drawing rooms of whiteglove Park Avenue co-ops, that means very little. The city’s priciest co-ops have long restricted the use of mortgages to purchase apartments in their buildings, requiring buyers to plunk down a high percentage, if not all, of the purchase price in cash. But now, after all but disappearing in the wake of the credit crisis, negative-pledge loans — mortgages specially structured to allow the borrower to finance what looks like an all-cash deal without the knowledge or approval of the board — are slowly being seen in the market again. The loans, which were popular during the 1990s and early aughts, are completely legal and only violate contracts with the co-

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some of which knew about the practice but were turning a blind eye to it — clamped down for fear that the borrower would end up in foreclosure, which would damage the reputation of the building. Such an instance notoriously surfaced last year, when it was revealed that high-profile developer Kent Swig took out two loans on a unit he owned at the exclusive co-op 740 Park Avenue, an all-cash building. In August 2011, Bank of America sued Swig over an unpaid loan at the property.

Blind eye during boom And while some brokers say they are seeing more unrecognized loans, they are still nowhere near their boom-time popularity. Mortgage broker Alan Goldberg, CEO of Welkin Capital Group, said he now receives one or two inquiries about them per month, compared with 10 to 15 before the 2008 financial crisis. Still, that’s an increase over

“We feel more comfortable with [unrecognized loans] than we did when the market was at its low point.” RICHARD MARTIN, GIBRALTAR PRIVATE BANK & TRUST op board. And they are an attractive proposition for wealthy buyers who don’t want to unload a vast amount of cash into real estate, preferring to invest in the stock market or other assets. Some mortgage brokers say they are starting to see an uptick in demand for the loans, which are also called “unrecognized loans,” prompted by low interest rates and the recovering economy. “I just had a phone call about one the other day,” said Rolan Shnayder, director of new development lending at the mortgage bank H.O.M.E. “It was the first call I’d received about it in a long time. The person saw that rates were so low and wanted to take equity out of his property and invest it.” Shnayder said he is now in the process of helping the client secure a negative-pledge loan for the deal, which is a refinancing at an Upper East Side co-op. Still, the environment for these loans — which are not recognized by building boards, but which still use the property as collateral — was significantly altered during the downturn. Not only did banks tighten their lending restrictions, but high-end buildings — 28 June 2012 www.TheRealDeal.com

the number of calls he was getting during the recession, which was zero. And there are currently only two or three New York City banks that offer unrecognized loans, compared to approximately 10 during the boom, he said. Goldberg declined to specify the banks for fear of giving away his secrets, but other sources said Citibank and Bank of New York have been known to issue them. Besides 740 Park Avenue (the building where Jacqueline Kennedy Onassis grew up), brokers said other all-cash Manhattan buildings include the pricey white-glove co-ops 2 East 67th Street as well as several Fifth Avenue buildings at the 812, 1030, 998, 834 and 1020 addresses. Buildings such as 1125 Park Avenue, 50 Sutton Place South and 1185 Park Avenue, meanwhile, only allow financing up to 50 percent of the sale price. Buildings such as these don’t want to face the threat of foreclosure that can come if a borrower fails to make good on loan payments. “Co-ops don’t want that kind of encumbrance or lien against their property,” Goldberg said. Continued on page 90

www.TheRealDeal.com March 2010


PR O F I L E

Life after Dewey & LeBoeuf A behind-the-scenes look at where real estate attorneys landed as the once-high-profile firm crumbled

BY DAVID JONES y the time Dewey & LeBoeuf filed for bankruptcy late last month, nearly every attorney from its once-formidable real estate practice had jumped to a new firm. In doing so, they scattered its roster of impressive clients, irrevocably altering New York City’s legal landscape.

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Rae — at its peak employed more than 2,500 people, including roughly 1,400 lawyers around the world. In the largest law firm collapse in United States history, Dewey has effectively shut down its 1301 Avenue of the Americas headquarters and announced plans to liquidate. The firm is also currently under investigation by the Man-

partners with him. The firm later added Ralph Ferrara, a vice chairman at Dewey and former general counsel of the U.S. Securities and Exchange Commission, along with three of his partners. At the beginning of this year, Dewey had 56 real estate lawyers globally and 28 in New York. At this point, nearly all of them have landed at other firms, taking

Stuart Saft

Stuart Saft, the former chair of Dewey’s global real estate practice and an icon in the world of New York real estate, led the exodus. In late April, he decamped for Holland & Knight along with seven Dewey associates, three paralegals and two legal secretaries. Early last month, a six-person team, including Dewey partners Peter Britell, Gordon Davis and Suzanne St. Pierre, joined the Washington-based law firm Venable, more than doubling that firm’s New York real estate office. A week later, New York–based Schulte Roth & Zabel snagged a 10-person team of private equity and real estate lawyers, including partners Joseph Smith and Marshall Brozost. The departed real estate lawyers are among hundreds of Dewey staffers who’ve found new jobs since a rescue deal with top law firm Greenberg Traurig fell apart in late April. Dewey — created five years ago by a merger between Dewey Ballantine and LeBoeuf, Lamb, Greene & Mac30 June 2012 www.TheRealDeal.com

At the beginning of this year, Dewey had 56 real estate lawyers globally and 28 in New York. At this point, nearly all of them have landed at other firms, taking their clients with them. hattan District Attorney’s office for alleged financial irregularities reported by a group of partners. The firm’s dissolution has profoundly impacted the landscape of real estate law in the city and beyond. Rival law firms in the U.S. and abroad have plucked lawyers and sometimes whole divisions from Dewey. For example, Greenberg Traurig picked up Dewey’s 50-attorney Poland office. In New York, Dewey board member and bankruptcy lawyer Martin Bienenstock went to Proskauer Rose, taking five

their clients with them. Sources said all the firms hiring from Dewey are looking for one thing: to establish a foothold in the New York real estate business in anticipation of the economic recovery gaining full steam. Saft, for example, is “one of the preeminent real estate practitioners in New York,” said Martin Miner, who leads Holland & Knight’s New York real estate practice. “We think having Stuart gives us the opportunity to expand the scope of services we add out of New York.”

The unraveling According to multiple legal sources, the seeds for the megafirm’s demise were sewn by the historic merger that created Dewey LeBoeuf. It all started in 2006, when Manhattan-based Dewey Ballantine, a prestigious but financially troubled law firm in the investment banking sector, announced plans to merge with San Francisco–based Orrick, Herrington & Sutcliffe. Dewey Ballantine had grown over the years into one of the country’s top mergers and acquisitions firms. But when its merger with Orrick fell through, the firm faced plummeting profits and considerable debt. So the firm’s leadership was receptive when approached by LeBoeuf, Lamb — a firm widely regarded as financially sound but lacking Dewey Ballantine’s prestige. Once merged, the newly anointed Dewey & LeBoeuf embarked on a nownotorious strategy of luring new partners with seven-figure, guaranteed contracts, on the theory that these well-compensated rainmakers would generate a windfall of new business. Among the high-profile new hires was Saft, then-chair of the real estate practice at Wolf Haldenstein. (Saft denies receiving a guaranteed salary at Dewey, though several of his colleagues at Wolf Haldenstein say they were offered guaranteed money to come with him.) Snagging Saft was considered a major coup for Dewey. Viewed as one of the top offering plan lawyers in the city, Saft has represented some of the highest-profile real estate projects in New York, including the condo conversions of the Upper West Side’s Apthorp, Manhattan House at 200 East 63rd Street and the Sheffield near Columbus Circle. LeBoeuf, Lamb had a long history of handling real estate deals in the nonprofit and health-care arenas, but Saft’s practice broadened its scope. According to sources inside Dewey, up to 100 partners were given guaranteed deals — some of up to $6 million, annually — at a time when other partners were paid only $300,000 to $450,000. The results of that arrangement are now being etched in the history books: As the press has widely reported, that strategy backfired when the capital markets seized up in 2008. As the high transaction volume that attorneys were used to during the boom began to dry up and clients began to balk at Dewey & LeBoeuf ’s high legal fees, the firm struggled to turn a profit. “Once the world fell apart economically, it never had a chance,” said Davis, www.TheRealDeal.com January 2011 25 PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN


PR O F I L E who spent more than 13 years at LeBoeuf, Lamb before the merger. A specialist in land-use and environmental law and nonprofits, Davis’s clients include Mt. Sinai Medical Center, which he represented in a 2008 deal to sell air rights to Durst Fetner for its residential tower at 1212 Fifth Avenue. Davis said at Dewey, a select group of favored partners were included in decision-making, while others were left to swim against the tide. “If you have a [compensation] range of 15 to 1 between the top partners and every-

staffs ever performed any work for the real estate department’s clients,” Saft wrote in an e-mail to clients obtained by The Real Deal in March. But behind the scenes, sources said, Saft had been complaining for months about delinquent payments from his real estate clients, many of whom were hit hard by the 2008 financial collapse. In many ways, the real estate practice was among the most directly impacted by the economic downturn, with new condo development nearly shutting down and existing megaprojects, like the Apthorp

are rethinking costs, one partner at a boutique Manhattan real estate firm said at least two Fortune 500 companies have contacted them seeking representation. “We think it’s symptomatic of what’s plaguing the big firms,” said the attorney, who asked not to be identified. Another boutique law firm, Heiberger & Associates, which specializes in landlord-tenant cases, is also seeing an increase in business from landlords and commercial tenants looking to reduce overhead. The firm generally charges no more than $300 an hour.

firms, “for our particular group we found a lot of choices.” The group was considering joining Saft at Holland & Knight, he said, but ultimately chose Venable instead. Dewey partners may not be having trouble finding jobs, but the firm’s dissolution has unleashed hundreds of junior lawyers and support staff into a stillshaky job market. And Dewey’s disintegration has likely made it harder for other real estate lawyers to find work — even as the economy begins to improve, sources said. “Clearly the market for real estate law-

Former Dewey & LeBoeuf attorneys now at Venable. From left: Susan Golden, Peter Britell, Gordon Davis and Suzanne St. Pierre

one else, it’s a recipe for disaster,” he said. Jeff Schwartz, a partner at Wolf Haldenstein, said he declined a guaranteedpay offer from Dewey several years ago because such setups tend to “create an ‘usagainst-them’ kind of mentality.” What started out as a mentality is now playing out in the courts. Not only have civil actions been filed by federal regulators claiming Dewey underfunded its pension by $80 million, but a former employee has alleged that the firm failed to warn staffers about the pending closure. According to documents obtained by The Real Deal, when Dewey filed for bankruptcy, it owed $225 million to secured lenders, $50 million to landlords at its office buildings and $40 million to vendors. At the same time, the firm was owed some $255 million in expected payments from its clients.

The real estate group As reports of the firm’s financial and personnel woes surfaced, Saft portrayed Dewey’s real estate group as largely insulated from these troubles. “None of the real estate partners are involved, none of the disaffected partners are real estate partners and none of the disaffected partners nor their PHOTOGRAPH THE www.TheRealDeal.co REAL DEAL BY CHRIS MARTIN 28 MarchFOR 2012

Sources said all the firms hiring from Dewey are looking for one thing: to establish a foothold in the New York real estate business in anticipation of the economic recovery gaining full steam. and Manhattan House, struggling to find buyers. Saft attributed the firm’s problems to the economy, and said other law firms are likely to face a similar fate. “What happened at Dewey was very symbolic of things that happened across the country,” he said. But sources say another obstacle for Dewey’s real estate practice was its high fees. (Saft, for example, told The Real Deal in April that his standard rate is $925 an hour.) In the current economic climate, many real estate clients are willing to forgo a fancy law firm in order to save money, attorneys said. More and more clients are shopping for the lowest possible rates, and are willing to walk if they can find a firm they like in the boroughs or even Long Island to represent them. In a sign that even major companies

“I think people are very open to switching,” said Jamie Heiberger-Jacobsen, founder and president of Heiberger & Associates. “I’ve picked up accounts that I wouldn’t have even thought of approaching years ago.” As a result of these problems, Dewey’s real estate partners have been looking to jump ship for months, sources said. Most of Dewey’s real estate alums are viewed as good lawyers with a lot of “portable business,” and as a result have found work quickly, said one of the city’s top legal headhunters. Jeff Lenobel, partner and chair of the Schulte Roth real estate practice, said bringing on Dewey alums was a natural fit. Much like “when you meet a girl for the first time,” he said, “you know whether this is going to work.” Davis said when it came to switching

yers is picking up, but it’s nowhere near where it used to be,” the headhunter said. Dewey’s collapse is also raising concerns among attorneys and other industry executives about whether other New York law firms are exposed to the same types of problems, which could worsen if the economy fails to turn around in the near term. “My guess is that every large firm right now is looking at their operations in light of what’s happened to Dewey,” said Saft. If nothing else, Dewey’s fate has served as a warning. Attorney Alan Waldenberg, chair of the tax group at Schulte Roth & Zabel, said he was taken aback that such a successful law firm could unravel in such a short period of time. “It’s tragic,” he said, adding that Dewey was “a great law firm, a great institution that had a thriving business.” TRD www.TheRealDeal.com June 2012 31


Doing deals in pajamas

In today’s market, brokers say living on-site can help secure a listing as well as drum up business among neighbors BY JANE C. TIMM

Socializing to succeed

hen Fabrizio Uberti Bona bought a two-bedroom apartment at Williamsburg’s Edge condominium in 2008, he wasn’t just looking for a place to live; he also saw a business opportunity. Since moving into the Edge last spring, Uberti Bona has sold two apartments in the building and currently has five listings there, including a two-bedroom unit listed for $1.25 million. Uberti Bona is one of many New York City real estate agents whose business model involves moving into buildings with the goal of brokering deals there. Recently, this strategy paid off big-time for Brown Harris Stevens’s Kyle Blackmon, who famously sold an $88 million apartment at 15 Central Park West, where he lives. In the increasingly competitive postdownturn market, brokers say this strategy helps give them an advantage over competitors. These days, “the inventory is low and there’s a lot more competition,” said Prudential Douglas Elliman’s Laura Cao, who moved into the Tribeca condo 99–101 Warren Street in 2009. When she first moved in, she did about 40 percent of her deals there and at 202 Chambers Street, the building across the street, she said. Now, those two buildings comprise about 60 percent of her business. Cao, who is currently marketing a twobedroom duplex at 101 Warren for $2.85 million, said living in the building helped her beat out three other brokers to get the listing. When Cao met with the seller, “I presented him [with] the work I’ve done in the building,” she said. “I have a roster of people looking to buy in the building.” Owning a home not only helps land listings, but can make it easier to sell them, said Uberti Bona, who previously lived at the Atelier on West 42nd Street and did “countless” sales there, including one that set a record for highest price per square foot in the building. It’s easier to tap into people’s emotions as a future neighbor, Uberti Bona said. “I really don’t talk about real estate,” he said. “I sell them on my lifestyle.” Plus, brokers who live in the building have access to more information than outside brokers. “When I show an apartment in 101 Warren,” Cao said, “I’m able to tell people about the little idiosyncrasies of the building — like the running group that meets every Saturday morning.”

For years, brokers have purchased apartments as a way to break into certain buildings. For example, Lynda Deppe, head of the Site Realty group at City Connections, bought an apartment in Union Square’s Zeckendorf Towers in 1989, when it was newly built. Since then, she estimates, she’s done more than 500 deals in the building. That’s no accident; Deppe carefully selected Zeckendorf Towers because of the business potential she saw in the luxury building.

W

32 June 2012 www.TheRealDeal.com

For example, Elliman managing director Jan Hashey, who sells and lives at the West Village’s 140 Perry Street, said buyers know she’s “not running away.” “They’ll see me again for at least the next several years,” she said, “so they know I’m bound to be telling the truth.” Of course, buying a unit in the building is just the first step to boosting a broker‘s bottom line. If they want to get clients and referrals there, they have to make an effort to get to know their neighbors. That often means creating social situations that

in the building, what things are selling for, price per square foot, the timeline at which things are renting,” she said. Citi Habitats’ Brian Morgan, who lives and works at the Gramercy Starck on East 23rd Street, agreed. “People recognize me in the elevator and stop me and ask about the building,” he said. “If they want to go out and grab a cup of coffee and just talk about the building, even if they’re not interested in selling, I’m a resource that they can use.” But while brokers say they establish re-

Prudential Douglas Elliman’s Laura Cao in her apartment at 101 Warren Street, where she does the majority of her business.

“I was throwing out the garbage and my neighbor Maria pulled me aside and said that she had been thinking about getting a bigger place. I was in my pajamas.” LAURA CAO, PRUDENTIAL DOUGLAS ELLIMAN “I knew [Zeckendorf Towers] would be a good place to hang my hat as someone who was looking to develop my real estate business,” Deppe said. But brokers said the strategy is especially helpful in today’s competitive market. “To compete with me, you have to know my building really well,” Uberti Bona said. “When someone comes to the Atelier or the Edge, you have to really know the building well to out-sell me. It’s not so easy. I live there, I study it. I know everything about it.” Brokers said having a personal stake in the building gives clients confidence.

would otherwise not exist. At the 565-unit Edge, for example, Uberti Bona started a “foodie” group that hosts monthly meetings with cuisines from different regions. At Zeckendorf Towers, Deppe has sponsored wine and cheese parties, curated rotating art exhibits and sent out Christmas magnets with convenient delivery restaurant numbers on it. Others say they focus on being a real estate resource for the building. Cao, for example, said she sends postcards to residents alerting them to deals she’s done in the building. “It’s about keeping people up to date with what’s happening

lationships at parties and over coffee, deals often come to them when they least expect them. “I was throwing out the garbage and my neighbor Maria pulled me aside and said that she and her husband had been thinking about renting their apartment out and getting a bigger place,” Cao said. “I talked to them for an hour. I was in my pajamas.” As The Real Deal has reported, Elliman’s Melanie Lazenby scored an exclusive listing for an apartment owned by billionaire Leslie Alexander — and ultimately sold it for $31.5 million — while riding the elevator Continued on page 96 PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN www.TheRealDeal.com March 2012 00


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FHA may ease rules for condo mortgages

Restrictions on owner-occupancy, retail space could loosen BY KENNETH HARNEY housands of condo unit owners and buyers around the country could soon be in line for some welcome news on mortgage financing: Though officials are mum on specifics, the Federal Housing Administration is readying changes to its controversial condominium rules that have rendered large numbers of units ineligible for low-down-payment-insured mortgages. The revisions could remove at least some of the obstacles that have dissuaded condominium homeowner association boards from seeking FHA approvals or recertifications of their buildings

T

spite the fact, said Gardner, that FHA financing is the No. 1 mortgage choice for half of all condo buyers and is crucial to first-time and minority purchasers. Moe Veissi, president of the National Association of Realtors and a broker in Miami, said FHA’s strict rules “have had an enormous impact on individuals” across the country, especially residents of condo projects who suddenly find they are unable to sell their units because their condo board has not sought or obtained approval from FHA as the result of objections to the agency’s strict criteria. This, in turn, depresses the prices unit owners can obtain and ultimate-

Barely 25 percent of all condo projects that are potentially eligible for FHA financing are now approved. for FHA loans during the past 18 months. Under the agency’s regulations, individual condo units in a building cannot be sold to buyers using FHA insured mortgages unless the property as a whole has been approved for financing. According to condominium experts, real estate agents, lenders and builders, FHA’s rules have become overly strict and have cut off unit buyers from their best source of low-cost mortgage money, thereby frustrating the real estate recovery that the Obama administration says it advocates. Christopher Gardner, managing member of FHA Pros LLC, a national consulting firm based in Northridge, Calif., that assists condo boards to obtain FHA approvals, said barely 25 percent of all condo projects that are potentially eligible for FHA financing are now approved. That is de34 June 2012 www.TheRealDeal.com

ly, said Veissi, harms their equity holdings and financial futures. FHA officials defend their requirements as prudent and necessary to avoid insurance fund losses, but have expressed a willingness to reconsider some of the issues that have upset condo owners and the real estate industry. Among the biggest areas of criticism of FHA’s rules are its limitations on: •Nonowner occupancy. The agency requires that no more than 50 percent of the units in a project or building be nonowner-occupied. This rule alone has made large numbers of condos in hard-hit markets ineligible for FHA financing, where investors have purchased units for cash to turn into rentals. •Delinquent condo association fee payments. FHA refuses to approve a project where more than 15 percent of the units are 30 days or more behind on pay-

ments of condo fees to the association. Given the state of the economy, this has been a problem for thousands of associations, even in relatively prosperous markets. Steve Stamets, a loan officer with Apex Home Loans in Rockville, Md., said some unit sellers and buyers have been so frustrated by the rule that they have offered to pay the amount of delinquent fees needed to bring the overall project into compliance “just to get the deal done. This is a ridiculous situation,” said Stamets. “When somebody calls up now and says they want to buy a condo with an FHA loan, I cringe.” •Nonresidential space usage. FHA has set a cap of 25 percent of the total floor space in a project for commercial use. Critics say this is too low and unrealistic for condo projects in urban areas, where retail and office revenues can be important to overall financial feasibility. The agency has imposed a long list of other requirements on insurance and reserves, plus a highly controversial rule that associations interpret as creating severe legal liabilities for condo board officers if applications for FHA approvals contain inaccuracies. Andrew Fortin, vice president for government and public affairs at Dallas-based Associa, one of the country’s largest homeowner association management firms, said that many boards, facing the prospect of up to 30 years in prison and heavy financial penalties, have refused to apply solely because of this personal liability requirement. FHA is expected to clarify the personal liability language and make other modifications in its forthcoming rules. Whether the changes will be enough to convince condo boards to apply for approvals in large numbers is uncertain, but industry experts say they — and condo unit owners — are likely to welcome whatever loosening of the current restrictions FHA can offer. Kenneth Harney is a syndicated real estate columnist.

���������������� ������������������ Massive Times Square project to start this spring A planned $40 million Times Square upgrade will begin this spring, according to a new timetable released by the city last month. The project will make the Times Square pedestrian plaza permanent, with new lamps and benches, and repave the area with a mosaic design. During construcA rendering of the Times Square redevelopment tion, a 15-foot-wide path will remain open to pedestrians, two lanes will be open to cars, and access to all buildings will be maintained. The work will stop from Dec. 27 to Jan. 1 in order to accommodate Times Square’s annual New Year’s Eve festivities. Work will conclude for the area along Broadway between West 42nd and West 47th streets by the end of next year, while work along Seventh Avenue will be completed in the fall of 2013.

Chetrits hit another roadblock at Chelsea Hotel, promises to make building repairs Despite getting approval from the Landmarks Preservation Commission, the Chetrit Group’s proposed rooftop addition to the Hotel Chelsea has hit another roadblock, this time with the Department of Buildings, DNAinfo reported. DOB officials last month rejected Chetrits’ application for a 3,865-square-foot addition to the building to accommodate a 150-person rooftop bar because records show the building is already more than 30,000 square feet larger and five feet taller than what is allowed under current zoning rules. Also last month, Chetrits entered into a court-mandated agreement ordering the cleanup of hazard- Chelsea Hotel ous conditions in the building after tenants filed a lawsuit claiming that renovations have made the hotel unsafe to live in. If Chetrits fails to meet a clean-up deadline of June 30, they could face fines of up to $250 per violation per day.

City reconsiders tax breaks for outer-borough owners New York City is in discussions with the state to end a 17.5 percent property tax rebate on co-op and condo apartments that are not owner-occupied, the New York Post reported last month. The rebate program, introduced in 1997 to reduce the burden on condo owners, is set to expire this month, and requires approval from Albany to be renewed. Around 365,000 co-op and condo owners in New York are currently benefitting from the program, which costs the city some $445 million annually. The money that would be generated by the measure — an estimated $50 to $100 million — would then be redistributed to apartment owners in the outer boroughs through rebates and other tax changes.

More lawsuits for Domino Sugar Isaac Katan, a co-owner of the former Domino Sugar factory, last month filed another lawsuit to block his development partner, Community Preservation Corporation Resources, from transferring ownership of the massive Brooklyn site to its lender. Lawsuits have stalled development at the industrial site since the city approved a plan to allow 2,200 units of housing there, the Brooklyn Paper reported. In March of this year, Katan sued CPC Resources for fraud The proposed Domino Sugar project and breach of contract, claiming that his partner was negotiating to sell the site behind his back. But two courts last month rejected Katan’s motion to halt the negotiations. CPC Resources said construction on the project is slated to begin in 2013. Compiled by Russell Steinberg PHOTOGRAPH OF THE CHELSEA HOTEL FOR THE REAL DEAL BY DEREK ZAHEDI


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© 2012 BRER Affiliates Inc. An independently owned and operated broker member of BRER Affiliates Inc. Prudential, the Prudential logo and the Rock symbol are registered service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide. Used under license with no other affiliation with Prudential. Equal Housing Opportunity.

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Top residential firms 2012 Chasing the luxury market

Manhattan’s largest brokerages get pricier listings, more agents

By Leigh Kamping-Carder anhattan’s residential brokerage heavyweights are seeing the benefits of a recovering market, it seems. Almost across the board, Manhattan’s largest residential firms have retained agents or added to their ranks since last year, according to The Real Deal’s annual ranking of Manhattan’s largest firms. And while the overall number of listings has dipped by 1.5

M

lion. (Sotheby’s said the total was closer to $1.8 billion.) The firm’s median listing price of nearly $2.5 million also grew 25 percent from last year, landing the luxury-focused firm its fourth consecutive No. 1 ranking in this category. Stribling & Associates and Brown Harris Stevens followed, with median listing prices of $1.8 million and $1.74 million, respectively. But in an upset, newcomer Town Residential took the fourth spot, with a median

Town Residential founder Andrew Heiberger

Number of Manhattan agents Rank May May 2012 2011 Firm

May 2012

% May 2011 Change

1

1

Prudential Douglas Elliman

1,516

1,506

0.7%

2

2

The Corcoran Group

1,131

1,057

7.0%

3

3

Citi Habitats

627

673

-6.8%

4

4

Halstead Property

600

574

4.5%

5

5

Bond New York

515

458

12.4%

6

6

Rutenberg Realty

468

446

4.9%

7

7

Brown Harris Stevens

434

435

-0.2%

8

10

Nest Seekers International

308

209

47.4%

9

N/A

Town Residential

268

N/A

N/A

10

8

Bellmarc Realty

242

252

-4.0%

11

9

Stribling & Associates

213

236

-9.7%

12

11

Sotheby’s International Realty

198

184

7.6%

percent, the dollar value of those listings has shot up nearly 12 percent, to almost $13.4 billion. When it comes to dollar volume of listings, the same five firms continue to dominate the upper echelons, with the Corcoran Group once again snagging the No. 1 spot with just over $3.5 billion worth of properties for sale, about on par with last year. But the next four firms — Prudential Douglas Elliman, Brown Harris Stevens, Sotheby’s International Realty and Halstead Property — are gaining ground. All four have seen double-digit growth in the dollar volume of their listings since last year. According to TRD’s data, gathered through Online Residential in early May, the value of Sotheby’s listings jumped 24 percent to $1.47 bil-

36 June 2012 www.TheRealDeal.com

listing price of $1.19 million — no doubt buoyed by a bevy of trophy properties, such as Italian construction scion Valerio Morabito’s $33 million Upper East Side townhouse and Town founder Andrew Heiberger’s own Lenox Hill home, on the market for $18.5 million. Another fast-growing firm, Nest Seekers International, nearly doubled its dollar volume of listings, to $252 million. With Manhattan residential real estate stabilizing in the last few months, sellers have started testing the upper limit of asking prices, brokers said. But the improvement also stems from the strong luxury market, which has skewed the dollar value of listings across the borough. Additionally, some pricey new condo projects are now hitting the market, after several years when new product was scarce.

A Town listing at 45 East 74th Street

“A good deal of it is the superior [and well-built] new condo product that’s coming on, and getting good price per square footage,” said Diane Ramirez, the president of Halstead, which saw its dollar volume grow by 23 percent compared to last year, hitting $845 million. The firm, which has 600 agents, also renovated its Park Avenue flagship to accommodate more desks. Still, while properties on the market

may be pricier, there are fewer of them to go around. Some buyers are still loath to put their homes up for sale, and the amount of new condos is still far lower than during the boom. “We’ve got a serious inventory issue of there just not being a lot of new product coming,” Ramirez said. For a second year, Corcoran clocked the highest number of listings of any

PHOTO OF ANDREW HEIBERGER BY MARC SCRIVO FOR THE REAL DEAL


Top residential firms 2012 An Elliman listing at 144 Duane Street

firm with 1,508 properties for sale; still, that’s a 16.9 percent drop from last year. (Corcoran disputed TRD’s total, saying it had 1,630 listings.) In the No. 2 spot, Elliman had 1,494 listings, a 13.2 percent increase (though the firm had said TRD’s 2011 figure was too low). What little product there is sells fast, brokers said. “One of the big differences this year is [that] everything is selling and moving really, really quickly,” said Bruno Ricciotti, cofounder of Bond New York, which had 42 sales listings, up from 34 last year. (About 350 of the firm’s 515 agents handle rentals, Ricciotti noted.) “Right now, literally, I can’t keep something on the market more than a week or two if it’s priced right,” he added. Of all the firms in the ranking, Citi Habitats had the biggest drop in listings volume. The firm saw the number of its sales listings drop to 140, a 38.6 percent decline that knocked the 627-agent juggernaut down three spots on the listings ranking to No. 9.

A Sotheby’s listing at 25 Columbus Circle

A Nest Seekers listing at 252 Seventh Avenue

While the firm is known for its rental business, Citi Habitats president Gary Malin said he’s just as focused as ever on sales. The plunge in listings, he said, was influenced by the timing of TRD’s data collection, since the firm’s properties are moving quickly. Bellmarc Realty also dropped one spot to No. 8, which firm cofounder Neil Binder attributed to “an unusual, high flurry of product” that sold in the last few months.

The bigger the better? The shortage of new inventory comes as Manhattan’s largest firms have, for the most part, expanded, continuing a trend from last year. According to some brokers, that’s because the larger firms have an edge when it comes to recruiting talent in today’s market; it’s difficult for small firms to compete with the resources and name recognition of the big companies. “What you are seeing is a flight to quality, or a flight to the resources,” said Heiberger, an industry veteran who started Town in late 2010. With financial backing from Joe Sitt of Thor Equities, Town has lured

brokers with perks like health insurance reimbursement and concierge services for agents. Manhattan’s dozen largest firms have a total 6,565 agents this year, while the 12 firms that ranked largest last year had a total of 6,159 agents. This growth is also evident in the size of the smallest firm on the list: This year, it is the 198-agent Sotheby’s. Last year, by contrast, it was Warburg Realty, which had 129 agents in 2011 and has since dropped off the list. (For this reason, TRD did not tally the firm’s listings, although Warburg is still a major player in the Manhattan market. The firm’s president, Frederick Peters, was not available for comment.) Meanwhile, rapidly growing Keller Williams NYC, which Ilan Bracha launched in early 2011, failed to earn a spot on the list of Manhattan’s biggest brokerages, despite growing to 174 agents since opening. Another quickly expanding firm is Rapid Realty, the brokerage founded in Brooklyn by Anthony Lolli. Most of Rapid Realty’s agents and offices, which are independently owned franchises, are in the

Total Manhattan listings

outer boroughs. To be sure, not every firm has added brokers in the past year, and the seven largest firms are ranked in the same order as in 2011. Elliman and Corcoran, which have claimed the top two spots since TRD started its ranking in 2004, are both about the same size as they were a year ago, with 1,516 and 1,131 agents, respectively. Citi Habitats and Stribling saw the biggest drop in size. Stribling shrank 9.7 percent to 213 agents, while Citi Habitats slid 6.8 percent to 627. Malin attributed the change to natural fluctuations in the number of agents at the firm. Stribling’s Elizabeth Stribling declined to comment on personnel or business matters at her privately held firm. Bellmarc also saw a 4 percent drop in size, to 242 agents, although Binder said a handful of his agents are not featured on the firm’s website and thus didn’t show up in the ranking. He also said he’s not concerned with

Total $ volume, Manhattan listings

Rank

Rank

May May 2012 2011 Firm

May 2012

% May 2011 Change

1

1

The Corcoran Group

1,508

1,815

-16.9%

1

2

2

Prudential Douglas Elliman

1,494

1,320

13.2%

3

4

Halstead Property

708

579

4

3

Brown Harris Stevens

651

5

5

Sotheby’s International Realty

6

8

7

May May 2012 2011

(in millions) Firm

May 2012

% May 2011 Change

1

The Corcoran Group

$3,502

$3,515

-0.4%

2

2

Prudential Douglas Elliman

$3,192

$2,619

21.9%

22.3%

3

3

Brown Harris Stevens

$2,659

$2,331

14.1%

607

7.2%

4

4

Sotheby’s International Realty $1,468

$1,183

24.1%

261

246

6.1%

5

5

Halstead Property

$845

$687

23.0%

Stribling & Associates

197

205

-3.9%

6

6

Stribling & Associates

$584

$632

-7.6%

N/A

Town Residential

174

N/A

N/A

7

N/A

Town Residential

$502

N/A

N/A

8

7

Bellmarc Realty

150

219

-31.5%

8

10

Nest Seekers International

$252

$132

90.1%

9

6

Citi Habitats

140

228

-38.6%

9

8

Bellmarc Realty

$134

$221

-39.4%

10

10

Nest Seekers International

86

99

-13.1%

10

9

Citi Habitats

$108

$158

-31.5%

11

11

Rutenberg Realty

81

73

11.0%

11

11

Rutenberg Realty

$84

$80

5.1%

12

12

Bond New York

42

34

23.5%

12

12

Bond New York

$27

$29

-6.9%

00 April 2007 www.TheRealDeal.com

www.TheRealDeal.com June 2012 37


Top residential firms 2012 tween 2011 and 2012, compared to 102 agents in the previous year. Likewise, Rutenberg Realty — which grew 37.7 percent between 2010 and 2011 — slowed its rate of growth to 4.9 percent in the past year. The 468-agent brokerage landed in the No. 6 spot for

An Elliman listing at 35 North Moore Street

adding agents unless the market warrants new hires. “I don’t just open the doors and let anyone who can chew gum and walk come in,” he said. Last year, sources told TRD that the New England–based William Raveis Real Estate was preparing to acquire Bellmarc. But Binder said that, in fact, he had been negotiating with the brokerage to purchase the share of Bellmarc that belongs to cofounder Marc Broxmeyer, who had retired the year before. Those talks fell apart, but Binder is still shopping a 33 percent stake in the firm, preferably to a real estate player who can bring more value to Bellmarc than just the purchase price, he said. Bellmarc is also moving its secondfloor office at 1015 Madison Avenue at 78th Street to a ground-floor storefront on Lexington Avenue and 81st Street. For other brokerages, growth has slowed since the 2010 to 2011 period, when many brought on new agents to replace the ones they lost during the housing crash and recession. Bond, which replaced Brown Harris Stevens as Manhattan’s fifth-largest brokerage last year, added 57 agents be-

into a reality television celebrity. As a cast member on Bravo’s “Million Dollar Listing New York,” which was recently picked up for a second season, Serhant has generated an uncommon amount of publicity for Nest Seekers. Ravi Gulivindala, a managing director who oversees training and recruiting at Nest Seekers, estimated that about 20 percent of the firm’s new agents have come on board since MDLNY episodes started airing in March. He said the show, which also features Elliman brokers Fredrik Eklund and Mi-

A Sotheby’s listing at 995 Fifth Avenue

Citi Habitats’ Gary Malin

the second year in a row. Adding agents is central to the success of Rutenberg, which operates with a highcommission-split model and brings in revenues with monthly fees and transaction fees from agents. But cofounder Kathy Braddock said she was not worried about the slower rate of growth. “If we were up and down and up and down and all over the place, I would be nervous,” she said, adding that next year she anticipates the firm will break the 500-agent mark.

Fast growers Two firms that adhere to a more traditional model grew by leaps and bounds. Nest Seekers expanded by 47 percent to 308 agents and jumped two spots to No. 8. The firm has benefited from executive vice president Ryan Serhant’s transformation

Nikki Field of Sotheby’s

chael Lorber, has brought cachet to the industry. “It’s like Wall Street was a number of years ago,” Gulivindala said. “Now, Wall Street — there’s a certain disdain for that.” In contrast, he added, “real estate is sexy.” The 10-year-old brokerage has parlayed the increased exposure into pricier listings, according to TRD’s research. The dollar volume of the firm’s listings has jumped 90.1 percent in the last year to $252 million, even as its number of listings fell 13.1 percent to 86.

Average listings per Manhattan agent

Median (in thousands)

Rank Firm

May 2012

One spot below Nest Seekers, Town made its debut on the list at No. 9, with 268 agents. After bursting onto the scene in December 2010, Town quickly made a mark with high-profile hires, including Brown Harris Stevens’s Wendy Mait-

Median listing price for Manhattan properties

Rank May May 2012 2011

The sparse number of listings is the result of brisk sales at the firm, as well as the lack of new residential development, said Gulivindala. Two new projects about to hit the market — one on the border of Gramercy Park and another on Manhattan Avenue in Harlem — will add an additional $36 million worth of listings to the firm’s total, he said. In September, Nest Seekers opened a new 30-agent office on the Upper West Side, followed by an expansion into Williamsburg. And last month, the firm tapped Serhant to head up a new 2,000square-foot Tribeca location, which will accommodate up to 35 desks when construction is completed. “I think they’ve gotten their name out there more,” Elliman CEO Dottie Herman said of Nest Seekers. “Will they hit the next level? I really couldn’t tell you.”

% May 2011 Change

May May 2012 2011

Firm

May 2012

1

2

Brown Harris Stevens

1.5

1.4

7.10%

1

1

Sotheby’s International Realty $2,498

2

1

The Corcoran Group

1.33

1.72

-22.5%

2

2

3

3

Sotheby’s International Realty

1.32

1.34

-1.6%

3

4

5

Halstead Property

1.18

1.01

16.8%

5

6

Prudential Douglas Elliman

0.99

0.88

7

Stribling & Associates

0.92

N/A

Town Residential

7

9

% May 2011 Change $1,997

25.1%

Stribling & Associates

$1,800 $1,795

0.3%

3

Brown Harris Stevens

$1,735

$1,675

3.6%

4

N/A

Town Residential

$1,185

N/A

N/A

12.0%

5

5

The Corcoran Group

$1,095

$950

15.3%

0.87

6.3%

6

4

Prudential Douglas Elliman

$999

$987

1.2%

0.65

N/A

N/A

7

7

Nest Seekers International

$981

$850

15.4%

Bellmarc Realty

0.62

0.87

-28.8%

8

9

Rutenberg Realty

$725

$640

9

Nest Seekers International

0.28

0.47

-40.6%

9

8

Halstead Property

$699

$739

-5.4%

10

10

Citi Habitats

0.22

0.34

-34.3%

10

11

Citi Habitats

$582

$499

16.6%

11

11

Rutenberg Realty

0.17

0.16

8.2%

11

10

Bellmarc Realty

$575

$615

-6.5%

12

12

Bond New York

0.08

0.07

16.5%

12

12

Bond New York

$487

$473

3.0%

6 7 8

(tie)

(tie)

38 June 2012 www.TheRealDeal.com

13.3%

PHOTO OF GARY MALIN BY CHRIS MARTIN, PHOTO OF NIKKI FIELD BY MAX DWORKIN FOR THE REAL DEAL MAGAZINE


Top residential firms 2012

land and Elliman’s Robert Dvorin. Since then, the company has opened six Manhattan offices and, as of the middle of last month, Heiberger said the firm employed 345 people. He expects to reach a capacity of 400 agents and staff by the end of 2012. “There’s no single reason for all of Town’s success, but I think that it’s an accumulation, a culmination of many factors,” Heiberger said, citing the company’s branding and marketing strategies, high-end office facilities and experienced team. While cynics note that the circumstances of Town’s growth are unique — the result of exceptionally deep pockets that could afford to pay for top talent in the early days — there’s no denying the firm has made an impressive debut on TRD’s rankings. Last year, Heiberger told TRD that the firm had almost $200 million in exclusives. This year, with 174 listings worth just over $502 million, Town has more agents with listings over $10 million than the much-larger Halstead and the luxury-focused Stribling. The firm also has an average of 0.65 listings per agent, putting it in the middle of the pack by that metric. Though Town had a strong showing, Heiberger’s rivals said the company has not poached their listings or agents en masse. Halstead’s Ramirez, for example, said

her agent count had not been significantly impacted by the arrival of Town or fellow newcomer Keller Williams. But, she added with a laugh, “I say that knocking on wood in a way.” Elliman’s Herman acknowledged that Town is a “contender,” but said it remains to be seen whether the firm will succeed in the long term. Nest Seekers’ Eddie Shapiro “I know what it costs to do what they did,” Herman said, referring to her own experience launching the forerunner of Elliman. “They have to make that money back for their investors.” When Bracha started Manhattan’s other high-profile newcomer, Keller Williams NYC, he A Stribling listing at 28 East 10th Street had the lofty objective of growing to 250 agents in the first monetary rewards for bringing on new year. But the firm, a local franchise of the agents — is still confusing. And the firm’s Texas-based Keller Williams Realty, cur- reputation as a collection of inexperienced rently only has 174 agents, which makes it agents flanking Bracha’s top-producing Manhattan’s 13th biggest firm according team persists, sources said. to TRD’s data. Is Keller Williams “getting the agents Bracha acknowledged that his 250- that they would like to get?” wondered agent goal was ambitious, but he main- Braddock, who also faced similar skeptitained that he could easily hire dozens more cism when she launched Rutenberg with agents if he were less selective. Paul Purcell. “Will they hit that mark? PerTo some, the Keller Williams business haps. I don’t know.” But Bracha emphasized some new admodel — where agents start off by earning a 70 percent commission split and receive ditions to his team, like Trump Sales and

Manhattan agents with a $10M listing or higher Rank

A Nest Seekers listing at 230 West 56th Street

Leasing’s Rana Hunter Williams, who came on board in February to launch a luxury division, as well as Elliman’s Michael Shapot and his six-person team. By TRD’s count, Keller Williams NYC has 87 listings totaling $196 million. Keller Williams NYC recently launched a rental division, and in December opened a 25,000-square-foot flagship office at 425 Park Avenue, which Bracha said he intends to expand by 10,000 square feet. “What we’re creating here is something that when we grow, we will grow so strong, it will be a huge impact on the market,” Bracha said. TRD

Manhattan agents with no active residential listings Rank

May May 2012 2011

Firm

May 2012

May 2011

% Change

May May 2012 2011

Firm

May 2012

May % 2011 Change

1

2

Prudential Douglas Elliman

30

23

30.4%

1

1

Bond New York

94.6%

96.7%

-2.2%

2

1

Brown Harris Stevens

26

30

-13.3%

2

2

Nest Seekers International

90.3%

88.5%

2.0%

2

4

The Corcoran Group

26

17

52.9%

3

3

Rutenberg Realty

87.2%

87.9%

0.8%

4

3

Sotheby’s International Realty

21

18

16.7%

4

4

Citi Habitats

86.4%

83.8%

3.2%

5

N/A

Town Residential

10

N/A

N/A

5

N/A

Town Residential

69.0%

N/A

N/A

6

5

Stribling & Associates

7

12

-41.7%

6

7

Bellmarc Realty

68.6%

61.9%

10.8%

7

7

Halstead Property

6

3

100.0%

7

5

Prudential Douglas Elliman

62.9%

69.7%

-9.7%

8

8

Nest Seekers International

4

1

300.0%

8

8

Stribling & Associates

57.7%

60.2%

-4.1%

9

11

Citi Habitats

0

0

--

9

6

Halstead Property

57.2%

65.9% -13.3%

8

Bellmarc Realty

0

0

--

10

11

The Corcoran Group

54.1%

48.3%

12.0%

(tie)

(tie)

(tie)

9

(tie)

(tie)

(tie)

(tie)

(tie)

8

Rutenberg Realty

0

0

--

11

10

Brown Harris Stevens

49.8%

54.0%

-7.8%

9

11

Bond New York

0

1

-100.0% --

12

12

Sotheby’s International Realty 49.0%

45.7%

7.2%

9

(tie)

(tie)

Source note: All data was gathered from the OLR listing portal in early May, with the exception of number of agents, which was gathered from brokerage websites. Data includes only Manhattan-based brokerages and agents, and active Manhattan residential sale listings that had been updated within the last 120 days, as of the time of the survey. Percent changes are based on figures before rounding. Corcoran Sunshine agents and listings were included in Corcoran’s total agent and listings count. Primary rankings are based on number of Manhattan agents; firms on that list are then ranked by other factors.

PHOTO EDDIE SHAPIRO BY MAX DWORKIN FOR THE REAL DEAL MAGAZINE 00 OF April 2007 www.TheRealDeal.com

www.TheRealDeal.com June 2012 39


Top residential firms 2012 Boutique breakthroughs

Ranks shift as newcomer firms continue hiring spree Top Manhattan boutique firms Rank

Firm

Total $ value, active Manhattan residential listings

2012

2011

2012

1

2

Core

$244.7 million

2

1

Leslie J. Garfield & Co.

3

3

4

No. of active Manhattan residential listings

2011

2012

2011

$173.6 million

99

64

$182.4 million

$215.3 million

23

19

Gumley Haft Kleier

$113.2 million

$84.2 million

33

4

Fox Residential Group

$84.5 million

$44.8 million

5

N/A

Blu Realty Group

$57.5 million

6

6

The Modlin Group

7

7

8

No. of Manhattan agents 2012

2011

52

51

8

10

26

36

39

21

22

39

44

N/A

34

N/A

59

N/A

$48.0 million

$31.9 million

6

8

6

4

Key-Ventures, Inc.

$45.7 million

$24.1 million

11

8

13

16

N/A

MNS

$27.1 million

N/A

24

N/A

60

N/A

9

N/A

Platinum Properties

$20.3 million

N/A

3

N/A

58

N/A

10

5

Mercedes/Berk

$17.7 million

$36.9 million

5

8

8

9

11

9

Think Properties NYC

$17.5 million

$18.1 million

4

4

8

7

Olshan Realty Inc. $15.3 million 12 11TIE

$16.1 million

8

11

10

9

Source note: All data was gathered from the OLR listing portal in early May, except for the number of Manhattan agents, which was gathered from brokerage websites. Rankings include only Manhattanbased brokerages and agents, and active Manhattan residential listings updated within 120 days leading up to the time of the survey. “Boutique” is defined as firms with five to 60 agents.

By Leigh Kamping-Carder n the world of Manhattan boutique firms, a new company is king. For the first time since The Real Deal started ranking boutique firms in 2009, the seven-year-old brokerage Core knocked the venerable Upper East Side brokerage Leslie J. Garfield & Co. from its continuous perch atop the firms with the highest dollar volume of listings. Both Core and Garfield have more listings than they did last year at this time, according to TRD’s research. But Core’s 99 Manhattan residential listings are worth a total of $244.7 million, an increase of almost 41 percent from $173.6 million last year at this time. Meanwhile, Garfield’s 23 listings are worth $182.4 million, down 15.3 percent from $215.3 million last year. Collectively, the 358 agents working at the top dozen boutique firms had 271 Manhattan residential properties listed for sale, totaling nearly $874 million, when TRD collected the data from listing provider Online Residential in early May. That’s up from last year, when the top dozen firms had 276 agents who shared 231 listings worth a total $690.4 million.  “The size of the company doesn’t matter,” Core CEO Shaun Osher said of his firm. “It’s actually the power that we have in our listings.” Jed Garfield, owner of Leslie J. Garfield, expressed disappointment that the firm his father founded in 1972 was no longer No. 1, but he also said the company generated more revenue than ever last year, with several megasales. (In the last year, the firm’s deals have included the $23 million sale of Irish financier Derek Quinlan’s townhouse at 20 East 64th Street and the

I

40 June 2012 www.TheRealDeal.com

$15.5 million sale of 21 East 70th Street.) Two agents left the firm during that time — one for a wind power software company and another for Prudential Douglas Elliman — trimming the ranks down to eight agents, including Leslie Garfield, who is no longer working full-time as a broker. “Hopefully you do one thing better than 99 percent of Core CEO Shaun Osher

the other people out there, and I think we still do that,” Garfield said. That one thing involves brokering the sales of highpriced Upper East Side and Upper West Side townhouses, including multifamily townhouses. The firm’s priciest listing is the $30 million, seven-story residence at 12 East 96th Street, marketed as a single-family home, that currently houses an Italian private school. In contrast, Core’s sales business runs the gamut from Harlem to the Financial District and from coops to new-construction condos. Indeed, it appears to be Core’s handling of sales at several new developments that propelled the company from its long-occupied No. 2 spot, according to TRD’s analysis of the firm’s listings. In November, Core took over sales at 1280 Fifth Avenue, developed by Brickman, from Brown Harris Stevens and Nancy Packes Inc. It later rechristened the 116-unit tower One Museum Mile and launched an advertising campaign with the tagline, “Art appreciates.” Core brokers Tom Postilio, Natalie Rakowski and Parul Brahmbhatt have 18 of the units on the market at the moment, asking a combined $38.7 million, including an eight-bedroom combination unit priced at about $7.2 million. The brokerage also has multiple listings at two Chelsea developments — the Cammeyer and 350W16th — as well as a townhouse at 38 Bethune Street in the West Village listed at almost $15 million. The firm is also “imminently” planning to list $500 million worth of condos at the 53-unit Walker Tower in Chelsea, OsContinued on page 94

PHOTO OF SHAUN OSHER BY MARC SCRIVO FOR THE REAL DEAL


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BATHS

INTERIOR SQ FT

EXTERIOR SQ FT

PRICE

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2.5

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317

$3,500,000

17

3

3

2,123

283

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582

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5/31/12 2:10:00 PM


PR O F I L E

“Ringing in”a new era Locked in litigation, the Ring brothers’ largely empty (and highly coveted) Manhattan portfolio could finally change hands. What’s next for their Midtown South buildings?

F

BY ADAM PINCUS or a year now, real estate investor Michael Ring has been locked in a legal dispute with Joseph and Eli Tabak, who are trying to wrest control of the 14-building Manhattan portfolio that Ring has long co-owned with his only brother, Frank. In early 2011, Michael decided to sell the Tabaks a portion of his stake in the roughly $460 million portfolio, which has notoriously sat nearly vacant for years. Michael, however, changed his mind at the last minute. The ensuing legal drama has been closely followed by owners and leasing brokers, many of whom covet the Rings’ valuable slice of prime Manhattan real estate. But until now, little has been known about what prompted Michael to sell a share of the 1 million-square-foot portfolio and about what the Tabaks — who’ve recently scored some legal victories in the case — could do with the properties if they ultimately win them. This month, The Real Deal sifted through court documents to piece together the backstory of a dispute that could finally transform this largely empty collection of sought-after buildings, and bring more than half a billion dollars worth of residential condominiums, hotel rooms and rehabilitated office space to the thriving Midtown South market, the tightest office market in the country. The situation came to a head in 2011, court records show, when F.M. Ring Associates was on the verge of losing its largest remaining tenant, the Gay Men’s Health Crisis. The departure of that tenant at the end of 2011 caused the firm’s rent roll of just over $5 million to drop by nearly half. Court records indicate that the portfolio, which had been treading financial water for years, is now a money-loser as maintenance expenses and real estate taxes surpass income. Several sources put the Rings’ projected losses for 2012 at over $1 million, even as other buildings in Midtown South are seeing a boost in rental rates and a drop in available space, due to increasing demand from technology firms like Apple and Yelp. According to a little-known but sweeping 2010 valuation of the portfolio conducted by Cushman & Wakefield 42 June 2012 www.TheRealDeal.com

for Michael Ring, the brothers could be raking in $40 million or more in rent per year if their buildings were at full capacity. With that analysis in hand, Michael was anxious to reposition the portfolio to improve the bottom line. “Frank Ring and I were in disagreement,” Michael said about his brother in a little-noticed affidavit filed in New York State Supreme Court last year. “I

QUICK RING PORTFOLIO FACTS OWNERS: Frank and Michael Ring NUMBER OF PROPERTIES: 14 ESTIMATED VALUE OF PORTFOLIO: $460 million (as of 2010) VACANCY RATE OF PROPERTIES: 89 percent HIGH-PROFILE PROPERTIES: 212 Fifth Avenue and 119 West 24th Street

Above: Frank Ring, who heads day-to-day operations for F.M. Ring Associates. Inset: Michael Ring.

“Frank Ring and I were in disagreement. I wished to invest more heavily in upgrading and renovating the properties in order to attract top-tier tenants, whereas Frank Ring preferred to leave the properties in their current deteriorating condition.” MICHAEL RING wished to invest more heavily in upgrading and renovating the properties in order to attract top-tier tenants, whereas Frank Ring preferred to leave the properties in their current deteriorating condition.”

Brothers divided The Ring brothers, who each own 50 percent of the family portfolio, have always operated under a cloud of mystery. Their father, Leo, ran a brokerage and property management company, and

began accumulating Manhattan office properties in 1943. When he passed away in the 1980s, Frank began managing the F.M. Ring Associates portfolio. But until The Real Deal profiled the company in 2009, Frank had never been interviewed by any major media outlet. For years, commercial brokers approached the Rings with potential tenants, and investors have been making unsolicited purchase offers — all to no avail. One source said that in addition to management work, Frank “probably spends all day fielding calls from people who want to buy.” Michael, meanwhile, had spent 40 years at landlord and brokerage Helmsley Spear before becoming chairman at the Midtown-based financial firm the Broadsmoore Group in 2011. According to court documents, he suggested that they pour money into the properties to bring them back to life. When Frank rejected that suggestion, Michael approached Eli Tabak, principal of the opportunistic investment firm the Bluestone Group, in January 2011 to gauge his interest as a partner. Tabak — a hands-on owner-operator — agreed and reached out to his brother, Joseph Tabak, who heads up Princeton Holdings and specializes in larger, institutional-style deals, to join them as an investor. Like Michael, the Tabaks — who have both made small fortunes by buying, owning and flipping New York properties — wanted to heavily invest in the buildings. The parties moved quickly, and drafted an agreement in February. After revisions, the agreement stipu-

January 2011 25 PHOTOGRAPHwww.TheRealDeal.com OF FRANK RING FOR THE REAL DEAL BY DEREK ZAHEDI


PR O F I L E lated that Princeton Holdings and the Bluestone Group, along with two other investors (including Michael’s son, David Ring) would pay $112.5 million for a controlling 56.3 percent interest in Michael’s half of the portfolio. For tax reasons, that money would be paid to Michael as a loan — albeit one he does not have to pay back. Under the agreement, however, he would simultaneously invest $55 million of that $112.5 million back into the Princeton/Bluestone company as preferred equity. So in the end, he would pocket $57.5 million and retain ownership of 43.7 percent of his half of the portfolio. He will also own an interest in the Princeton/Bluestone share through his $55 million investment. The Tabaks agreed to put in about $49 million. The other investors, including David Ring, would put just over $6 million into the Princeton/Bluestone entity. If all of that comes to pass, the new entity will own just over a quarter of the Rings’ portfolio. But in May 2011, Michael got cold feet, according to court documents, and attempted to back out because he was unhappy with the progress of negotiations. Then later that month, Joseph Tabak sued to force Michael to stay at the table. The case went to arbitration, and in April 2012 the arbitrator sided with the Tabaks, saying Michael could not back out of the contract, and the sides should “proceed to a closing.” The two sides are going back-andforth now in court over the next steps, but ultimately will have to hammer out a deal that either confirms the partnership agreement or pays the Tabaks to walk away. Despite the disagreement over rehabbing their buildings and the possibility of future litigation between them, the brothers have not turned on one another in any public way. Michael said in court records, “I maintain a cordial relationship with Frank Ring.” Meanwhile, Frank, through his attorney, denied the two were estranged. “Frank will neither initiate nor participate in exchanges with Michael in the media as they have much more effective and direct means of communication,” the lawyer said. Still, the agreement between Michael and the Tabaks outlines a potential legal strategy in which they might sue Frank for monetary damages for mismanaging the portfolio. Michael Ring did not respond to requests for comment. Eli Tabak declined to comment, while Joseph could not be reached.

Time for Tabaks? If the Tabaks do successfully win control of Michael’s half of the portfolio, they

will still have to get past Frank in order to start renovating the properties. But they have a plan: to invoke a little-used state law to gain control from Frank, according to court records. The long-standing law can be used when there’s a tenant-in-common ownership structure in place and dates back to farming days, when it was often used to settle disputes between heirs over property rights. The tenant-in-common structure allows joint property owners to sue to force a partition or a judicial sale of an entire property. Since individual buildings cannot be physically divided, the court orders an auction, in which one side buys out the other, or a third party buys out both own-

With a price tag of $123 million, 212 Fifth Avenue could be sold to a condominium developer.

David Lichtenstein, head of the Lightstone Group

Eli Tabak, principal at the Bluestone Group, was approached by Michael Ring about investing in the family portfolio.

The 150,000-square-foot 119 West 24th Street could be raking in as much as $6.4 million a year.

ers. For the Tabaks, buying out Frank would likely cost hundreds of millions of dollars, and could take three or four years in court. One New York real estate figure has already blazed a legal trail for the Tabaks. Gary Barnett, head of Extell Development Company, won control of 20 West 47th Street from the Rings, who were partial owners, in 2011 after filing such a suit in 2008. When, and if, the Tabaks get control of the Ring portfolio, their history indicates that they’ll either flip the properties or reposition them in a grand fashion. Joseph Tabak, 50, got his start in the 1980s with outer borough multifamily apartments. In 2003, he made a large institution-

PHOTOGRAPH OF 119 WEST 24TH STREET FROM PROPERTYSHARK.COM

al-style investment with the Lightstone Group — headed by billionaire David Lichtenstein — when it bought a national portfolio of malls called Prime Retail for $638 million, and sold it in 2010 for $2.3 billion. Then, in 2004, Joseph partnered with Joseph Chetrit and Arbor Realty Trust CEO Ivan Kaufman to purchase a stake in the office building at 450 West 33rd Street for $171.5 million. In 2005, the three bought 200 Fifth Avenue and 1107 Broadway, known as the Toy Buildings, for $355 million. They sold the properties separately in 2007 for a combined $715 million. Meanwhile, Eli Tabak, 38, is the more public of the two. His Bluestone Group

has made high-profile and controversial investments in multifamily properties in the city, as well as in more mundane real estate assets, such as a retail property in the Bronx. The company has been active over the past two years, and insiders say in that period it has purchased more than $200 million in nonperforming debt. Sources say the Tabaks are being advised by Eastdil Secured broker Doug Harmon in the Ring case.

Capturing potential The Ring buildings in question are in some of the most prime areas of Manhattan — a fact that was stressed in the analysis Michael commissioned from Cushman as he was considering how to

proceed with the properties. Cushman evaluated 13 of the Rings’ buildings; a 14th was not included because it was partially owned by another company. Of those, Cushman suggested seven would be most valuable as residential condo conversions, four would ideally be converted to hotels, one could have office rehab potential, and another small building could be sold for development rights. The largest building in the portfolio — the 184,000-square-foot 212 Fifth Avenue at 26th Street — could be sold to a condo developer for as much as $123 million, the analysis said. Other buildings Cushman identified as potentially valuable to residential developers are 17 West 60th Street, between Broadway and Columbus Avenue; 331 Park Avenue South, between 24th and 25th streets; and 155 West 23rd Street, between Sixth and Seventh avenues. Yitzchak Tessler, CEO of Tessler Developments, who has converted eight office buildings to residential in the city, said a number of the buildings seemed to be good candidates for condos. He liked the ones near Park Avenue South, in part because of the location. Tessler, who has no connection to the portfolio, said they are also attractive because “the way the buildings are built.” Plus, he noted, some of them are not efficient for office tenants because the floor plates are too small. In the hotel sector, Cushman noted that the 80,030-square-foot 142 West 24th Street, between Sixth and Seventh avenues in Chelsea, could earn an average daily room rate of $325. Two of the other potential hotel buildings — 19 West 24th Street and 45 West 27th Street — could fetch average daily room rates of about $260. The Cushman report noted that 45 West 27th Street is near the popular Ace and Nomad hotels, and “since the property is relatively small, it would likely convert to less than 100 compact rooms, lending itself to limited service brands such as Hampton Inn or Comfort Inn.” Vijay Dandapani, president and COO of Apple Core Hotels, said these projected revenue numbers seemed high, even with the current strong demand for hotels from investors. “Limited-service hotels do not average [revenue per available room] in the $260 range year round, which is what [the Cushman study] is proposing,” he said. “They are closer to $200.” While some may see the Cushman estimates as optimistic, the report expressed little doubt that refilling the buildings with office tenants was not the best use. In fact, it suggested just one of the buildings — the second largest in the portfolio — should remain with that use. That building, the 150,000-squareContinued on page 94

www.TheRealDeal.com June 2012 43


Frans Preidel of Brown Harris Stevens at One Beacon Court, where he recently rented an apartment for $65,000 per month after a bidding war.

Battling for rentals Landlords, brokers see more bidding wars for pricey units

W

BY KATHERINE CLARKE hen Miron Properties’ Jeffrey Schleider signed on in April to market a two-bedroom Lincoln Square penthouse, he never thought the property would inspire a bidding war. With an asking rent of $15,000 per month, the unit is “pretty expensive,” compared to most New York apartments, Schleider said, and he suspected it would appeal to a very small group of wealthy renters. So he was surprised to receive no less than three competing offers on the property, all close to the asking price. Schleider asked each of the would-be renters to submit second bids, and then asked for each party’s best and final offer. The apartment eventually rented for the asking price, with the winning bidder agreeing to pay a portion of the rent up front. Schleider’s experience is far from unique. With the rental market booming, brokers say, the competition for high-end rental apartments is heating up, prompting a growing number of bidding wars. Bidding wars are less common among rentals than sales, in part because asking rents are far more flexible than sales prices. And while rental bidding wars occasionally appeared in the hot pre-financial-cri44 June 2012 www.TheRealDeal.com

sis market, they were virtually nonexistent during the recession. Lately, however, they’re making a comeback, brokers said. That’s especially true for high-end rentals, a market so competitive that tenants often end up paying more than the asking rent. “I’ve been doing this since 1998, and rarely have I seen a rental bid up further than the asking price,” said Citi Habitats’ Nathaniel Faust. Now, however, “there’s a lot of frustration from renters who are losing out on apartments, so they’re willing to pay above-ask to make sure their search is over.” The increased competition is allowing landlords to be selective about the tenants they accept, to the chagrin of wealthy would-be renters, who often respond by offering a year of rent up front or attempting to show landlords that they are desirable renters. Faust, for example, recently listed a rental at 343 West 16th Street for $7,000 per month — up significantly from the previous tenant’s monthly rent of $6,125. Still, the listing drew three competing bidders, two of whom offered more than the asking price. Eventually, he said, the unit rented for $7,500 per month, with a year’s rent paid in advance.

Perfect storm The current market conditions are ripe for rental bidding wars, said Gary Malin, president of Citi Habitats. The Manhattan rental market hit record highs in April, with average rents for all apartment categories increasing by 3 to 5 percent year-over-year, according to data from Jonathan Miller, CEO of the appraisal firm Miller Samuel. The high-end rental market is particularly tight, Miller said, due to a dearth of available properties for sale. For the past year, he said, the average monthly sales inventory has been roughly 20 percent lower than the same period two years ago. As a result, would-be buyers are turning to rentals. “The tightness of [sales] inventory is partially responsible for the froth in the luxury rental market,” Miller said. “People who want to purchase aren’t necessarily happy with what they’re seeing out there.” Meanwhile, it’s still difficult to get a mortgage, especially for jumbo loans, he said, leading some wealthy New Yorkers to rent rather than buy. Others are simply still “on the fence about whether to buy,” Malin said. But desirable high-end rental properties in the city are relatively scarce, in part because “rental properties tend to be very

cookie-cutter,” Malin said. “Unique properties are few and far between on the rental side,” he added. As a result of all of these factors, the competition for high-end rentals has become intense. Douglas Wagner, executive director of leasing at Bond New York, said he’s now seeing rental bidding wars — which he hasn’t seen in three to four years — in popular neighborhoods like Chelsea and Tribeca. In these areas, he said, “any listing between $6,000 and $8,000 — that’s the sweet spot —is snapped up in an instant.” Frans Preidel of Brown Harris Stevens recently listed a rental unit in the Upper East Side condo One Beacon Court for $75,000 per month. Despite the eye-popping price, he said he entertained three competing offers on the unit, eventually leasing it for $65,000 per month.

Wooing landlords To help secure their desired apartments, high-end tenants now regularly offer to pay a whole year or several months’ worth of rent up front, according to Halstead Property’s Warner Lewis. Contrary to popular belief, however, that isn’t always the best way to land a coveted apartment, Lewis said, noting that it can limit a renter’s leverage with the landlord if something goes wrong. Instead, he said, it’s crucial to cooperate — without complaining — with requests for bank statements and tax returns, since landlords don’t want to be bothered with difficult tenants. That’s especially true for wealthy homeowners Continued on page 96 PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN


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EAST END

The hopping Hamptons

A look at the real estate deals behind the East End’s newest trendy hot spots

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hen beachgoers and socialites head out to the Hamptons this season, they will be greeted by a collection of trendy new restaurants and hot spots. After several years of relative quiet, the East End has seen a flurry of commercial real estate activity in the last few months, with several prominent properties trading hands. As The Real Deal and others have reported, the deal-making has been hottest in Montauk, where three-decade-old venues are undergoing face-lifts and the much-hyped Surf Lodge is under new management. A handful of new high-end retail stores have also opened recently, including a Haute Hippie clothing store in East Hampton and James B. Fairchild and Alice & Olivia boutiques in Southampton. And while most major retail spaces in the East End villages are already full, properties of 1,200 square feet or less in the desirable town centers have seen the strongest

Surf Lodge

183 South Edgemere Street (Montauk) Tech entrepreneur and part-time Montauk resident Michael Walrath, previous-

day-to-day operations.) Walrath — who founded the online advertising company Right Media and sold it to Yahoo! for $680 million in 2007 — has been busy paying off fines from the

demand, said Hal Zwick, a commercial broker at Town & Country Real Estate. Zwick — who brokered the Alice & Olivia and Haute Hippie deals and is marketing the White’s Pharmacy space in East Hampton for $6.7 million — said retailers are particularly location conscious this year. Before the recession, he said, some retail chains would establish a Hamptons outpost simply for the sake of marketing and visibility. Now they’re concerned about finding the spaces that will give them the most bang for their buck. “The retailers have a post-recession mentality,” Zwick said. “They’re looking for the best location to maximize foot traffic because, quite honestly, being at one end of the block instead of another can effect your customer count by 25 percent.” This month, The Real Deal delved into the real estate deals behind the newest Hamptons eateries and nightspots — some of which have gotten a lot of public attention, while others have slipped under the radar.

settle 100 of the violations. The rest were dropped. The Surf Lodge deal was handled without a broker, the East Hampton Star reported, with Montauk Properties tak-

Surf Lodge

ly a minority investor at the Surf Lodge, bought the trendy hotel, bar and restaurant outright in April. The price for the 1.26-acre property was not disclosed, but a source familiar with the bidding said Walrath likely paid just under $3 million to buy up the remaining debt on the property. The previous owners — hospitality consultant Steven Kamali, along with nightlife moguls Jamie Mulholland, Jayma Cardoso and Robert McKinley through an entity called Edgemere Montauk LLC — paid $4.41 million for the property in 2008, according to public records. (Cardoso is staying on to manage

46 June 2012 www.TheRealDeal.com

“They’re looking for the best location to maximize foot traffic because, quite honestly, being at one end of the block instead of another can effect your customer count by 25 percent.” HAL ZWICK, TOWN & COUNTRY REAL ESTATE town of East Hampton related to almost 700 code violations levied against the business last summer. Last month, his firm, Montauk Properties LLC, agreed to pay $100,000 to

ing over the previous owners’ legal burdens and responsibilities. Walrath did not return calls for comment. Meanwhile, Walrath was also part of the investment group that bought the

Montauk seafood restaurant Lenny’s on the Dock in January for $4.3 million. Walrath and his business partner, chef James Tchinnis, plan to reopen it early this month as a 2,400-square-foot restaurant called Swallow East. The property, which is at 474 West Lake Drive, is just under an acre. Judi Desiderio, president of Town & Country, the firm that handled the Lenny’s sale, said Walrath may be interested in picking up other Montauk properties. “He’s hot for Montauk commercial real estate,” she said. All eyes will be on Walrath this summer, especially at the Surf Lodge, which had previously been at odds with the community over the hundreds of see-and-beseen partiers who flooded into the establishment every weekend night. But Walrath has said its new incarnation will be more low-key. The Surf Lodge, which replaced the time-worn Lakeside Inn in 2008, represented a turning point in the hamlet, for better or worse, Desiderio said. “They really turned a sleepy little Lakeside into a destination, and then that brought a lot more interest to the area,” she said. “Even though the people in Montauk may not be totally happy with it, I think if they spoke candidly, they’d say that the business that it brought into Montauk was well-received.”

Beaumarchais East Hampton

44 Three Mile Harbor Road (East Hampton) The Meatpacking District brasserie, known for its party brunches, has opened an East End location in a space last occupied by high-end Chinese restaurant Philippe Chow. Beaumarchais signed a five-year, $100,000-per-year lease on the space, which is located in a 4,965-square-foot


EAST END building that also houses the nightclub SL East. The entire building is currently listed for sale for $3.95 million with Marcus & Millichap’s Steven Siegel. The property is owned by Cilvan Realty LLC, an entity founded by Frank Cilione, a restaurateur who operates in the Hamptons and Florida. In 2010, Cilione ousted the nightclub Lily Pond from the space now occupied by SL East, which has four years left on a fiveyear, $195,000-a-year lease.

man family, who renovated the 2,500square-foot restaurant space after Bostwick’s left. They expanded an outdoor deck, said Town & Country’s Zwick, who noted that the Andrra property includes “a whole boat yard.” The Mendelmans are “a very nice family ... they’ve owned [the building] for years,” he said, adding that they also own several other East End marinas, including Harbor, Halsey’s and Gardiner’s marinas. This spring, the East Hampton Star

The new restaurateurs have renovated the space again, Zwick said, installing a new bar and a gas fireplace.

Pop-Up Whole Foods Market

Montauk Highway (Wainscott) After becoming convinced that the East End market was right for a big-name grocery store, Gregg Saunders — vice president at the Manhattan-based real estate company Philips International — bought

The Montauk Beach House

that will open this summer is a small popup market in the existing 8,000-squarefoot building. The project, Saunders said, is a test to see if a full-size store will work. Patrick Smith, a principal at SRS Real Estate Partners, served as Whole Foods’ broker on the lease. He declined to comment, and Saunders would not say how much the chain was paying in rent. “I will tell you this,” he said. “In downtown East Hampton, the rents start — start — at $100 a foot. I’m on the highway [so] I’m a little bit different. But rents in the town of East Hampton, for quality real estate, start at $100 a foot.”

The Montauk Beach House

55 South Elmwood Avenue (Montauk)

Michael Walrath

Tom Colicchio

Frank Cilione

Beaumarchais’s new home is a stable environment, Siegel said, unlike Hamptons party spots that have been plagued by neighbor complaints. It is in a commercial area, he noted, with a large parking lot (the better to avoid citations for illegal parking) and few homes nearby. “Those two tenants are excited to be there,” Siegel said. “They’re going to be there for a long time, and the sellers are just looking to take advantage of a strong market right now.”

Andrra

39 Gann Road (East Hampton) Andrra, a new Mediterranean restaurant, replaces the Boathouse, restaurateur Michael Gluckman’s seafood destination. But the space is still best known for its previous tenant, Bostwick’s Chowder House, which was there for 15 years before relocating in 2009. The building is owned by the Mendel-

Pop-up Whole Foods

reported, the family’s company, Seacoast Enterprises Associates, Inc., bought the Three Mile Harbor Boat Yard. In 2010, after Bostwick’s moved out, Gluckman signed a 15-year lease to operate the Boathouse there. But this March, he sold the business to Sami Krasniqi — who, according to news reports, previously operated the restaurant Coco on East Hampton’s Main Street — along with Noto Krasniqi and Rich Silver for an undisclosed amount, with the new owners taking over the remainder of the lease.

the former Plitt Ford dealership and set out to develop it. “I bought the property knowing that I was going to put a Trader Joe’s or a Whole Foods there,” said Saunders, who has a house in Sagaponack. The dealership closed in 2009, and Saunders bought the 1.9-acre property at a 2010 note-sale auction for $3.9 million. Since then, he has secured the requisite East Hampton town approvals for a full-size grocery store — though the store

The former Ronjo Motel, on downtown Montauk’s central plaza, sold in February to Sole East’s Chris Jones and his business partner Larry Siedlick. The duo paid $4.21 million for the four-building, 11,650-square-foot Ronjo, which had been listed as high as $6 million. Atlantic Beach Realty’s Rick Solano, the seller’s agent, said his firm took over marketing in April 2011, and listed it for $5 million. Jones and Siedlick bought the 33-room motel from Hoa Nga Tran, a Vietnamese immigrant who scooped it up in 1982 for about $1 million, Solano said. In an interview, Jones said the new ownership is spending $2.3 million to renovate the property. Besides the motel, the finished property will have two pools, 120 cabana beds and a private beach club. Though the Ronjo had a no-frills reputation, Solano said its location just two blocks from the beach was a major selling point — especially now that Montauk has reached a new level of popularity. In the past, Montauk was known for “mom-and-pop people who have run businesses seasonally forever,” he said. “Now a lot of people are coming in and gut-renovating places, trying to find value. And it’s working for them.” Room rates at the Montauk Beach House, Jones said, will start in the $300 range for midweek nights, rising to $400 to $500 per night for peak weekends. The property is part of a mini hotel empire that Jones has recently established in Montauk. He opened Sole East, a 60unit “resort” in a landmark Tudor building near Montauk village, in 2006, and around the same time, the 26-room Sole East Beach motel. The Montauk Beach House project, though, has recently hit a roadblock: a legal dispute over a 3,700-square-foot alley. The developers bought the alley — which is critical to the renovation plan and runs through the property — from the town of East Hampton for $35,000. Some Democratic town board memContinued on page 90

www.TheRealDeal.com June 2012 47


Building Blocks How many buildings do you own? Sixty buildings, mostly mixed-use in Brooklyn, Queens and Manhattan. The lion’s share of our buildings are in Park Slope, though. How many units? Approximately 325 apartments and 75 commerBy Jane C. Timm cial units. Our smallest is a four-story townhouse with four apartments at 16 St. Mark’s Place in Park Slope, and our largest is a 30,000-square-foot Manhattan commercial building at 1504 Third Avenue — TD Bank and Lenox Hill Hospital rent the space. Your whole family is in the business? I work with my brother, Matthew, and my brother-in-law, Scott. Mom keeps us on the straight and narrow. It’s a family affair.

Accidental landlords Your family is known for owning Pintchik Discount Hardware. How did you end up in real estate? We started off with hardware stores — we had about 13 of them at the peak. We had one in Astoria, and in 1982, someone threw something through the front of the building and it started a fire. We called up our landlord to say there had been a fire and she said, “Sonny boy, I have no idea how to put this back together.” We suggested that we’d buy the building and fix it up. Later, the Gap came along and of offered to pay us more in rent than we were making as a hardware store, so the Gap won out, and we found out that we liked being landlords. How did you build the business from there? After buying the building in Astoria, we started buying two to four buildings a year. One day, we realized we were much more of a real estate company than a retail company, so we sold the rest of our hardware stores with the exception of the one here in Park Slope, which is celebrating its 100th year this year! Why did you concentrate on Park Slope? We had a fairly strong reputation in this area of Brooklyn. Instead of putting their property up for sale, people would call us and say they were planning to move, and were we interested? We bought a lot of property off-market.

— Pintchik’s Manhattan and Brooklyn properties

Tenant horror story? We had a tenant who had a furniture store on the ground level. When they moved out, we found that the back room — 2,000 square feet — was filled floor to ceiling with trash. In the 10 years they’d been there, they’d never thrown anything out. It took us 160 cubic yards of dumpster to empty out the space.

Building a Neighborhood You’re known for being selective about your tenants — last month, you turned down an offer from Hooters to lease space across the street from the new Barclays Center. Why? We turn down about 70 percent of the people that come to us with offers. It’s our belief that through very careful editing, we can make the neighborhood nicer and more interesting and at the same time do good business. In the long run, it’ll pay off in tenant retention.

48 June 2012 www.TheRealDeal.com

Vital Stats: Name: Michael Pintchik Age: 60 Hometown: Born in Brooklyn, raised in Hewlett, Long Island Currently living in: Carnegie Hill, Manhattan

What are you planning to do with that site? If it were up to us, we’d put a simple glass box called the Apple Store there. We’ve reached out to [Apple] to have them consider it, but we have nothing to report at this time. It deserves a really high-quality tenant that a lot of people would like to see. We had McDonald’s approach us, and we’ve turned them down on multiple occasions. We don’t feel that they’re going to help us create the fabric that we’re trying to produce — we want to be more artisanal. What about your properties along Flatbush Avenue? We’re probably the majority property owner on Flatbush between Atlantic Avenue and Grand Army Plaza — 43 of our buildings front on Flatbush Avenue. During the next 18 to 24 months, we’re going to start developing one or two of our sites. We’re planning mixed-use buildings, probably six stories tall. It’s going to add about 120 apartments. We’re going to be able to create some larger retail spaces, too, but we want to be really careful over who we put there. Maybe Trader Joe’s? Uniqlo? We’re trying to create that more Soho, Dumbo, West Village feeling in terms of the ten tenants. You sold some buildings to Forest City Ratner for about $4 million — what went into that decision? We sold three buildings and [they] became part of the new Nets arena. We recently met with Bruce Ratner to talk about the area. He’s also very concerned about getting the right kind of tenants in and around there, and he met with us to sound out as to what our plans were. He’s looking for it to be an upscale, fun environment. We had a great conversation. TRD 1504 Third Avenue

PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN


Fannie Mae/ Freddie Mac

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ince the financial crisis, Fannie Mae has exerted an outsize influence on the New York City housing market. With Fannie Mae essentially the only secondary mortgage market game in town, lenders have adopted the government-sponsored body’s long-standing guidelines as gospel. Even financial institutions that keep the mortgage loans on their books are looking to adhere to the guidelines as a conservative investing strategy, sources said. (Freddie Mac has had a similar, although lesser, impact.) Along with the additional paperwork, this attitude has turned a previous patchwork of lending practices into a set of hard-and-fast rules, prompting an industry-wide sea change every time the federal government issues a fresh guideline. For example, Fannie’s requirement that buildings keep 10 percent of annual fees in a reserve fund, which took effect in March 2011, immediately erected another hurdle for buyers to obtain mortgages in many buildings.

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n addition to the DOB, developers must get approvals from a host of other city and state agencies when putting up a new building. The roster includes the Board of Standards and Appeals, which grants zoning variances; the Metropolitan Transportation Authority, which green-lights work near subway tunnels; the Fire Department, which conducts safety inspections; and the Department of Housing Preservation and Development and the Department of Finance, which together issue 421a tax abatements.

Department of Buildings

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ired by the developer, construction managers have long relied on the DOB for a laundry list of approvals to let development projects move forward. But in the wake of a spate of construction accidents, the DOB has stepped up regulations and enforcement of the city’s building code, sources said, increasingly forcing developers and construction managers to rely on expediters to step into the role of DOB liaison, handling permits and violations. The DOB is “just more conscious of little things that people took for granted for years,” said William Frederick of construction company Pavarini McGovern, explaining that these days an inspector may be quicker to issue a violation rather than a warning. A DOB spokesman said the agency has enacted more than 25 new safety laws since 2008. “Through strict enforcement and expanded public education efforts, the department has raised awareness about the importance of construction safety on job sites across the city,” he said.

By Leigh Kamping-Carder ike a complex rain forest ecosystem, New York City’s residential real estate market is a web of closely interconnected players, all relying on each other to get deals done. This month, The Real Deal mapped out this system, examining the overlapping relationships between developers, brokers, attorneys, lenders, regulators and others who interact in the process of building and selling a Manhattan apartment. We identified dozens of relationships for both resales and new developments (the most relevant in today’s market

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Lender

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inancing is, of course, the key ingredient to any development, and for that developers often rely on banks, private equity firms and other funding sources. But at an increasing number of projects, financial institutions are stepping into the developer role after purchasing property notes. Still, those lenders often hire a developer to act as a partner.

Developer City/ State

Buyer Mortgage Lender

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evelopers hire offering plan attorneys to coordinate with a host of players — engineers, architects, development consultants, construction managers and others — to compile a document for the New York Attorney General’s office that establishes the exact design for a new condominium building. Once the office declares the plan effective, the developer can start selling units, relying on the offering plan attorney to draft contracts. Recently, Attorney General Eric Schneiderman backed off a proposal that would have required developers to file offering plans digitally.

The Closin

Offering Plan Attorney

Architect

Publicist

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50 June 2012 www.TheRealDeal.com

TRD maps out the industry’s com

Expediter

Construction Manager

Attorney General

The real estate

evelopment consultants, like Corcoran Sunshine Marketing Group and the Marketing Directors, advise developers on unit mixes, amenities and finishes — as well as running sales offices, where the real money is made. Sometimes the development consultant will also recommend an architect (as well as designers, advertising firms and other professionals) to the developer.

Development Consulting Firm


tate

system

y’s complex web of NYC relationships

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are detailed in blurbs; other key relationships are demarcated with arrows). In addition to the players, The Real Deal included a few central regulatory forces that significantly impact — and often send ripple effects — through the real estate environment. The closely intertwined relationships of New York real estate sometimes make it difficult to get a transaction done, but also ensure that established players keep a firm hold on their corners of the market. “This is what keeps barriers to entry very high,” said Michael Stern, managing partner of JDS Development Group. “It’s a blessing and a curse.”

Appraiser

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Seller

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efore staging, marketing and showing a property (work that continues through contract negotiations), seller’s brokers must fight for exclusive listings by winning over savvier-then-ever clients, who come armed with the latest Internet market research. To win over the seller, a broker must walk the tightrope of pricing properties reasonably, while satisfying owners who often believe their homes are worth top dollar.

Mortgage Broker

Mortgage Lender

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The osing

ver since 2009, when Fannie Mae adopted rules to buffer loan officers from the professionals who value homes, mortgage brokers have been barred from hiring appraisers. Instead, mortgage brokers (and many banks) now rely on appraisal management companies (or AMCs) to act as liaisons with appraisers. But in New York, critics say, this practice spawns faulty valuations from out-of-towners. In the last few months, some lenders have made exceptions to this policy on high-end deals, said appraiser Jonathan Miller.

Seller Attorney

Seller Broker

Bank Attorney

Interest rates

he Federal Reserve’s tool to keep the wavering economy chugging along — interest rates — has immediate ripple effects on New York real estate. Recent months of historically low rates, for example, have prompted renters to consider buying and buyers to consider financing more of their purchases. The rate for an average 30-year, fixed-rate mortgage is 3.93 percent, according to the latest figures from the Mortgage Bankers Association.

uyer’s and seller’s brokers have always stayed in close contact while negotiating deals — whether following up on offers or helping assemble the buyer’s best possible board package — and that has never been truer than it is in today’s market. In this market, “Deals can crater if there is not the right amount of attention and diligence paid by all the parties involved,” said Cathy Taub, a senior vice president at Stribling & Associates.

Buyer Broker

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nce an offer is accepted, the relationship between the buyer’s and seller’s attorneys — who together hash out the parties’ contract — becomes one of the most important negotiations in the transfer of an apartment. These days, sources said, the most important stipulation in their back-and-forth is the mortgage contingency, which lets buyers back out of a contract if they can’t obtain a mortgage. The provisions have become nearly universal since the financial crisis. But some buyer’s attorneys also try to include an extra protection that would allow their client to reclaim a deposit if unforeseen circumstances — such as job loss — cause a bank to withdraw a mortgage offer after a commitment letter is issued. Not surprisingly, these clauses are not popular with seller’s attorneys.

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ith stringent lending standards the norm for several years now, individuals who need a mortgage expect to shop around and jump through hoops for lenders. These days, one of the biggest obstacles to getting financing is qualifying the building where a buyer wants to purchase, mortgage experts said. That’s because the vast majority of lenders follow Fannie Mae loan guidelines, which exclude many Manhattan condos and co-ops on technicalities.

Buyer Attorney

Buyer Managing Agent

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ith transactions speeding to the closing table during the boom, buyer’s brokers often earned commissions with little effort. But with so many deals now falling through, they have to work feverishly to make sure that potential buyers become actual buyers. That often means making sure clients — particularly firsttime homebuyers — are preapproved for financing even before they start apartment–hunting. Brokers are also increasingly contending with condo boards whose standards are reminiscent of New York’s notoriously strict co-op boards.

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Co-op/ Condo Board

hile title insurance can be bought directly, typically title insurers are hired by the buyer’s attorney and do not interact directly with buyers or sellers. But buyer’s brokers can recommend title agents, a practice that Expert Title Insurance Agency’s Rafael Castellanos has observed is becoming increasingly common as the industry has consolidated in the wake of the housing crisis. Brokerages like Prudential Douglas Elliman and Houlihan Lawrence own affiliated title insurance agencies, which have essentially created one-stop shops.

Title Insurer

www.TheRealDeal.com June 2012 51


PROFITABLE PROPERTIES

NYC’s skyscraper kings A first-ever ranking of the firms with the richest Manhattan office portfolios — and the buildings that are throwing off the most cash for them

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BY ADAM PINCUS ew York City’s real estate press regularly chronicles which firms buy and sell Manhattan’s most prized office towers. But handicapping how much those trophy buildings actually throw off in cash from rents is another story. This month, however, The Real Deal did a first-ever ranking of which companies are generating the most income from their Manhattan office-building portfolios. What we found is that the highest concentration of lucrative buildings is not along Park Avenue or even in the Plaza District as one might expect. Instead, it is clustered on Sixth Avenue between 47th and 55th streets. Meanwhile, the General Motors Building — at 767 Fifth Avenue — is the city’s single most profitable building. TRD’s ranking used the city’s tax records, which estimated the net operating income (NOI) — or the revenue the building is generating minus its operating expenses — to analyze hundreds of Manhattan office buildings. Where NOI numbers were not available, TRD used the city’s stated market value to calculate one. While NOI is not a perfect measurement of an owner’s financial strength, because individual owners may have debt payments to make and partners to share income with, it is the gold standard for determining the raw value of a building. “The [NOI] fairly accurately describes the revenue stream from properties, which is [a] measure of economic power,” said Paul Massey, CEO of brokerage Massey Knakal Realty Services. In addition, though the city generates the NOI partly through income and expense statements that property owners are required to file annually on most commercial properties, in some cases the city’s income figures are higher than what landlords claim. Glenn Borin, comanager of the tax certiorari group at Stroock & Stroock & Lavan, estimated that for two-thirds of the buildings, the city’s NOI figure has been inflated by about 5 percent over the landlord’s reported figure, while for a third of the buildings, NOI might be off by 10 percent or more. (Also, when calculating the NOI, the city did not subtract real estate taxes.) The city tax records, released in January and finalized last month, were based on 2010 financial results. In calculating the

52 June 2012 www.TheRealDeal.com

What we found is that the amount of cash being generated by some Manhattan office buildings is staggering.

companies’ totals, TRD brought the numbers up to date by only counting buildings currently owned by each company. The figures were shared with each firm, who all declined to comment. What we found is that the amount of cash being generated is staggering. For example, Vornado Realty Trust topped the list with more than $918 million in NOI at 31 buildings. While it’s not surprising that REITs like Vornado and SL Green Realty have the most valuable portfolios, a handful of the city’s family dynasties are not far behind, the ranking revealed. More surprising, of the top 10 firms raking in the most money, only three — Brookfield Office Properties, the Durst Organization and Boston Properties — are currently moving forward with construction plans for new office buildings. Instead, the majority of the firms on the list are either acquiring buildings or sitting on towers they’ve long owned. Below is a breakdown of the 10 companies with the most lucrative office portfolios in Manhattan.

Vornado Realty Trust Total Manhattan office NOI: $918 million Type of firm: REIT

ment fund for $292 million. Over the past year, the REIT has purchased the office condominium at 666 Fifth Avenue as well as the entire 1 Park Avenue building. It hasn’t constructed a building in Manhattan since 2004, when it completed the Bloomberg Tower at 731 Lexington Avenue, a mixed-use office and residential building. And while it had several development projects in the pipeline, it’s unclear when any of them will begin construction. Indeed, the REIT’s plans for building its proposed 15 Penn Plaza are currently on ice and its construction time line for a commercial development site in Harlem is also unclear. After 1 Penn Plaza, the firm’s most valuable Manhattan property is 1290 Sixth Avenue, home to AXA Financial and Cushman & Wakefield.

Average income: $41 per square foot

V

ornado’s 31 Manhattan office buildings, which total 22.2 million square feet, are generating $918 million a year — more money than any other real estate firm in New York. And the crown jewel in its portfolio — 1 Penn Plaza — is not even located in the most prime office tower location in the city. The skyscraper, however, generates $108.7 million, more than any other building in Vornado’s Manhattan office portfolio, according to TRD’s analysis. The 2.4 million-square-foot building, one of the largest in the city, counts the law firm Milberg LLP and the financial company Penson among its tenants. Headed by chairman Steven Roth and CEO Michael Fascitelli, Vornado has been actively buying properties since the downturn. The last time it sold a major office building was in 2003, when it unloaded 2 Park Avenue to a German invest-

SL Green Realty Total Manhattan office NOI: $790 million Type of firm: REIT Average income: $35 per square foot

S

L Green has also been hard to ignore lately. The company currently has 34 buildings totaling 22.9 million square feet. A handful of those properties have been picked up in the last few years. The firm, which ranked No. 2 on the list with $790 million in total NOI, owns a broad collection of buildings spread throughout Manhattan. Its top-earning building is the 1.6 million-square-foot Times Square office tower 1515 Broadway, which is throwing off $70 million a year — more income than any other building in the firm’s New York portfolio, according to city records. And the building will remain a money-maker for years. That’s because the media behemoth Viacom signed the largest lease of

www.TheRealDeal.com January 2011DUFFY 25 ILLUSTRATION FOR THE REAL DEAL BY CHRISTOPHER


PROFITABLE PROPERTIES the year — a renewal and expansion — in April, and is expected to occupy the entire building in coming years. SL Green CEO Marc Holliday acknowledged on the firm’s first-quarter earnings call in April that the company is anticipating more cash flow from 1515 Broadway because of the Viacom lease. “This asset, in our minds now, moves into elite core status in Manhattan with an $80 million near-term NOI,” he said.

Manhattan buildings totaling 15.5 million square feet, in addition to millions of square feet around the globe in places like China, India and Brazil. Ten landmarked buildings in Rockefeller Center have formed the core of its Manhattan portfolio since 2001, when it partnered with the Crown family to buy full control of the complex for $1.85 billion. (It had been a partial owner since 1996.) Still, the Rockefeller Center office prop-

Average income: $66 per square foot

T

he Boston-based REIT, which focuses on Class A buildings with white-shoe law firms, owns the General Motors Building at 767 Fifth Avenue, the city’s most valuable building. It alone generated $157 million of the firm’s total $545 million annual income. That was far ahead of the second most-valuable building in the city, the Durst Organization’s 1 Bryant Park. Partly because of the GM Building, the

NYC building owners with the most lucrative Manhattan office portfolios RANK COMPANY

# OF BUILDINGS

SQUARE FEET

NET OPERATING INCOME

1

Vornado Realty Trust

31

22.2 million

$918 million

2

SL Green Realty

34

22.9 million

$790 million

3

Tishman Speyer

14

15.5 million

$736 million

4

Boston Properties

7

8.3 million

$545 million

5

Brookfield Office Properties 10

17.9 million

$534 million

6

Paramount Group

10

9.8 million

$405 million

7

Durst Organization

10

8.5 million

$357 million

8

Rudin Management

15

10.1 million

$283 million

9

Fisher Brothers

4

5 million

$222 million

2

4.5 million

$216 million

10 Rockefeller Group

Source note: City tax records, which provided estimated net operating incomes. Where NOI numbers were not available, TRD used the city’s stated market value to calculate one. The city records were based on 2010 financial results. TRD only counted buildings currently owned by each company. NOI numbers are estimates.

Vornado chairman Steven Roth

SL Green CEO Marc Holliday

SL Green has been especially active buying and selling properties over the past year. For example, it unloaded 28 West 44th Street for $161 million in May 2011, and in December purchased 51 East 42nd Street, which is part of a potential 1.2 million-square-foot office development site on a small square block bounded by Madison and Vanderbilt avenues, and 42nd and 43rd streets.

Tishman Speyer Total Manhattan office NOI: $736 million Type of firm: Privately owned Average income: $47 per square foot

T

he family-owned real estate company may have lost Stuyvesant Town and Peter Cooper Village in a high-profile foreclosure at the beginning of the financial meltdown, but it is still generating $736 million from its Manhattan office portfolio. The firm, headed by father and son co-CEOs Jerry and Rob Speyer, owns 14

PHOTOGRAPH ROTHwww.TheRealDeal.com BY RICHARD SCHULMAN 28 MarchOF 2012

Tishman Speyer CEO Jerry Speyer

Boston Properties head Mort Zuckerman

erties brought in only about $310 million of the firm’s total. Part of the reason for that is that in 1996, just after Tishman Speyer bought its ownership stake, the partnership sold 1.6 million square feet of the complex to NBC for $440 million. Tishman Speyer’s most lucrative Manhattan building is the Brutalist 200 Park Avenue, the MetLife Building, which the firm bought in 2005 for $1.72 billion and which generates about $127 million per year in NOI. But even as Tishman Speyer has been building projects all over the world, it hasn’t developed any New York office properties in years. And other than a couple of condo floors at 30 Rock, which it bought back from NBC in 2007, it hasn’t purchased anything here either.

Boston Properties Total Manhattan office NOI: $545 million Type of firm: REIT

Brookfield Office Properties CEO Ric Clark

company also wins the distinction of having the highest average income per square foot — at $65.56 — among the top 10 owners. The REIT, which is headed by Mort Zuckerman, has only seven Manhattan buildings totaling 8.3 million square feet. But in contrast to some of the others on the list, it is in development mode. The firm is constructing a 1 million-squarefoot office tower at 250 West 55th Street, estimated for completion in 2014, with law firm Morrison & Foerster signed on as the anchor tenant.

Brookfield Office Properties Total Manhattan office NOI: $534 million Type of firm: REIT Average income: $30 per square foot

T

he company headed by CEO Ric Clark is part of the Toronto-based Brookfield Asset Management and has a massive portfolio. But city tax records show it has a

low per-square-foot NOI. While its total income portfolio-wide came to $534 million, the income on its World Financial Center properties averaged between just $18 and $32 per foot, far below most of the city’s modern Class A office buildings. That may reflect both that the leases are old, and that tenants pay less for aging buildings in Lower Manhattan. But Brookfield, which owns 10 Manhattan buildings totaling 17.9 million square feet, is also one of the few firms that is making the ultimate bet on the city: new building construction. It’s planning to build up to 5.4 million square feet of commercial and residential space at 10th Avenue and 33rd Street. The project, which is being called Manhattan West, is still waiting to secure an office tenant before construction begins. Brookfield’s most lucrative building is 245 Park Avenue, with nearly $96 million in annual NOI.

Paramount Group Total Manhattan office NOI: $405 million Type of firm: Privately held German investment fund Average income: $41 per square foot

T

he investment company founded by the German Otto family is one of only two owners among the top 10 on TRD’s ranking with overseas ties. (The other is the Japanese Rockefeller Group Development.) Headed by CEO Albert Behler, Paramount was founded in the 1960s to buy U.S. real estate. It currently owns 10 Manhattan buildings with 9.8 million square feet that bring in $405 million annually. Through the years, it’s successfully taken advantage of the cyclical nature of Manhattan property prices to purchase major office buildings in distress. For example, Paramount acquired its most profitable building, the 1.8 millionsquare-foot 1301 Sixth Avenue, in 2008 after owner Harry Macklowe defaulted on his loan to Deutsche Bank. The tower, which includes tenants such as the law firm that recently imploded, Dewey & LeBoeuf (see related story on page 30), and French bank Credit Agricole, had an income of $84.8 million. Yet Dewey’s effective shutdown has sent Paramount scrambling to find new occupants. And according to news reports, the landlord has already started showing potential tenants some of Dewey’s 474,000 square feet of space.

Durst Organization Total Manhattan office NOI: $357 million Type of firm: Privately held Average income: $42 per square foot

T

he midtown-based firm finished construction on the 2.1 million-squarefoot 1 Bryant Park in 2010. That building, among the five most valuable in the city, generates a third of the income that Durst brings in from its office portfolio, or about $129.3 million. (The family firm has a

www.TheRealDeal.com June 2012 535


PROFITABLE PROPERTIES substantial residential portfolio as well.) Unlike most of the other property owners among the top 10, Durst built every one of its 10 buildings, which encompass 8.5 million square feet. The buildings brought in $357 million in income last year. And, along with the Port Authority of New York and New Jersey, it’s a partowner in the city’s highest-profile building: the 3.2 million-square-foot 1 World Trade Center, which isn’t counted in this ranking because it’s not bringing in income yet. Other than 1 Bryant Park and 1 World Trade, two massive projects, Durst isn’t currently launching construction of any other office towers in the city. Instead, it’s reaping the benefits of a collection of office buildings the family built along

where it plans a pyramid-shaped residential condo building designed by Bjarke Ingels.

at the former St. Vincent’s Hospital site in the West Village.

Fisher Brothers

Rudin Management

Total Manhattan office NOI: $222 million

Total Manhattan office NOI: $283 million

Type of firm: Private, family-owned

Type of firm: Private, family-owned Average income: $28 per square foot

R

udin Management has 15 buildings, which bring in a total of $283 million a year, in its 10.1 million-square-foot office portfolio. But the family firm has not constructed a new office building in more than a decade. The most profitable of its buildings is 345 Park Avenue, which the company built in 1969. That building has an annual NOI of $68.9 million. The 855,000square-foot 3 Times Square, which was

Average income: $44 per foot

F

isher Brothers, another of the city’s long-time development families, owns four large office buildings — which are among seven the company built between 1957 and 1980. The most valuable property in its 5million-square-foot Manhattan office portfolio is the 1.9 million-square-foot 1345 Sixth Avenue. It was constructed in 1968 and has an annual income of nearly $109 million. Asset management firm AllianceBernstein occupies nearly 1 mil-

Average income: $48 per square foot

D

espite the influx of foreign money into the city in recent decades, Rockefeller Group Development and Paramount are the only foreign-owned entities in the top 10. Rockefeller, a subsidiary of the Japanese Mitsubishi Estate Co., owns just two office buildings totaling more than 4.5 million square feet in Manhattan. But it cracked the top 10 because of the high NOI for each one. The company, which was purchased from the Rockefeller family in 1989, owns the property with the third highest NOI in the city: the 2.55 million-squarefoot McGraw-Hill Building at 1221 Sixth Avenue, where NBC Universal leases 245,000 square feet. The building gen-

Manhattan’s top 10 most profitable buildings 1 2 3 4 5 6 7 8 9 10

ADDRESS

OWNER

SQUARE FEET

NET OPERATING INCOME

767 Fifth Avenue (GM Building)

Boston Properties

1.8 million

$157 million

1111 Sixth Avenue (1 Bryant Park)

Durst Organization

2.2 million

$129.3 million

1221 Sixth Avenue (McGraw-Hill Building)

Rockefeller Group

2.5 million

$129 million

200 Park Avenue (MetLife Building)

Tishman Speyer

2.8 million

$127 million

1270 Sixth Avenue

Tishman Speyer

2.7 million

$114.1 million

1211 Sixth Avenue (News Corp. Building)

Beacon Capital Partners

1.98 million

$110 million

1345 Sixth Avenue (Alliance Capital Building) Fisher Bros. Management

1.9 million

$109 million

268 West 34th Street (1 Penn Plaza)

Vornado Realty Trust

2.4 million

$108.7 million

350 Fifth Avenue (Empire State Building)

Malkin Properties

2.8 million

$97 million

245 Park Avenue

Brookfield Office Properties

1.6 million

$96 million

Source: Estimated net operating incomes from city tax records. Where NOI numbers were not available, TRD used the city’s stated market value to calculate one.

The GM Building, owned by Boston The Rockefeller Group’s McGrawProperties, generates more money Hill Building has the third-highest than any other building in the city. income in the city.

Third Avenue and Sixth Avenue in the 1960s and 1970s. One example is 1133 Sixth Avenue, built in 1969, which generated an NOI of $32 million, city records show. On the residential side — through its Durst Fetner Residential, a partnership with developer Hal Fetner — it is in construction mode. The company is building a hotel and residential tower at 855 Sixth Avenue, and last month construction was underway at 625 West 57th Street,

54 June 2012 www.TheRealDeal.com

The Durst Organization’s 1 Bryant Park is the company’s most lucrative NYC building.

Rockefeller Center, the core of Tishman Speyer’s office portfolio.

erected in 2001 and was the last building it constructed, is the second most-valuable office property it owns, producing an NOI of $46 million. Many of the buildings in the family’s portfolio are smaller office properties, concentrated on Lexington and Madison avenues, that generate less than $10 million in NOI per year. And, of course, Rudin, led by company CEO William Rudin, has residential projects as well, including the 350 apartments it’s planning to build

The MetLife Building, Tishman Speyer’s most lucrative Manhattan building.

lion square feet in the tower, CoStar figures show. The family has not constructed an office building since it built Park Avenue Plaza, at 55 East 52nd Street, in 1980.

Rockefeller Group Development Total Manhattan office NOI: $216 million Type of firm: Privately held by a foreign corporation

SL Green’s top-earning building is 1515 Broadway, where Viacom recently signed a renewal and expansion lease.

erates nearly $129 million per year. The firm’s other skyscraper, the Time-Life Building, at 1271 Sixth Avenue, brings in $87 million. In addition, Rockefeller Group owns a 99-year ground lease under the 1 million-square foot 745 Seventh Avenue, public records show. The company built it in 2001 and, that same year, sold it to Lehman Brothers. The building is now owned by Barclays Capital, so it is not included in the ranking. TRD

PHOTOGRAPHS OF METLIFE AND MCGRAW-HILL BUILDINGS www.TheRealDeal.com JanuaryFROM 2011COSTAR 25


Ac c ept edbyov er1, 100bui l di ngsr epr es ent i ngov er160, 000apar t ment s ,


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5 BR, 7.5 BATH WEB ID: 935757

45 EAST 74TH STREET - TH

$33 M

2 BR, 2 BATH WEB ID: 743798

15 BLEECKER STREET

$8,750

4 BR, 3 BATH WEB ID: 368615

230 EAST 73RD STREET

$4.1 M

1 BR, 1 BATH WEB ID: 666207

7 BOND STREET

$6,500

4 BR, 4.5 BATH WEB ID: 277951

845 WEST END AVENUE

$3.85 M

1 BR, 1 BATH WEB ID: 429699

39 EAST 29TH STREET

$5,600

We define our neighborhoods as much as they define us.

110 Fifth Avenue New York, NY 10011 212.633.1000

730 Fifth Avenue New York, NY 10019 212.242.9900

88 Greenwich Street New York, NY 10006 212.269.8888

45 Horatio Street New York, NY 10014 212.604.0300

26 Astor Place New York, NY 10003 212.584.6100

Launching March 2012!

TOWN Residential, LLC is a licensed real estate broker and proud member of REBNY. Town Residential LLC is a partnership with Thor Equities LLC. We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing because of race, color, religion, sex, handicap, familial status, or national origin. All information is from sources deemed reliable but is subject to errors, omissions, changes in price, prior sale or withdrawal without notice. No representation is made as to the accuracy of any description. All measurements and square footages are approximate. Exact dimensions can be obtained by retaining the services of an architect or engineer.


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� ��� �� ����� �� ������ ��������������������������������������� ��������������������������� 1974: CHANIN BUILDINGS HIT WITH REAL ESTATE TAX FRAUD

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The Top Team in New York

Now in M iami

rosecutors charged two real estate corporations affiliated with renowned Art Deco–style developer Irwin Chanin of fraud in obtaining property tax reductions, 38 years ago this month. Prosecutors claimed the corporations failed to pay $138,549 in taxes over three years for the 1929 Chanin Building, a 56-story office tower at 122 East 42nd Street — kitty corner from the Chrysler Building — and the 30-story Century Apartments at 25 Central Park West. Both are now city landmarks. A prolific architect and developer who died in 1988, Chanin built the Lincoln Hotel (now the Milford Plaza Hotel), as well as more than a half-dozen popular Broadway venues and the famed 6,200-seat Roxy Theater. His soaring twin-towered Majestic Apartments at 115 Central Park West is also a city landmark. Manhattan District Attorney Richard Kuh, who brought Chanin Building on 42nd St. the case, claimed the Chanin entities knowingly understated income to the city’s Tax Commission. In a separate case later that month, Kuh charged an affiliate of the Kaufman Organization with similar violations at its 500,000-squarefoot Garment District office building at 450 Seventh Avenue. The cases were brought as part of a yearlong investigation by the D.A.’s office into accusations that a large number of property owners were cheating the system to lower their taxes. There are no news reports indicating how the cases were resolved, but in 2002 the city accused 18 current and former city tax assessors of taking bribes to reduce real estate taxes, in a scheme that prosecutors said first began in 1967.

T

Call me at 212. 8 91.7263 or email me at jteplitzky@elliman.com and we’ll set up a time to discuss how you can take advantage

he sweeping federal banking legislation known as the Glass-Steagall Act —which rewrote the nation’s banking rules and prohibited lenders from owning real estate brokerages — was signed into law 79 years ago this month. The lawmakers, who were responding to stock market and property bubbles of the Great Depression, placed partial blame for the financial crash on the close relationship between banks and real estate brokerages. Congress wanted separation between the two industries because of concerns over conflicts of interest. Specifically, legislators prevented banks from being involved NYC during the Great Depression in commercial activities like real estate brokerage. In 1999, the federal Gramm-Leach-Bliley legislation loosened the banking laws — allowing banks to broker stocks and bonds, for example — but real estate brokerage remained out of bounds. While there has been some softening of the lines between financial firms owning brokerages, President Barack Obama signed legislation in 2009 more clearly declaring the ban on national banks owning real estate brokerages.

of the Jacky Teplitzky team now being in the two of the most exciting cities in the U.S.! Jacky Teplitzky Managing Director

©2012. Prudential Financial, Inc. and its related entitles. An independently owned and operated broker ������� ��� ����������� ����� ������� ����������� ������ �� ����������� ���������� ��������� ������������ ���� ���������������������������������������������������������������������������������������������������� entities, registered in many jurisdictions worldwide. Used under license. Equal Housing Opportunity.

58 June 2012 www.TheRealDeal.com

1933: U.S. BANS BANKS FROM OWNING BROKERAGES

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1905: METLIFE PLANS TALLEST TOWER IN WORLD

he rapidly growing Manhattan-based company Metropolitan Life Insurance announced plans 107 years ago this month to build the famed Manhattan office tower that was for a short time the tallest building on Earth. When the project was announced, architect Napoleon Le Brun said the building — located at Madison Avenue and 24th Street — would not be more than 560 feet tall. But the Metropolitan Life Tower was redesigned to 50 stories and rose to 700 feet when it was completed in 1909. It was taller than any other building in the world until the Woolworth Building at 233 Broadway was finished in 1913. The MetLife tower was the crowning jewel to a long development process for the insurance company, which already had its headquarters on the city block between Madison and Park avenues, and 23rd and 24th streets. By 1905, Met Life had constructed seven 11- and 12story buildings on the block. The tower, modeled after the Piazza San Marco in Venice, was the final piece. MetLife building In January 2012, hotel owner Marriott International purchased the building, now known as the Clock Tower with an address of 5 Madison Avenue, from developer Africa Israel USA for $165 million. Marriott and partner Ian Schrager plan to convert it into a hotel. Compiled by Adam Pincus


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WHAT THEY MAKE

Paycheck confidential TRD breaks down industry salaries to see which real estate pros are getting the biggest (and smallest) pieces of the pie

A

BY C. J. HUGHES t a time when reality TV stars take pregnancy tests on camera, the still-taboo subject of salaries may be the last holdout in a shareeverything society. Even more reason for The Real Deal to shine a light on who makes what in the real estate industry. Such research has been done in an array of other professions, from the movie industry to the arts to publishing, but it’s never been done in a comprehensive way for the New York City real estate world.

So this month, we took inventory of compensation in a broad cross-section of jobs in the industry, from CEOs to social media directors, to find out approximately how much real estate professionals are making in the post-boom market. Data from compensation surveys and the U.S. Bureau of Labor Statistics, as well as interviews with dozens of industry sources, revealed that top firm executives still take home seven-figure paychecks, as do superbrokers. However, not everyone in New York real estate can afford a Hamptons home and a private jet. See below for our findings.

RESIDENTIAL President and CEO of a large residential firm: $400,000 to $3 million

T

he executives who head the city’s major firms — including Prudential Douglas Elliman, the Corcoran Group, Brown Harris Stevens and Halstead Property — are, not surprisingly, paid well. But within that elite group, there are distinctions. Sources say base salaries for the heads of Manhattan’s most well-known residential firms start at $400,000 and go up all the way up to $1.5 million. In addition, these top executives may get annual bonuses based on the company’s performance and other factors. One source close to Elliman said that president and CEO Dottie Herman has a base salary of $1.5 million. She also owns 30 percent of the company — a stake that was worth more than $20 million when she and business partner Howard Lorber bought Elliman in 2003 for $72 million. Today, Elliman is likely worth far more, and as an owner, Herman receives a percentage of the company’s annual profits. (Lorber’s Vector Group owns 50 percent of the company.) In Herman’s best years, her total compensation adds up to about $3 million, the source said. Herman declined to comment. The source also confirmed that Elliman, as expected, will soon drop its franchise affiliation with Prudential Real Estate. Elliman’s owners will then buy out Prudential’s 10 percent stake in the company, boosting Herman and Lorber’s share of the firm’s profits. Like Elliman, the Corcoran Group and Brown Harris Stevens each have corporate parents — Realogy and Terra Holdings, respectively. Those relationships ensure that CEOs “will get something” even in a slow market, said a high-placed source at a smaller firm. The heads of independent firms, by contrast, can see their

60 June 2012 www.TheRealDeal.com

compensation dip dramatically when the market suffers. Aside from lavish salaries, the heads of major real estate firms often get additional perks. One residential brokerage source said those perks can include unlimited use of a chauffeured car, which can come in handy, especially for the executives who live in the suburbs, like New Jersey resident and Corcoran CEO Pam Liebman. Though rumors abound about Liebman and executives at other firms getting company-paid apartments, they are not true, sources told The Real Deal. When asked about Liebman’s compensation and perks, a spokesperson for the firm responded by e-mail saying: “Corcoran does not comment on compensation practices, and any reported estimates are completely hypothetical and based on speculation, not fact.”

Residential superbrokers: $2 to $7 million

M

uch like star baseball players or financial-firm wizards, superbrokers can easily out-slug their bosses in terms of salaries. Real estate “is not really that much different from a trading floor,” said Kathy Braddock, cofounder of Rutenberg Realty and an industry veteran. “Some traders will make more than their managers, though it’s a very small group.” But unlike CEOs’ more stable salaries, almost all of brokers’ compensation comes from commissions, which they split with the firm. But while typical brokers get to

“[Real estate] is not really that much different from a trading floor. Some traders will make more than their managers, though it’s a very small group.” KATHY BRADDOCK, RUTENBERG REALTY keep 45 to 60 percent of their commissions, superbrokers can keep as much as 80 percent of it, according to sources. Then their earnings are divvied up among teams and used to pay for marketing and other expenses, reducing the individual broker’s take. One source close to Elliman said Raphael De Niro was the highest-earning broker at the firm last year, pocketing $5 million for his entire team. De Niro’s team — which was awarded the top team prize by Elliman for highest team commissions in 2011 — has indeed

been on a roll lately. For example, De Niro and his wife Claudine listed a Mandarin Oriental penthouse for $38 million, selling it for $30.55 million last July. Assuming the De Niros received the standard 3 percent commission for representing the seller — which would have come to $917,000 — and have an 80 percent split with Elliman, they would have earned around $733,600 on that deal. De Niro declined

www.TheRealDeal.com January 2011ZAHEDI 25 MONEY PIE GRAPHIC BY DEREK


WHAT THEY MAKE to comment on his salary, but said it wasn’t as high as $5 million. “I’m not an officer of a publicly traded company, so my compensation is a personal matter,” he wrote in an e-mail, “but I can assure you it wasn’t $5 million.” Meanwhile, Elliman’s Dolly Lenz, who has brokered a reported $8.5 billion in sales in her 25-year career, raked in $3 million last year, according to the same source. Lenz — who did not respond to a request for comment — was named the No. 1 residential broker in the U.S. at Prudential Real Estate Affiliates this spring. Corcoran’s Carrie Chiang, meanwhile, won her firm’s top award last year with $300 million in sales. Assuming the same standard 3 percent and an 80 percent split with her firm, she and her team might have pulled in just over $7 million in commissions. Chiang did not respond to a request for comment. Another highly paid broker, sources said, is Paula Del Nunzio of Brown Harris Stevens, who in late May had $360 million in listings. Because Del Nunzio doesn’t have a team, she can personally keep that much more of her commissions, sources said, though it also means she can’t do as much volume as brokers with legions of assistants. In March, Del Nunzio’s listing for the Rothschild Mansion at 41 East 70th Street went into contract. It’s unclear how much it fetched — according to city records, the sale had not closed as of press time — but it was last listed at $30 million. If the property closes for that amount, Del Nunzio, who did not respond to a request for comment, could walk away with $720,000, assuming an 80 percent split.

Residential firm sales managers: $150,000 to $1 million

S

ales managers, who are hired by firms to supervise agents and run offices, are sometimes overshadowed by dealmaking brokers. These executives tend to receive a base salary of $150,000 to $300,000, depending on the size of their firm, sources say. And they are also paid bonuses, often between 4 and 8 percent of their office’s profit — also known as an override fee. But some successful managers will negotiate a payment model where they forgo a salary for a higher percentage of their office’s profits. That number could climb as high as 10 percent, sources said. The city’s top-earning managers include Jim Gricar, Halstead’s general sales manager; Bill Cunningham, who oversees Corcoran’s main 660 Madison Avenue office; and Town Residential sales director and company founding member Wendy

Maitland, sources said. “If you are focused on revenues and commissions, and meeting and greeting, and creating new businesses, you can make seven figures as manager,” said Andrew Heiberger, founder of both Town and Citi Habitats. Neither Gricar nor Cunningham responded to a request for comment. Maitland would not comment on her salary, but suggested that any financial benefits were due to the early success Town has seen since launching in 2010. “We all took a ‘high risk, high reward’ perspective, in what I think was the right time and place for veterans in the industry to do,” she wrote in an e-mail.

oper can earn anywhere from $200,000 to $500,000, depending on their job responsibilities. Among the highest paid are said to be Joanna Rose of Related, Silverstein Properties’ Dara McQuillan and Jordan Barowitz at the Durst Organization, according to a senior executive in the industry. Longtime employees at well-estab-

lished PR firms like Rubenstein or SDK Knickerbocker can make $100,000 to $150,000 a year, the same source said. That’s in addition to a one-time commission of 10 to 20 percent of a client’s fee, for bringing them in, though that’s usually paid out only after the client has stuck around for a year, a source said. Entry-level publicists at PR firms might make $35,000 a year. Those with

Head of new development at large residential firm: $300,000 to $2 million

I

n booming markets, the head of the new development marketing department can be among the highest-paid people at a residential firm. These executives, who come up with inventive ways to sell new condo projects and pitch developers to get business, take hefty salaries. Normally, the head of a new development marketing division at a big firm is paid around $300,000 to $400,000 a year, sources said. But in some cases, sources added, these executives can also earn twice their salary in bonuses in a year when a lot of new projects sell out. With new condo projects now few and far between due to a still-shaky economy, however, these executives are unlikely to take home such large paychecks. Susan de Franca — who left the Related Companies last year to join Elliman as president of the firm’s new developments division — makes a base salary of $700,000 a year, according to a source close to Elliman. But if her developments sell well, that number can swell to $2 million. De Franca declined to comment. Sources said that other top earners in this category include the head of Corcoran Sunshine Marketing, Kelly Kennedy Mack, who did not respond to a request for comment; along with Steven Kliegerman of Halstead and Jacqueline Urgo of the Marketing Directors, who both declined to comment.

Public relations: $35,000 to $500,000

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here are two types of public relations representatives in real estate: those who work in-house for brokerages, developers or law firms, and those who work for outside agencies. In-house publicists — especially those who work for developers — tend to make the most money. Sources said an experienced flack working for a devel-

PHOTOGRAPH OF DE NIRO BY MICHAEL TOOLAN; PHOTOGRAPH OF CHIANG BY BEN BAKER; PHOTOGRAPH OF URGO BY MAX DWORKIN 64 March 2012 www.TheRealDeal.com

Elliman CEO Dottie Herman

Corcoran CEO Pam Liebman

Corcoran powerbroker Carrie Chiang

Elliman powerbroker Raphael De Niro

Halstead’s general sales manager Jim Gricar

Susan de Franca, Elliman’s head of new development

President of the Marketing Directors, Jacqueline Urgo

Town’s residential sales director Wendy Maitland

Jeffrey Jackson, of Mitchell, Maxwell and Jackson, said highlevel residential appraisers can take home $200,000 to $300,000 a year if they diversify and handle multimillion-dollar condos. www.TheRealDeal.com June 2012 61


WHAT THEY MAKE a few years of experience, however, could see that salary double, sources said.

Social media directors: $75,000 to $150,000

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hese days, more and more real estate companies are hiring on-staff social media directors to promote the company on platforms like Facebook and Twitter, and help brokers master these increasingly important tools. Halstead in 2011 hired its first-ever social media director, Matthew Leone, who’s responsible for the firm’s Facebook, Twitter, Tumblr and Foursquare accounts. He’s also involved with video marketing at the firm, and has other marketing responsibilities at parent company Terra Holdings, where he oversees a 23-person staff. Those added duties could boost his pay, sources said. Corcoran, too, has a full-time social media guru. In 2010, graphic designer Matthew Shadbolt came to the firm from QVC, the shopping channel, to boost its online presence. Dawn Doherty, who formerly worked at StreetEasy, took on similar duties last spring at Elliman, in a newly created role of chief digital officer. But she left after just 10 months to join Keller Williams, and the Elliman position has not yet been refilled. Like Leone, social media directors often have other marketing duties that could boost their pay. Doherty, Leone and Shadbolt all either declined to comment or did not respond to requests for comment. Elliman, Corcoran and Halstead also declined to comment on salaries for social media positions. But Burke Smith — whose company Your Net Coach advises New York brokers about social media — said social media directors at residential brokerages (who don’t have other duties) generally make between $75,000 and $100,000 a year. Smith cautioned, however, that these positions may not be around forever, as brokers learn how to boost their online presences themselves. “A lot of people are being put on salaries who are social-media gurus, but who have never sold a piece of real estate in their life,” claimed Smith, who himself is a broker. “They know about a trendy thing that’s cool now, but in some cases could be out of a job within a year.”

Residential appraiser: $35,000 to $300,000

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his is almost always a fee-based profession, but various post-recession reforms have reduced what appraisers can make. As The Real Deal has reported, appraisers now often hail from far outside the New York metro area and will do the work for

62 June 2012 www.TheRealDeal.com

much less than their local counterparts. That situation has eroded wages throughout the industry, appraisers say. During the boom, entry-level residential appraiser salaries were $60,000 a year, but now they are down to $35,000, according to sources who work in the appraisal industry and are familiar with salaries. Midcareer, those salaries can rise to $80,000 in New York City, according to the Bureau of Labor Statistics, but only if the appraiser becomes certified, which is the step after licensing. Still, Jeffrey Jackson, cofounder of Mitchell, Maxwell and Jackson, said highlevel residential appraisers can take home $200,000 to $300,000 a year if they diversify and handle multimillion-dollar condos. In fact, the best residential appraisers in New York can make more than commercial appraisers, who might earn $125,000 on average, Jackson said. Still, the changes to the industry have hurt long-time practitioners. “The new blood coming in is this ‘crankit-out’ mentality, and the old guard is dying on the vine,” said Jonathan Miller, president and founder of Miller Samuel, who has 25 employees. He declined to disclose a salary range for his employees, but added that he is one of the few appraisal firms that offers salaries rather than just commissions. Miller also declined to reveal his own salary. “One of the great things about being a private company is that we get to keep all of our private information private,” he wrote in an e-mail. But given that he’s the owner of the firm and does outside work, including quarterly market reports for Elliman, his income comes from a variety of sources. Miller said he personally responded to industry changes by adding different kinds of clients to his practice, including co-op boards and residential sellers. Jackson said his firm — which has a handful of employees on a commissiononly structure — has also branched out, working for trusts and estate attorneys, as well as courts. “I don’t really work for banks anymore,” Jackson said.

ompensation varies widely among the heads of New York’s commercial brokerages, depending on the firms’ size, scope and area of specialty.

CEO Glenn Rufrano, who is based in New York, is not public. But CBRE’s outgoing CEO Brett White, who is based in Los Angeles, took home $5.3 million last year in salary, stock options and other benefits, according to the company’s public proxy. And in 2010, his compensation soared to $11.5 million, though part of that was stock options that might not vest for years.

Appraiser Jonathan Miller

CBRE’S outgoing CEO Brett White

COMMERCIAL Commercial brokerage president/CEO: $500,000 to $11.5 million

C

Jones Lang LaSalle CEO Colin Dyer

CBRE’S Mary Anne Tighe

CBRE’s Darcy Stacom

Eastdil Secured’s Doug Harmon

Doorman at a typical Upper East Side co-op: $44,000

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hey’re on the front lines — or at least the front doors — of New York City real estate. So how much do doormen make? In 2014, at the end of the current contract, those epaulet-wearing door-spinners will make about $44,000 a year on average, according to a spokesperson for the Service Employees International Union, which represents them. However, holiday tips at the swankiest Fifth and Park Avenue co-ops could tack on thousands to that total, sources said. On-site concierges, who field requests for cabs and packages, average $41,500, according to the labor bureau.

Related Companies chairman Stephen Ross

In one category are sprawling global companies like CBRE Group, Jones Lang LaSalle and Cushman & Wakefield, which is backed by Italian parent company Exor. The global heads of those firms, who are in strictly corporate managerial roles, make between $2 and $11.5 million a year, which includes salary, bonus, stock awards and other benefits. The salary of Cushman & Wakefield

Bob Toll, chairman of Toll Brothers

Colin Dyer, the Chicago-based CEO of Jones Lang LaSalle, saw his compensation jump from $2.3 million in 2009 to $7.1 million last year, including bonus, stock awards and other benefits, according to news reports. Those executives, however, have different arrangements than some of New York City’s so-called “player coaches.” It’s harder to determine the take-home pay of these brokers, who also have

PHOTOGRAPH OF TIGHE BY BENwww.TheRealDeal.com BAKER; PHOTOGRAPH OF TOLL BY HUGH HARTSHORNE January 2011 25


WHAT THEY MAKE management responsibilities, because their income is a combination of commissions and salary. For example, Mary Ann Tighe is CEO of CBRE’s Tri-State Region, but also leases millions of square feet of office space a year (see related entry below). Tighe declined to comment.

a managing partner of CPEX Real Estate Services, a small Brooklyn-based commercial brokerage, and a former partner at Massey Knakal.

Commercial superbrokers: $5 to $10 million

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verall, revenues in commercial real estate are far larger than on the residential side. But the commission struc-

Currently at the top of the pecking order [for developers] is Stephen Ross, founder and chairman of Related, which has a dizzying array of commercial and residential projects across the city and the country.

Newmark Grubb Knight Frank — which is smaller, but was recently purchased by financial services powerhouse BGC Partners — has at least two chiefs who play slightly more hands-on roles: Barry Gosin, the veteran CEO broker, and president Jimmy Kuhn, who often advises clients on their real estate assets. Both are rainmakers involved in drumming up business. Meanwhile, Peter Riguardi, president of the New York division of Jones Lang LaSalle, over the years has handled megaleases like the MTA’s 1.6 million-square-foot lease of 2 Broadway and Bank of America’s 1.5 millionsquare-foot lease at One Bryant Park. Smaller local firms, like Massey Knakal, Besen & Associates and Eastern Consolidated, are run by owneroperators whose compensation depends largely on firm profits. As a result, their fortunes seem to be tied much more closely to the market, sources say, even with the 5 percent cut of every broker’s commission that they generally get. “If those kinds of firms have a couple bumpy quarters, it has a big impact on [principals’] lives,” said Tim King,

64 March 2012 www.TheRealDeal.com

Vornado chairman Steven Roth

ture is far more complicated: In fact, the bigger the deal, the smaller the brokers’ percentage. As The Real Deal has reported, commercial real estate commissions range from 1 to 5 percent for deals of $50 million and less; above that, they fall as low as 0.3 percent. The payouts are then divided up within teams by commissions and bonuses. On a megadeal, those teams can include more than a dozen people. Within the two main camps of commercial brokers — investment sales and office leasing — a few agents dominate the market. At the top of the heap for investment sales is CBRE’S Darcy Stacom, nicknamed “Queen of the Skyscrapers,” and partner

Bill Shanahan. The two were largely responsible for their firm’s $5.6 billion in Manhattan sales in 2011, including the $400 million sale of 140 East 45th Street and several pricier, partial-interest sales, according to an analysis published by The Real Deal in April. In her decades-long career, Stacom, who did not return calls for comment, has closed $50 billion in sales, including the mammoth $5.4 billion Stuyvesant Town deal in 2006. Meanwhile, Eastdil Secured’s New York investment sales brokers completed $9 billion in 2011 in Manhattan sales — even more than CBRE. Eastdil’s brokers usually demand a commission of 1 to 5 percent for each large sales deal, a source said. Eastdil’s most active sales broker, industry veteran Doug Harmon, brokered the $930 million deal for the Starrett-Lehigh Building on West 26th Street last summer, among others. Unlike the salaryplus-commission models most superbro-

kers use, Harmon and other brokers at Eastdil pool their commissions and then divvy them up at the end of the year, with the most active brokers getting the largest cuts, a source said. On the office leasing side, the city’s highestpaid broker is CBRE’s Tighe, sources said. She, along with CBRE’s Gregory Tosko, very publicly represented Condé Nast in its 1.05 million-square-foot, 25-year lease at One World Trade Center, in a deal estimated to be worth $2 billion. Tighe ranked No. 1 on a leasing brokers ranking in The Real Deal’s January issue. Last spring, TRD reported that the “full commission” on the One World Trade Center deal — the amount divided between the lead broker, their team, the firm and sometimes even the tenant in the form of a rebate — could have been $25 to $30 million. Even if Tighe got just a fraction of that amount, she’d still go home with several millions of dollars on that deal alone. A source at rival firm Cushman said she might take home $10

million a year. Given that she brokered 2.2 million square feet of space last year in eight deals and likely has a salary from her managerial job, it stands to reason that she could have earned somewhere in that ballpark. “She’s really in a class of her own,” the source said. A company spokesperson said only that “CBRE does not respond to nor comment on rumor and speculation, especially relating to personnel matters.” Cushman’s Tara Stacom, Darcy’s sister, another star leasing broker, represented the landlord in the Condé Nast deal. While landlord-side brokers generally make anywhere from 16 to 25 percent of the full commission on megadeals, they have to split those with the house and their team.

Large development firm president/top executive: $3 million to tens of millions

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he heads of the city’s most active development firms — including Related, Extell, Silverstein Properties, Forest City Ratner, the Durst Organization, Toll Brothers and TF Cornerstone — have compensation structures that are all over the map. They can vary widely, depending on which projects are being worked on and the state of the market, said one corporate recruiter familiar with the firms and their pay structures. Currently at the top of the pecking order, sources say, is Stephen Ross, founder and chairman of Related, which has a dizzying array of commercial and residential projects across the city and the country. Related is privately held and isn’t required to divulge payroll information, but sources said Ross takes an annual salary of around $10 million. He is believed to own at least 60 percent of his company. That means in a phenomenal year, he could take home tens of millions of dollars from his real estate business, according to estimates from two sources based on an analysis of land costs, construction costs, condo sales revenue and rental income. Salaries like these are not, however, out of line with what top business executives in other fields make in New York. According to a Crain’s ranking of salaries for 2010, published last year, the head of Viacom, who finished first, had a total compensation (including stock and other benefits) of $84 million. The salary for Ross doesn’t even take into account owning the Miami Dolphins football team, helping elevate his net worth to $3.1 billion, according to Forbes. Other top executives at Related might make between $5 and $8 million annually, between salary, bonuses and a share of the profits, the source estimated. The heads of slightly smaller but still prolific development firms — like

www.TheRealDeal.com June 2012 63 25


WHAT THEY MAKE Extell Development’s Gary Barnett and Douglas Durst of the Durst Organization — likely take home $5 to $7 million annually, sources said, though exact figures are not publicly available. Spokespeople for Durst and Extell declined comment. Like with Ross, however, that could go up significantly with blockbuster projects, which Barnett has now at

Founder of Extell Development Gary Barnett

company CEOs are created equally. Robert Toll, chairman of the national home builder Toll Brothers, recently earned a base salary of $1.3 million, with a total compensation package worth $2.55 million, according to SEC filings. But that difference, the recruiter said, can be explained by the fact that compensation at public companies is often lower

SL Green CEO Marc Holliday

Vornado CEO Michael Fascitelli

Boston Properties chairman Mort Zuckerman

Jonathan Mechanic, a partner at FFHS&J

Stroock & Stroock & Lavan’s Leonard Boxer

they are public companies, and are therefore required to disclose executives’ pay. At Vornado Realty Trust, for example, chairman Steven Roth, CEO Mike Fascitelli and New York president David Greenbaum all take home $1 million per year in base pay, according to public documents. But they also receive generous stock options and other company perks. In 2011, Roth’s total compensation was $8.2 million, including $227,000 for a car and driver, SEC documents show. Fascitelli earned $8.2 million as well, while Greenbaum made $3.9 million. Boston Properties, which has a large commercial real estate presence in New York, paid chairman Mort Zuckerman $1 million last year in base salary, though his total compensation, including stock and stock options, totaled $10.6 million. At mega-New York landlord SL Green Realty, salaries were slightly less. CEO Marc Holliday earned $725,000 in 2010, the most recent year for which documents were available, though his direct compensation was closer to $6.3 million, when factoring in stock and stock options. Officials from Vornado and Boston Properties did not respond to requests for comment. SL Green declined comment. Meanwhile, according to the Wall Street Journal, a new study by Chicagobased compensation firm FPL Associates found that compensation for executives at public real estate companies grew faster last year than stock performance did. The highest-paid executive cited in the study was Michael Farrell, CEO of Annaly Capital Management, which manages a $100 billion portfolio. He received a $35 million compensation package, though $32 million of that was a single cash bonus. Simon Property Group CEO David Simon scored a $32 million package, the second-highest pay.

Construction company head: $500,000 to $1.5 million

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Sandy Lindenbaum of Kramer Levin Naftalis & Frankel

his hotel-condo tower One57. Indeed, their take-home pay changes from year to year based on how many deals their firms have done and how much of their own money they put into the deals. For example, if a developer puts in 5 percent of the equity in a project, they could still personally pocket a hefty 30 percent of the project’s profits, which is a common cut. In other words, if a new condo clears $100 million, the developer’s take could be a substantial $30 million. And to be sure, not all development

64 June 2012 www.TheRealDeal.com

Architect Robert A.M. Stern

than at private ones. And the sluggish national home-building environment may have sapped his pay in recent years, though in late May, his company’s stock was trading at about $28 a share, about the same as it was in 2007.

Top real estate investment trust (REIT) executives: $4 to $10 million

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EITs make no secret of their executives’ seven-figure salaries. After all,

he heads of major construction firms — the ones responsible for building the Big Apple’s most notable stadiums and skyscrapers — can see a major hit in take-home pay if the market is weak. That’s because profit margins within the industry are notoriously lean — hovering around 2 or 3 percent, sources said. And the salaries, a source said, are generally the same whether the firm is independent or owned by a deep-pocketed corporate parent (Tishman Construction, for example, which was recently purchased by global engineering firm Aecom). Since the 2008 financial crisis, New York City has lost 20 percent of its workforce, said Barry LePatner, a construction attorney. There are measurable signs of a comeback, however: in April, the city added 4,700 construction jobs,

according the state Department of Labor. Executives at the biggest and busiest construction firms probably can depend on a salary of $500,000 to $1 million, a combination of base salary and bonuses from profit sharing, said LePatner, who authored “Broken Buildings, Busted Budgets: How to Fix America’s Trillion-Dollar Construction Industry.” But they can swell to $1.5 million in a busy year, he added. Some of the biggest firms include Turner Construction Company, which is handling the ongoing renovation of Madison Square Garden; Tishman, which is building One World Trade Center and other towers at the site; and Fisher Brothers’ affiliate Plaza Construction, which put up 11 Times Square. Officials at the firms either declined comment or did not return e-mails.

Real estate lawyers: $100,000 to $2 million

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he city’s very top real estate lawyers — the ones who handle massive skyscraper transactions — are not scrambling to put food on the table. In some cases, they bring home $1 to $2 million per year. Top lawyers at major firms who might fall into that category include Jonathan Mechanic, a partner at Fried, Frank, Harris, Shriver & Jacobson; Stroock & Stroock & Lavan’s Leonard Boxer; and top landuse attorney Sandy Lindenbaum of Kramer Levin Naftalis & Frankel. All three declined to discuss their salaries, but they have, of course, worked on megadeals. Mechanic, for one, handled Kushner Properties’ $1.8 billion purchase of 666 Fifth Avenue in 2006 as well as the legal work for the building’s more recent refinancing. He said his expertise stems in part from his previous role as a principal at development firm HRO International. That experience “makes it easier for me to identify with my clients,” said Mechanic, who recently represented Morgan Stanley in its lease negotiations with Brookfield Office Properties at One New York Plaza. Boxer, for his part, spearheaded the complicated legal work that allowed Larry Silverstein to lease the World Trade Center towers in 2001 before the 9/11 attacks, he said. “All I can say is that people pay for results, and pay for respectability, and that’s what I feel I add to any of my clients I represent,” he said, adding that a key to his success is his firm’s 40-attorney real estate practice. Meanwhile, Lindenbaum’s recent accomplishments include the rezoning of Columbia’s new Manhattanville campus, Continued on page 92

PHOTOGRAPH OF BOXER BY RENÉ PEREZ;www.TheRealDeal.com PHOTOGRAPH OF LINDENBAUM January BY HUGH HARTSHORNE 2011 25


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A TALENT FOR GETTING DEALS DONE. BETTINA SCHRIVER AND ANDRE ROUACH KNOW NEW YORK CITY. ASKELLIMAN.COM ©2012. Prudential Financial, Inc. and its related entities. An independently owned and operated broker member of Prudential Real Estate Af filiates, Inc., a Prudential Financial company. Prudential, the Prudential logo and the Rock symbol are ser vice marks of Prudential Financial, Inc. All material presented herein is intended for information purposes only. While, this information is believed to be correct, it is represented subject to errors, omissions, and its related entities, registered in many jurisdictions worldwide. Used under license. Equal Housing Oppor tunit y. changes or withdrawal without notice. All proper t y information, including, but not limited to square footage, room count, number of bedrooms and the school district in proper t y listings are deemed reliable, but should be verified by your own at torney, architect or zoning exper t.

PDE The Real Deal April Schriver-rev14.indd 1

3/30/12 3:15 PM


ARCHITECTURE REVIEW

|

JAMES GARDNER

Fordham’s honeycomb hideout

Delicate curtain wall at I. M. Pei–designed law school will prevent dull fortress that some feared would rise

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hroughout the past year, some of New York City’s most conspicuous real estate ventures have been buildings developed by institutions of higher education — a sector that’s undergoing a massive (and very public) infrastructure expansion. But projects on such an imposing scale do not go up in this town without a great deal of controversy. Debates have raged about Columbia University’s northward move into Harlem, about the prospect of an entirely new campus for Cornell University on Roosevelt Island and about NYU’s proposed expansion deeper into the West Village — which The Real Deal covered in last’s month issue. In addition, only a few months ago I reviewed in this column the newly opened annex, at 58th Street and 11th Avenue, of John Jay College of Criminal Justice (part of the City University of New York). And now the New School’s so-called “zig-zag” building, constructed according to designs by Skidmore Owings and Merrill, has topped out at 65 Fifth Avenue on the corner of 14th Street. This month I focus on the Lincoln Center area, which has seen its biggest addition in nearly half a century in the form of Fordham University’s new law school. The building — which also houses an undergraduate residence hall — broke ground a year ago and has now witnessed the topping and partial cladding of the bulk of the building, with the tower still to come. If all goes according to plan, the present structure will only be the beginning of Fordham’s proposed $1.6 billion expansion, which will ultimately comprise six buildings in the vast area the institution now occupies only partially, just south of Lincoln Center’s Damrosch Park and David H. Koch Theater, on 62nd Street. The university hopes to complete the full expansion by 2033. This new law school–residence hall is the work of the illustrious New York– based firm of Pei, Cobb Fried and Partners, which has been altering the city — mostly for the better — over the past 50 years. This is the firm that was responsible, half a century ago, for the elegantly modular Kips Bay Plaza at 33rd

66 June 2012 www.TheRealDeal.com

Street and Second Avenue, as well as NYU’s even better faculty housing complex, known as Silver Towers, which was conceived in a similar style. The firm was also involved more recently, and less memorably, in the Four Seasons Hotel on East 57th Street and, perhaps

most regrettably, in the Jacob K. Javits Convention Center, which is now slated to be razed. Farther afield, this firm has given the world the Rock and Roll Hall of Fame in Cleveland, the Pyramid of the Louvre in Paris, the newer wing of Washington’s National Gallery of Art and the Bank of China Tower in Hong Kong. When the plans for the $250 million Fordham Law School were initially proposed, there was the expected opposition from the local community boards. “No to the Fordham Fortress!” was the battle cry of the locals, at the prospect of this high-rise on 62nd Street between Columbus and Amsterdam avenues. When this first phase of Fordham’s expansion is finished in about two years, it will contain, in addition to the law

school, a massive library with 560,000 volumes and a tower that will house 430 students. The predictable epithet of “fortress” is doubtless a response to the base of the building. Like the recently opened John Jay structure only two blocks away, as

This ability to evolve with the times — if not always ahead of the times — is evident in the Fordham project, as well. If the renderings are to be believed, it will look quite charming when it’s completed and can be seen from the main plaza of Lincoln Center, flanked, as in a theatrical stage set, by the Koch Theater and the Metropolitan Opera. From that standpoint, it reads as a composite of a building, in which several rather different parts and styles coexist. This is more in keeping with certain collage-aesthetic Deconstructivist projects of a decade ago than with what architects are doing today. The pale base appears mainly as a patterned tissue of alternating windows and infill. It gently curves and winnows, a motif that lends an air of insubstantiality to the hulking structure. A model of Fordham University’s under-construction law school, That feeling is enwhich is scheduled to be finished in about two years. Insets from hanced by the way the top: a rendering of the project; architect I.M. Pei, whose firm structure hovers over designed the structure. its ground-level supwell as the New School’s addition, the ports. To the west, a darker curtainbulk of this latest project is a nine-story walled annex is already emerging from base, or pedestal, that unapologetically the main pedestal, reaffirming the strict occupies its designated plot. There ap- grid from which the curving pedestal pears, as the building exists now, to be departs. Further mitigating the severity of the little effort made to mitigate or conceal its hulking bigness. grid is the 22-story residential tower, The project appears to be fully in which is really a slab more than a towkeeping with the career of I. M. Pei, now er, and, when completed, will be covered 95 years old, and his firm. Although he over most of its surface by a sheerer curcame of age during the reign of the In- tain wall than that of the smaller attachternational Style, throughout his career ment to the west. he’s exhibited a resistance to the paredAll in all, given the delicacy of the curdown strictures of that mode of design. tain wall that will cover the tower, the efAlthough his modular work at Kips Bay fect should be one of far greater lightness, and on the Silver Towers uses the pure inventiveness and interest than the dull concrete beloved of the Brutalists, his fortress that the local community board firm managed to enliven both buildings feared would be built. with a textural richness that was largely Thus far, with the site of Fordham’s alien to Classical Modernism. Manhattan campus sadly under-develFrom there it was not so difficult to oped, its relationship to Lincoln Center make the transition to the rich travertine has always seemed hesitant and confused. tones and dimensions of his work at the But with the completion of this new buildLouvre (in the area that he designed un- ing, and especially with the completion of derneath the glass pyramid) and in the the grander expansion — if it ever comes National Gallery, as well as the traces of to pass — Fordham will do as much for historicism that can be found in the Four Lincoln Center as Lincoln Center now Seasons Hotel in midtown. does for it. TRD


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Q&A

Legal lessons

NYC real estate lawyers are still untangling distressed deals, but are also seeing a pickup in “complex” transactional cases BY MELISSA DEHNCKE-MCGILL ust as the law is a living and breathing entity, as the saying goes, the lawyers who deal with it are alive and well in New York City these days. While New York’s top real estate attorneys saw a major slowdown in work during the recession, their caseloads (and billable hours for that matter) have picked up steadily in the last year. This month, The Real Deal talked to prominent lawyers, who described a legal environment that’s more akin to the steady-and-stable pre-boom days than to the frenzied boom itself. Sources did report dealing with a hangover of distressed deals — especially as underwater loans come to maturity and need to be dealt with by banks that have already extended them in the past. And they say there are still plenty of disputes among partners who’ve gone into real estate deals with each other, along with recapitalizations on buildings that need financial restructuring. But they also say their work has now

J

Robert Ivanhoe

global real estate practice chair, Greenberg Traurig How is the climate for real estate lawyers in NYC today compared to a year ago, two years ago and during the boom? The industry’s very deep slowdown in 2009–2010 affected real estate lawyers in most law firms significantly. Today, things are much improved, with continued recovery of distressed real estate assets as well as the return of acquisitions, refinancings and recapitalizations. ... We are not in a boom period, as we were in 2004–2008, but things are much improved from where we were two years ago. There was a lot of legal work related to distress after the financial crisis. Are you still dealing with work related to stalled projects, foreclosures, restructurings and other forms of distress? Yes, there is still a steady stream of resolution of distress caused by the overleveraging of assets during the boom, though perhaps it’s slowed a bit and the pickup in other areas has made it a smaller portion [of our work]. Remember, historically low interest rates and the attitudes of banks and special servicers allowed overleveraged assets that had cash flow, as most do in New York, to get through the recessionary cycle better than most expected. This “kicking the can down the road” environment is ending as more loans reach maturity and require resolution. Values have recovered from their lows and banks have repaired their balance sheets sufficiently [so] they can now take the losses resulting from loan resolutions or loan sales. 68 June 2012 www.TheRealDeal.com

What are the most common real estate– related lawsuits you’re seeing today, and how is that different from a year ago, two years ago and during the boom? While some of [the default and bankruptcy] cases and issues remain ongoing ... new cases [tend to involve] disputes between partners in real estate transactions. Those cases often involve issues such as decision-making within the partnership, one partner’s failure to contribute capital, a desire to exit the investment, a new party’s desire to enter the partnership and the duty a partner has to its partners in carrying out its responsibilities versus doing what is in that partner’s own best interest. There was a big consolidation of the legal industry after the downturn. How is the hiring situation now? It’s most like it was prior to the boom. Slow, careful, controlled growth based on demonstrable client needs and demand. During the boom, it was analogous to being on a treadmill where the speed was turned up and we were trying to keep up with client demands, and rapid lateral hiring was the principal way to do that. During the 2009–2010 period, the work fell off significantly, as did our hiring. We’ve heard that some NYC developers are farming out legal work to lawyers in Westchester and other suburbs to avoid paying the higher rates that top Manhattan firms charge. Have you seen that? I have seen some of this. I think real estate, as in other areas of practice, is bifurcating economically somewhat into highstakes, high-value matters and what clients view as commodity matters. On the latter, they’re looking for strategies to save costs. What are the most positive and worrisome trends you’re seeing in the real estate legal world? The positive trend is that the work is a bit more steady, predictable and manageable

broadened into other areas, including building trades, joint ventures, air rights purchases, development site acquisitions and more. The new environment has also led to more sophisticated deals, which, of course, require more sophisticated lawyering. However, sources also said that clients have become more cost-conscious and are reluctant to pay exorbitant legal fees. Meanwhile, one attorney said that today’s hiring is “slow, careful, controlled growth based on demonstrable client needs and demands.” In contrast, during the boom, he said, “it was analogous to being on a treadmill where the speed was turned up too quickly and we were trying to keep up with client demands [through] rapid hiring.” For more on what our top lawyers think about the collapse of the once-prestigious firm Dewey & LeBoeuf (see related story on page 30), which new laws they are watching and the most common types of lawsuits they’re seeing, we turn to our panel of experts. than it was during the boom of the 2004– 2008 period or the ensuing downturn. ... [On the other hand] I’m most troubled by RFPs where clients just seek the lowest cost provider, often without an existing relationship and without the parties fully understanding how each other operates or what’s involved in the matter for which the bid is being made. Are there any new or pending laws that are impacting — or are expected to impact — NYC real estate? The implementation of Dodd-Frank and its impact on the real estate industry. This can range from how banks conduct their lending and securitization activities to how real estate investment managers, banks and investment banks run their businesses in the real estate area to how various derivatives that are used in real estate will be regulated or otherwise affected. [Because] the Dodd-Frank regulations are still in discussion, many of these questions remain unanswered. We are also looking at how possible changes in the tax law — such as the change in the taxation of carried interests in real estate

efits and the status of rent-regulated apartments. The reconciliation of these cases will ultimately affect the future implementation of our rent regulatory system.

Jay Neveloff

partner, Kramer Levin Naftalis & Frankel Dewey & LeBoeuf has been going through a public meltdown. Aside from that, how is the climate for real estate lawyers in NYC? What happened with Dewey really had very little to do with the real estate market. Dewey had its own issues. I’m particularly bullish on New York real estate. I have been for a while, and that’s based upon the deal-flow I’m seeing. I’m seeing existing buildings trading, I’m seeing development sites being purchased and owners proceeding full speed to develop the sites. I’m seeing lenders lend. On top of that I’m seeing the existing deals being restructured and recapitalized, and I think that’s a very good sign. I’m also see-

“I think real estate, as in other areas of practice, is bifurcating economically somewhat into high-stakes, high-value matters and what clients view as commodity matters. On the latter, they’re looking for strategies to save costs.” ROBERT IVANHOE, GREENBERG TRAURIG or repeal of the [Foreign Investment in Real Property Tax Act] — will impact real estate investment. What are the biggest real estate cases you’ve been watching in NYC? There are several legal developments I’ve been paying particular attention to. One is the series of cases which are trying to reconcile the interplay between the J-51 tax ben-

ing development air rights being bought and sold, meaning they’re going to be used for development of towers. We haven’t seen that in a while. What are the most active areas of your real estate practice these days? A lot of deals that we’ve seen during the past year have been recapitalizations of existing deals. There were [many distressed www.TheRealDeal.com May 2006


Q&A deals where] the bank restructured its loan; maybe the owner or borrower gave up a portion of equity. I believe we’ll continue to see a number of those deals as CMBS loans are maturing next year. ... [But] now I’d say the clear majority of the work is new economic transactions, such as hotels being sold or development sites being developed. There are joint ventures or air-rights types of agreements. The U.S. Supreme Court recently declined to hear a case brought by a NYC landlord challenging the city’s rent-stabilization laws. Was that a fatal blow to the movement to overturn the law? The fact that the Supreme Court decided not to hear the case certainly didn’t help the cause of overturning rent stabilization and rent control. Whether it was a fatal blow or whether it was just a pipe dream, it’s hard to tell. I am not aware of anybody who had expected rent stabilization and rent control to go away in New York, so I haven’t seen any deals that were underwritten even with the glimpse of possibility that stabilization or control would go away.

Evan Levy

partner, real estate group, Skadden, Arps, Slate, Meagher & Flom What are the most active areas of your practice now? There is certainly more activity in the real estate private equity fund space. While the fund-raising environment is still difficult, there are more funds in the market raising money. We are also more active in the health-care real estate space. There are also significantly more development projects than there were two years ago. What are the most surprising trends you’re seeing in the world of real estate law? I’m surprised by the level of competition our clients are experiencing in securing transactions. Given the level of market activity — which is increasing, but is still not robust — it really reflects the limited number of real estate assets and investment opportunities hitting the market that meet the objectives shared by many investors. ... On the flip side, non-favored asset classes and non-favored transactions are much harder to get done. There seems to be a great focus on a small spectrum of the real estate market. What are the most positive and worrisome trends you’re seeing? The most favorable trend is that there is more investor confidence — both among U.S. and offshore investors. We are seeing new real estate private equity funds being formed and equity capital being invested. We are [also] seeing alternative lenders providing financing for the non-core in-

vestment class. The most trouble we see continues to be in the availability of debt financing. While improved, the debt financing markets have not fully recovered, and there is a significant amount of real estate debt — known as the “wall of debt” — that will need to be refinanced in the next two years. It probably got pushed out a couple of years with loan extensions, but the availability of financing does not yet meet the level of that wall of debt. Are there any new laws or pending laws that you’re watching? There has been a recent change to the law as part of Dodd-Frank, which gives new regulatory authority to the Commodity Futures Trading Commission to much more closely regulate swaps transactions. Many investors and real estate funds hedge their interest rate risk through interest rate hedges or swaps, which will now be subject to some level of regulation by the CFTC. For a largely unregulated space in the industry, that represents a significant change. The other significant legal change, also a result of Dodd-Frank, is the types of entities that need to register as registered investment advisors under the Federal Investment Advisers Act. This has required a very significant number of fund sponsors and advisors, who previously were generally unregulated, to register as investment advisors with the SEC.

Jonathan Mechanic partner, Fried, Frank, Harris, Shriver & Jacobson What are the most common real estatelawsuits you’re seeing in NYC today? It varies. There are foreclosures and bankruptcies, although there are less of those since a lot of them have worked through the system. There were a lot of litigations arising out of the so-called “good-guy guarantees,” — signed guarantees that were supposed to be limited to [situations where] you filed for bankruptcy, committed fraud or stole money. I think lenders had more expansive readings of what those guarantees are supposed to say. There is a fair amount of litigation arising out of that. What are the most positive and troubling trends you’re seeing in the legal industry? The positive is the amount of activity and the sophistications of the transactions. The only concern is the availability of financing. It’s much more available than it was, but it’s not as flexible, particularly in terms of construction lending. I don’t think there is the availability or breadth of participants that we’d like to see in the lending market. What are the most surprising trends you’re seeing right now? I would say in [situations] where economic expectations [have] changed, people looked for other ways to recoup their investments when they had made

bad investment decisions and they tried to stretch legal interpretations. We represented a borrower involving a case on Lexington Avenue where a tax payment hadn’t been made. They were waiting for a partner to make his contribution, [but] the lender took the position that put the whole loan — $150 million — in recourse because a $100,000 tax payment hadn’t been made [even though it] was made within the grace period. It went to court and the judge agreed that it made no sense — in fact, the loan wasn’t in recourse. The obligation had been met.

Ron Sernau

co-chair, real estate department, Proskauer Rose How is the climate for real estate lawyers in NYC today? In our practice, we basically have two flavors of lawyers: finance and “dirt” lawyers. The dirt lawyer typically represents real estate companies. We are on the side of people getting the money, building the buildings — that’s what I do all day. ... Each year since 2008, the finance business has slowly come back, nowhere near where it was in 2007, and the dirt side has really been coming back. In the last year, we have seen a tremendous increase in the level of our work. There are still some reasons to worry, but there’s definitely been a substantial increase on the dirt side in the past year. How is the hiring situation these days? When the market goes into a downturn, we all stop hiring and allow our junior ranks to diminish. Then the market turns around — right where we are now — and all of a sudden we need to hire people and we can’t find any. That’s exactly the situation now. Proskauer is like other law firms in New York City in that we all reacted in the same way, so now there is really no such thing as a third-year real estate associate. We are now paying the price for that, because we have to basically train up some associates who were not in the pipeline during the downturn.

Sherwin Belkin

partner, Belkin Burden Wenig & Goldman Was the Supreme Court’s decision to not hear a rentstabilization case a fatal blow to overturning the law? We filed an amicus brief for CHIP [the Community Housing Improvement Program] on the case in question — the Harmon case. We were very disappointed that the U.S. Supreme Court elected not to hear the case. But the Harmon case did

spur a national dialogue on the inequality of rent regulation — for both owners and tenants. I do expect that the industry will continue to look for potential constitutional challenge. Can you tell us about any real estate cases your firm has been dealing with? An area that we’re increasingly involved in is quality of life disputes between residential tenants, with our client — the [building] owner — caught in the middle. ... Tenants seem more willing to fight with one another [these days] over noise, smells, smoke, children running, etc. In addition, the tension between unit owners and renters in the same building is escalating. Finally, even in co-ops and condos, the tension between unit owners and boards has increased.

Ross Moskowitz

partner, Stroock & Stroock & Lavan What are the biggest challenges to being a real estate lawyer in NYC today? The challenge, maybe, is understanding the business model better than you did before. At least for our clients you can’t look at deals as one-offs. Client A may be making a purchase of a midtown property, but I need to understand what their whole portfolio is. I need to know what this deal is in terms of the context of everything else they are working on. Has the client changed their business model? [Maybe] they are only going after Class B buildings now or they’re only going after new construction or that this is a purchase that they are going to flip. ... So you have got to ask those questions. Everyone now realizes that moving too quickly is not the right strategy. Clients are more patient and therefore they are looking for lawyers to be part of the overall business strategy. Are there any new laws or pending laws that you’re watching? There seems to be a push within the city council to make landmarking laws more restrictive. I don’t know how much traction that is going to get, but that certainly will have an impact on development. It’s not just the big developer [impacted by that]; it impacts co-ops, too. ... [There is also] a discussion within the administration to change the zoning within midtown to allow buildings to be built bigger than currently permitted. The reason for that is a lot of the buildings in midtown are overbuilt under today’s zoning. So if you were to knock a building down, you couldn’t necessarily build it as high as it was. The administration is undertaking this in conversation with REBNY and others that maybe they need to up-zone certain areas. TRD www.TheRealDeal.com June 2012 69


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NEW JERSEY

Fort Lee redevelopment plan unveiled Illinois-based Tucker Development has unveiled plans for the western half of a $1 billion redevelopment project near the George Washington Bridge, the Record reported. The developer is seeking approvals for Hudson Lights at Fort Lee, which would include some 165,000 square feet of retail, 477 residential units, a

175-room hotel and parking for about 1,175 cars. The Fort Lee Hudson Lights at Fort Lee

planning board in March approved plans for the eastern half of the project, which includes two

47-story residential towers — the tallest structures in Bergen County — in addition to a restaurant, museum, movie theater and park. The eastern half is being developed by Fort Lee Redevelopment Associates. Together, the projects — Fort Lee’s largest redevelopment effort to date — would add 1,379 residential units and more than 187,000 square feet of commercial space to the borough. If the Hudson Lights portion is approved, construction could begin as early as this summer, the developer said.

CONNECTICUT

Home prices drop in CT, but sales volume up The number of Connecticut single-family home sales rose in the first quarter, while median prices dropped to their lowest level since 2003, according to data released last month by Boston-based real estate analysts the Warren Group. Sales of single-family homes rose more than 5 percent to 4,157 in the first quarter of 2012, up from 3,950 in the previous quarter. Sales in March, meanwhile, rose 4.5 percent to 1,610, up from 1,540 in the same month of 2011. But the median sales price for single-

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family homes in the first quarter was $215,000, down 6.5 percent from $230,000 in the same period of 2011. That is the lowest median sales price recorded statewide since 2003. A total of 1,134 Connecticut condos sold in the first quarter, a 1.4 percent increase from 1,118 in the same period of last year. In March, condo sales plummeted 10 percent to 430 transactions, down from 480 in March of 2011. Median sales prices for condos also decreased, dropping more than 4 percent to $158,250 from $165,000 quarterover-quarter. “In studying patterns of previous housing slumps and recoveries, I’m not surprised median prices are continuing to drop,” said Timothy Warren, CEO of the Warren Group. “Home sales volume will continue to rise, but it will take several more months for median prices to follow.”

LONG ISLAND

King’s Point “Great Gatsby” mansion sold

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The estate said to have inspired the West Egg mansion in F. Scott Fitzgerald’s classic “The Great Gatsby” has sold, Newsday reported. The 20-acre property, known as the Brickman Estate, had been on the market since September 2010 and was listed for $39.5 million. At press time, the sale price and buyer’s identity had not yet been released to the public. The deal was brokered by Brickman Estate

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Diane Polland, a sales associate in the Great Neck office of Coldwell Banker Residential Brokerage. Set at the tip of a private peninsula, the estate was last owned by the late John Handler, who passed away in 2008. The stucco mansion, built in the early 1850s, is believed to be the last remaining 19th-century mansion on the North Shore of Long Island. The estate has 10 residential buildings and 1,600 feet of waterfront, with views of New York City, the Long Island Sound and Manhasset Bay. Fitzgerald lived in Great Neck in the 1920s, when he began writing “The Great Gatsby.” Compiled by Russell Steinberg


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The Boston skyline

Meg Ryan’s house

LOS ANGELES Actress Meg

Ryan, best known for her roles in “Sleepless in Seattle” and “You’ve Got Mail,” has listed her Bel Air home for $11.4 million, Realtor.com reported. The 6,877-square-foot, six-bedroom house had previously been on the market for $19.5 million. The house, previously rented by actress Diane Keaton, is set on a promontory yielding city and ocean views, and comes with a pool, guest house and a screening room.

Boston

Atlanta

After 13 years of negotiations, New England Development last month

Following the approval of North American Properties’ $600 million

finalized a deal to take over well-known eatery Anthony’s Pier 4 and

Avalon project, the Atlanta suburb of Alpharetta will soon be home

launch a three-building project across the South Boston waterfront

to the southeast’s first so-called “experience center,” with retail, res-

pier. With development partner Hanover Co. of Houston, the firm

taurant, residential, office, hotel and public spaces all at the same site,

will spend around $150 million to build a 21-story luxury apartment

Commercial Property Executive magazine reported. The development

tower on Seaport Boulevard, the Boston Herald reported. The 369-

will span 87 acres and include a 14-story office tower, 559,000 square

unit apartment tower is set to open in the fall of 2014, followed by a

feet of retail, two hotels, 250 rental apartments and 132 homes for sale.

hotel and condo complex. Anthony’s Pier 4 will eventually move into

Ten percent of the site will also be used for public space, including a

the base of the hotel. The iconic restaurant, operated by the Athanas

park. The project is slated for completion in October 2013.

family, opened in 1963, but business suffered during the recession. The restaurant’s current spot at the far end of the pier will become a

Chicago

park — an open-space trade-off for the building density the develop-

John Hancock Real Estate paid $102 million for 150 North Michigan

ers requested for the rest of the site. According to Trulia, the median

Avenue, also known as the Crain Communications Building, REBusi-

sale price for a home in South Boston is $375,000, down 3.1 percent

nessOnline reported. The 41-story, 661,482-square-foot building

from this time last year.

was previously owned by SEB Investment GmbH, a German real es-

Las Vegas

Billy Joel

MIAMI BEACH Singer-songwrit-

er Billy Joel listed his 8,800square-foot, Mediterraneanstyle mansion for $14.8 million last month, Curbed.com reported. Joel and then-wife Katie Lee purchased the bay-front home, located on the island of La Gorce, for $13.5 million in 2006. The home has seven bedrooms, an outdoor kitchen and a pool.

tate investment manager, which purchased the property for roughly $113.2 million in 1999. The building was recently named for Crain

The owners of the Sahara, a Las Vegas hotel and casino, last month

Communications when the publishing company moved in, leasing

received $300 million in financing from JPMorgan Securities to

about 66,000 square feet. Known for its diamond-shape roof and

redevelop the property, according to reports. The casino, which has

proximity to Millennium Park, the building is the most recent addi-

been shuttered since last year, is owned by Stockbridge Capital Group

tion to John Hancock’s $4.3 billion real estate portfolio, which in-

and the development company SBE. In 2014, the Sahara will reopen

cludes 19.3 million square feet of office space across the country. John

as SLS Las Vegas, with 1,600 guest rooms, along with restaurants,

Hancock is the American unit of Manulife Real Estate, the real estate

MALIBU Goldie Hawn and Kurt

bars and clubs. The Las Vegas gaming market saw a 15.8 percent

arm of Canadian insurer Manulife Financial. Metro Chicago’s office

year-over-year revenue increase in February. At the same time, hotel

market expanded in the first quarter of this year, with vacancy rates

occupancy in the city grew to 85.7 percent from 83.3 percent during

dropping to 14.5 percent from 15.1 percent in the same period of 2011,

the same period of last year, according to the Las Vegas Convention

according to market data from Transwestern. The direct vacancy rate

and Visitors Authority. Weekend occupancy grew 1.3 percent to 90.8

in the East Loop neighborhood, where the Crain building is located,

percent in the same 12-month period, while midweek occupancy in-

was 12.6 percent for the first quarter, up from 11.6 percent in 2011.

creased 1.2 percent to 77.6 percent.

Compiled by Zachary Kussin

Russell last month put their Malibu beach house on the market. The asking price is $11.2 million, down $3.5 million from the last time it was listed, according to the Los Angeles Times. The fourbedroom home measures 4,300 square feet and has a gym.

72 June 2012 www.TheRealDeal.com

Goldie Hawn’s house


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Midtown office building sets price record A 16,676-square-foot midtown office building hit the market last month with a $65 million price tag. That comes to just under $4,000 per square foot — the highest asking price ever for a Manhattan office property on a persquare-foot basis, according to the Wall Street Journal. The Beaux-Arts building is structurally a residential mansion, but has been used as offices for the last several years and is being marketed as such. The building, at 7 West 54th Street between Fifth and Sixth avenues, is being sold by an investment group led by hedge fund Zimmer Lucas Capital that bought the property for $13 million in 2005. Paula Del Nunzio of Brown Harris Stevens has the listing. She said she envisioned a buyer using it as a company headquarters with a residence upstairs. The record price for a large office building in Manhattan is less than $1,600 per square foot, brokers told the Journal.

Sitt looks to sell Meatpacking retail for $45M Joseph Sitt’s Thor Equities is seeking $45 million for a Meatpacking District property it bought five years ago for about half that amount, Crain’s reported. Thor commissioned Jones Lang LaSalle to find a buyer for the three-story, 15,525-squarefoot building, at 446 West 446 West 14th Street 14th Street, between Washington Street and 10th Avenue, which it bought for $23.4 million in 2007. While it’s unclear whether Thor will get

its full asking price, the neighborhood has seen meteoric price growth in the last five years. In 2003, rents hovered around $70 per foot for retail space. But rents in the area — now a major tourist destination that’s seen an influx of high-end and name-brand stores — have skyrocketed to $500 per square foot for prime spaces. Still, sources told Crain’s the price was “no bargain.”

Manhattan multifamily portfolio on the block A package of six mixed-use buildings on the Lower East Side and in Hell’s Kitchen is for sale with an asking price of $35 million. The five-story walk-up properties — located at 43 Clinton Street, 163, 165 and 167 Ludlow Street and 436 and 438 West 52nd Street — consist of 96 apartments and 163–167 Ludlow Street five retail stores. The prewar buildings total approximately 53,745 square feet, including 5,700 square feet of retail space. Sixty percent of the residential units are deregulated, and the rents for the regulated units are considerably below market rate, according to the listing. The buildings can be purchased as a package or individually. Michael Besen and Matthew Slonim of Besen & Associates are handling the sale.

Village conversion property for sale A 45,032-square-foot, eight-story former Hertz garage in Greenwich Village is on the market for potential conversion into a hotel, office or residential space. The New

York Post reported that the pricing is expected to exceed $600 per square foot, or more than $30 million total. Steve Hornstock, Alan Cohen and Adam Maxson of ABS Partners have the listing for the property, which is located at 12 East 13th Street, between University Place and Fifth Avenue. Many of the developers who’ve looked at the property are interested in building a residential building with four to five apartments on each 5,441-square-foot floor, according to unnamed sources cited by the Post. Public records show Darren Postel has owned the property since 2002. The price he paid is not listed.

Partially constructed LES hotel asking $28M An unfinished Lower East Side hotel is on the block for $28 million, Crain’s reported. Massey Knakal is marketing the 16-story, 98-room Allen Street Hotel at 139–141 Orchard Street. The site can also be purchased in combination with a five-story, mixed-use building and vacant lot, located at 77–79 Rivington Street for a grand total of $35 million. “The hotel is topped out with concrete and there is steel and some electrical work and plumbing put in,” 139–141 Orchard Street Michael DeCheser, director of sales for Massey Knakal, told Crain’s. “It’s a rare opportunity to complete a boutique hotel.” Maverick Real Estate Partners acquired the loan on the hotel at a discount after the developer defaulted on its $19 million mortgage last year. Compiled by Linden Lim

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Deal Sheet summary

The Deal Sheet, on pages 78 to 88, covers transactions from 4/11/12 through 5/10/12. Please submit future deals to deals@therealdeal.com.

Sales

Overview

By type

Property sales Deals Dollars

50 $1,097,540,000

Financing

By dollar volume (in millions)

Development

9

Development

Hotel

0

Hotel

Industrial

4

Industrial

2

Mixed-Use

Mixed-Use Multi-family

25

140.60 0 66.27 12.77

Multi-family

402.08

Transactions

16

Office

6

Office

449.87

Buildings

17

Retail

4

Retail

25.95

Aggregate value

$45,100,000

Leases Office

42

Retail

51

Total

93

Leases square feet Office

996,771

Retail

153,390

Total

1,150,161

Office leases Office leases by industry Industry

Office leases sf by industry Leases

Industry

Top tenant reps for office leasing by sf

Square feet leased

Advertising & Marketing

1

Advertising & Marketing

Architecture & Design

3

Architecture & Design

Communications

1

Communications

Construction

1

Construction

Fashion*

4

Financial

4

Food & Beverage

2

Food & Beverage

Health & Beauty

1

Health & Beauty

Legal

3

Legal

Media

1

Media

Medical

3

Medical

30,872

Other / n/a

11

Other / n/a

40,005

Publishing

1

Publishing

Retail

2

Retail

Science & Technology

3

Science & Technology

Transportation

1

Transportation

5,625 23,082

Tenant representative

Square feet leased 481,000

Cassidy Turley Cushman & Wakefield

43,609

9,750

MB Real estate

42,000

10,121

Pinnacle Realty

36,945

Fashion*

82,168

Adams & Co.

34,168

Financial

39,612

Colliers International

31,609

44,550

Locations RE

27,115

A.C. Lawrence

23,649

Studley

18,032

Lee & Associates

13,000

Jones Lang LaSalle

12,750

CBC Hunter Realty

10,121

361,000

Cresa Partners

8,400

153,500

CBRE Group

5,625

23,740

Fountain Realty Group

4,000

20,945

M.C. O’Brien

120,000 29,695 2,106

3,757

Retail leases Top tenant reps for leasing by sf

Retail leases by industry

Broker

Drugstore

Square feet leased

Retail leases sf by industry 3

Drugstore

33,000

Pliskin Realty

19,950

Fashion

10

Fashion

40,608

PBS Real Estate

19,613

Food & Beverage

13

Food & Beverage

22,196

Isaacs & Co.

15,537

Health & Beauty

4

Health & Beauty

7,900

Robert K. Futterman & Assoc.

14,233

Home Furnishings

2

Home Furnishings

16,392

Lansco Corp.

12,208

Other

Other

33,294

NAI Friedland Realty

11,255

Newmark Grubb Knight Frank

10,645

M.C. O’Brien

8,972

Dallimore & Co.

8,108

Bond NY

4,000

Gene Schwimmer (independent broker)

3,740

Winick Realty

3,000

CBRE Group

2,000

(*includes showroom space)

19

www.www.TheRealDeal.com June 2012 77


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 4/11/12 to 5/10/12. Please submit future deals to deals@therealdeal.com.

Office leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

1745 Broadway

361,000

Random House / Richard Bernstein, Cassidy Turley

SL Green; the Witkoff Group; SITQ Immobilier / Represented in-house

The book publisher signed a five-year lease renewal for the second through 13th floors, the New York Post reported. With the company’s 645,000 square feet in the building set to expire in 2018, the tenant signed an early lease extension on the 361,000 square feet it wanted to retain.

200 Lafayette St

130,000

JCPenney / n/a

Kushner Companies; CIM Group / S. Kurland, D. Falk, J. Greenstein, D. Levine, Newmark Grubb Knight Frank

The department store signed a 15-year lease for the entire building, which will be used for its corporate offices, the New York Post reported. The reported asking rent was $68 per square foot.

350 Fifth Ave (Empire State Building)

120,000

Coty / R. Bernstein, R. Giordano, Cassidy Turley

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

The beauty products company signed an expansion lease, bringing its total occupancy to nearly 320,000 square feet on six floors. This is the second time the tenant has expanded in the building following its original 90,000-squarefoot lease in 2008.

218 West 18th St

42,000

Red Bull / MB Real estate

Atlas Capital Group; GreenOak Real Estate / P. Turchin, S. Siegel, G. Rothkin, B. Fastenberg, Z. Snider, CBRE

The energy-drink company signed a lease for its first New York City office, encompassing the seventh and eighth floors as well as the ground floor and lower level. The space will house the tenant’s corporate operations as well as the Red Bull Music Academy.

609 Greenwich St

32,000

The Row / n/a

Centaur Properties / Newmark Grubb Knight Frank

The apparel company signed a lease for the entire second and third floors, the New York Observer reported.

2275 Coleman St (Brooklyn)

27,115

B-K Care Inc. / Locations RE

Kings Plaza Associates / M.C. O’Brien

The regional home health care agency signed a lease.

463 Seventh Ave

23,768

David Peyser Sportswear Inc. / David Levy, Adams & Co.

The Arsenal Company LLC / David Levy, Adams & Co.

The outerwear and sportswear company signed a lease. The reported asking rent was $37 per square foot.

1385 Broadway

23,500

Ideeli / L. Manoff, J. Lund, Colliers International

B. Bros Broadway Realty LLC / J. Serko, G. Greenspan, D. Gaines, D. Malawer, C&W

The online retailer signed a lease for the entire third-floor office space.

37-18 Northern Blvd (Queens)

20,945

Logisticare Solutions LLC / Joshua Kleinberg, Pinnacle Realty

n/a / Joshua Kleinberg, Pinnacle Realty

The non-emergency transportation management firm signed a lease.

605 Third Ave

20,000

Davidoff Mailto & Hutcher / A. Sachs, B. Shapiro, T. Citron, C&W

Fisher Brothers / Represented in-house

The law firm signed a lease renewal, the New York Post reported.

1140 Sixth Ave

17,609

City National Bank / C&W

n/a / M. Shenot, D. Neye, R. Masiello, Jones Lang LaSalle

The bank signed a 10-year lease for the entire second-floor office space and the building’s corner retail space on the ground floor and concourse.

34 West 33rd St

17,000

Cutie Pie Baby / n/a

n/a / n/a

The baby products company signed a lease on the fifth floor. The tenant is relocating from a smaller, 9,000-square-foot space on the ninth floor.

22-19 41st Ave (Queens)

16,000

Model Talent Project LLC / Joshua Kleinberg, Pinnacle Realty

n/a / Joshua Kleinberg, Pinnacle Realty

The modeling agency signed a lease.

183 Madison Ave

13,000

The Spector Group / D. Someck, M. Kunikoff, Lee & Associates

n/a / Henry Blair, C&W

The architectural firm signed a lease on the second floor, the New York Post reported. The tenant is relocating from 19 West 44th Street.

1140 Sixth Ave

12,750

Waterfall Asset Management / C. Kraus, B. Higgins, Jones Lang LaSalle

n/a / M. Shenot, D. Neye, R. Masiello, Jones Lang LaSalle

The financial services firm signed a 10-year lease for the entire seventh floor. The tenant is relocating from 1185 Sixth Avenue.

10 West 33rd St

10,400

AHQ / David Levy, Adams & Co.

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

The fashion accessory company signed a six-year lease. The reported asking rent was $39 per square foot.

1001 Sixth Ave

10,121

The McKissack Group of Companies / M. Okun, R. Gottlieb, CBC Hunter Realty

ABS Partners / Represented in-house

The construction management firm relocated and signed a long-term lease.

1040 Sixth Ave

9,750

Exec-Comm / William Montana, Studley

Skyline Developers / W. Cohen, R. Kass, Newmark Grubb Knight Frank

The communications consultants signed a 10-year lease for the entire 20th floor. The asking rent was $50 per square foot.

50 West 23rd St

9,040

High 5 Games / Lily Lin, A.C. Lawrence

Two Trees Management / Caroline Pardo, Two Trees

The technology company signed a five-year lease with a five-year option on the 11th floor. The tenant will occupy a temporary space on the fifth floor until its new office is ready.

120 West 45th St

8,400

Intermedia.net Inc. / B. Stella, E. Wartels, Cresa Partners

SL Green / D. Biassotti, D. Kleiner, F. Doyle, Jones Lang LaSalle

The cloud computer services provider signed a seven-year lease. The tenant is relocating from 156 West 56th Street.

1040 Sixth Ave

8,282

Dorma Group North America / David Dusek, Studley

Skyline Developers / W. Cohen, R. Kass, Newmark Grubb Knight Frank

The manufacturer of architectural door systems signed a 10-year lease for the entire 22nd floor. The asking rent was $52 per square foot.

One Grand Central Place

8,109

Aronauer Re & Yudell / Greg Wang, Colliers International

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

The law firm signed a lease on the 14th floor. The tenant is relocating from 444 Madison Avenue. Greg Wang represented the tenant while he was at Colliers International, but he has since moved to Newmark Grubb Knight Frank.

370 Lexington Ave

6,300

The Active Network / n/a

Sherwood Equities / Represented inhouse

The online technology firm signed a lease to consolidate its Manhattan offices.

1350 Broadway

6,000

Carrier / David Itzkowitz, C&W

W&H Properties / R. Silver, A. Sciacca, N. Rubin, Newmark Grubb Knight Frank

The HVAC company signed a lease on the 23rd floor.

805 Third Ave

5,753

Talara Capital Management / Lily Lin, A.C. Lawrence

C&W / Omar Farooq, C&W

The hedge fund signed a two-year, four-month sublease on the 20th floor.

30 West 24th St

5,625

Syndicate Media Group / John Termini, CBRE

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

The marketing agency signed a five-year lease. The reported asking rent was $39 per square foot.

8 West 37th St

4,450

Unithree LLC / H. Vinik, J. Bates, D. Rosen, C. Salizzoni, A.C. Lawrence

n/a / Joseph Mangiacotti, CBRE

The coaching company for executives signed a seven-year lease.

833 Broadway

4,000

Levo League / David Gomez, Fountain Realty Group

n/a / H. Vinik, J. Bates, D. Rosen, C. Salizzoni, A.C. Lawrence

The women’s career counselors signed a 10-year lease for the entire fifth floor.

632 Broadway

3,500

Bain Capital Ventures / n/a

n/a / Nora Stats, Tarter Stats O’Toole

The venture capital company signed a lease on the eighth floor.

16 Court St (Brooklyn)

2,557

Laser Eye Practice of Brooklyn / M.C. O’Brien

SL Green / Ingram & Hebron

The eye care specialist signed an office lease.

For the best deal visit our website: www.TheRealDeal.com 78 June 2012 www.TheRealDeal.com

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5/30/12

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

222 West 36th St

2,550

n/a / n/a

n/a / Piotr Wloch, Empire Properties

A Manhattan restaurant chain signed a long-term lease for corporate offices. The reported asking rent was $30 per square foot.

313 West 37th St

2,450

n/a / n/a

n/a / Piotr Wloch, Empire Properties

A modeling agency signed a lease. The reported asking rent was $23 per square foot.

555 Eighth Ave

2,106

Reverbnation Inc. / David Youngworth, Redwood Property Group

Sloyer Forman / n/a

The media company signed a lease.

285 West Broadway

1,800

Partizan Entertainment / n/a

285 West Broadway Associates / Joshua Salon, Salon Realty

The television production company signed a five-year lease.

42 Greene St

1,800

Stranger & Stranger / Scott Bennett, Prime Manhattan Realty

Zar Property NY / Represented inhouse

The packaging design company signed a five-year lease for the penthouse space.

325 Broadway

1,586

William Chuang / Lily Lin, A.C. Lawrence

325 Broadway Associates / Alexis Feldman, Feldman Realty Group

The law firm signed a short-term lease.

75 Maiden Lane

1,485

The Expert Instate Group / T. Hatzimichael, Redrock NYC; M. Moutstakas, My NY Commercial Group

AM Properties / Represented in-house

The tenant signed an office lease. The reported asking rent was $33 per square foot.

813 Quentin Rd (Brooklyn)

1,200

Dr. Raphael Gadeh / M.C. O’Brien

813 Quentin Road Associates / M.C. O’Brien

The dental office signed a lease to relocate to a larger space in the neighborhood.

255 West 36th St

1,000

Metro Analytical Laboratories / Adam Rosen, A.C. Lawrence

251 West 36th St. Realty LLC / Freddy Srour, Freddy Srour Inc.

The asbestos-testing company signed a lease.

1270 Broadway

825

ABC Employment Agency Inc. / Adam Rosen, A.C. Lawrence

CNA Cornerstone Inc. / n/a

The employment agency signed a lease.

152-156 Madison Ave

745

Butterfly Artistic Media LLC / Adam Rosen, A.C. Lawrence

Winoker Realty / Barry Bernstein, Winoker Realty

The children’s education company signed a lease.

185 Madison Ave

250

6 Degrees of Celebration / Adam Rosen, A.C. Lawrence

Hilson Management Corp. / Jason Schwalbe, Hilson Management Corp.

The event-planning company signed a lease.

Retail leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

655 Madison Ave

17,776

DKNY / L. Pomerantz, J. Brod, PBS Real Estate

Plaza Associates LLC / A. Roos, M. Cohen, Colliers International

The fashion retailer signed a lease renewal for its flagship store.

175th St and Hillside Ave (Queens)

14,500

Walgreens / Marvin Hartman, Pliskin Realty

Valen Partners LLP / n/a

The drugstore signed a 20-year ground lease.

64-68 Wooster St

13,500

Herman Miller / Marc Simon, Isaacs & Co.

Zar Property NY / Represented inhouse

The furniture retailer signed a short-term lease for a pop-up store.

500 West 23rd St

10,000

CVS / J. Pruger, R. Kaplan, T. Gallina, Newmark Grubb Knight Frank

Equity Residential / C. Slosberg, P. Berkman, Newmark Grubb Knight Frank

The drugstore signed a lease for another location.

1031 Southern Blvd (The Bronx)

8,500

Walgreens / R. Herko, S. Lorenzo, NAI Friedland Realty

Simpson West / R. Herko, S. Lorenzo, NAI Friedland Realty

The drugstore signed a lease for another location.

48 West 37th St

5,800

The National Council of the Boy Scouts of America / D. Rosenberg, A. Stern, RKF

n/a / D. Levy, J. Friedman, Adams & Co.

The Boy Scouts’ retail unit signed a lease for multilevel space. The new store will have 2,200 square feet on the ground floor, 2,200 square feet on the lower level and 1,400 square feet of mezzanine space.

6218 20th Ave (Brooklyn)

4,500

Sunny Day Adult Day Care Corp. / M.C. O’Brien

6218 20th Avenue LLC / M.C. O’Brien

The provider of adult day care services signed a retail lease.

980 Madison Ave

4,338

Rebecca Taylor / S. Dallimore, Dallimore & Co.; R. Abrams, Lansco Corp.

RFR / R. Futterman, B. Rosen, J. Totolo, RKF

The women’s designer label signed a lease for its third Manhattan location. The space consists of 1,901 square feet on the ground floor and 2,437 square feet on the lower level.

11 West 51st St

4,000

Spain Taste New York Corp. / Joseph Robinson, Bond NY

11 West 51 Realty LLC / Joseph Robinson, Bond NY

The tenant signed a 15-year lease to relocate its Spanish restaurant, Lizarran, previously located at 45 Mercer Street, to a larger space.

566 Nostrand Ave (Massey Knakal)

4,000

n/a / n/a

n/a / Andrew Clemens, Massey Knakal

A 99 cent discount store signed a lease.

121 Wooster St

4,000

Piperlime / n/a

n/a / n/a

The online clothing purveyor signed a lease for its first permanent retail store.

980 Madison Ave

3,770

Vince / S. Dallimore, Dallimore & Co.; R. Abrams, Lansco Corp.

RFR / R. Futterman, B. Rosen, J. Totolo, RKF

The contemporary clothing line signed a lease for another Manhattan location.

530-532 and 605 Main St (Roosevelt Island)

3,740

Wholesome Factory; Island Wine & Spirits / Gene Schwimmer (independent broker)

Hudson Related Retail LLC / Hal Shapiro, Winick Realty

The purpose-formed business entity signed leases for an organic food market and a wine and spirits store.

77-79 East 115th St

3,400

n/a / n/a

n/a / J. Lovatt, M. Hefferon, Massey Knakal

A Laundromat signed a lease for 2,500 square feet of ground-floor space and 900 square feet on the mezzanine level.

3524 Johnson Ave (The Bronx)

3,000

Oregano Bar & Bistro / n/a

Friedland Properties / n/a

The restaurant signed a 15-year, triple-net lease, the New York Post reported.

1623 York Ave

3,000

EVF Performance / Amie Claps, Lansco Corp.

n/a / Victor Menkin, Menkin Realty Services

The physical training facility signed a 10-year lease. The reported asking rent was $40 per square foot.

52 East 13th St

3,000

Revolve / L. Block, A. Shinn, Winick Realty

n/a / Rudy Demasi, Safeguard Realty

The fitness studio signed a lease for its first New York City location, the New York Post reported.

1989 Third Ave

2,892

MB Natural Furniture / A. Schuster, G. Covey, H. Abramowitz, RKF

n/a / A. Schuster, G. Covey, H. Abramowitz, RKF

The furniture retailer signed a lease.

110 East 59th St

2,300

Yankees Clubhouse Shop / Represented in-house

n/a / Dennis Brady, Jack Resnick & Sons

The sportswear shop signed a 10-year lease renewal, the New York Post reported.

980 Madison Ave

2,037

Sandro / David Baker, Isaacs & Co.

RFR / R. Futterman, J. Totolo, B. Rosen, RKF

The Parisian fashion label signed a lease for its third Manhattan location.

93 Greene St

2,000

Chloe / Paul Muratore, CBRE

n/a / Christopher Owles, Sinvin Real Estate

The fashion designer signed a lease, the New York Post reported. The asking rent was in excess of $300 per square foot, according to the Post.

80 June 2012 www.TheRealDeal.com


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Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

30 West 34th St

1,837

Vince Camuto / L. Pomerantz, B. Ende, PBS Real Estate

Sol Goldman Investments LLC / J. Pruger, K. Ota, T. Gallina, Newmark Grubb Knight Frank

The lifestyle brand signed a lease for a new store. The asking rent was $500 per square foot.

45 Mercer St

1,800

Galli / n/a

45 Mercer Street LLC / Joseph Robinson, Bond NY

The Italian American restaurant signed a 10-year lease.

78 Fulton St

1,800

Rich Young / A. Schuster, R. Berkowitz, RKF

n/a / n/a

The fashion retailer signed a lease.

370 Lexington Ave

1,700

Zucker’s Bagels & Smoked Fish / Warren Newcorn, Newcorn Realty Co.

Sherwood Equities / Represented inhouse

The bagel shop signed a lease for another location.

289 Livingston St (Brooklyn)

1,700

The Wingstop / Greg Batista, Pliskin Realty

n/a / n/a

The restaurant signed a 10-year lease.

740 Allerton Ave (The Bronx)

1,675

DP Group General Contracting / S. Lorenzo, J. Rivera, NAI Friedland Realty

Allerton Associates LLC / S. Lorenzo, J. Rivera, NAI Friedland Realty

The construction company signed a retail lease.

365 Madison Ave

1,641

Swarovski / R. Cohen, J. Totolo, RKF

RHC Operating LLC / G. Alterman, P. Haber, RKF

The jeweler signed a lease for its eighth Manhattan location. The new store will be located at the base of the Roosevelt Hotel.

690 Utica Ave (Brooklyn)

1,600

Hong Kong Pavilion / Jeffrey Pliskin, Pliskin Realty

Plaza 700 Associates LLC / n/a

The Chinese restaurant signed a lease.

875 Sixth Ave

1,548

Saehan Bank / J. Mun, R. Buckley, SBC Associates

n/a / Peter Braus, Lee & Associates

The California-based bank signed a retail lease.

4916 Church Ave (Brooklyn)

1,400

Boost Mobile / M.C. O’Brien

4918 Church Avenue LLC / M.C. O’Brien

The wireless services provider signed a lease for another location.

1124 Bedford Ave (Brooklyn)

1,313

WhipperSnapper / n/a

n/a / Andrew Clemens, Massey Knakal

The baby boutique signed a lease.

2130 Ralph Ave (Brooklyn)

1,250

Liberty Travel / Jeffrey Pliskin, Pliskin Realty

Whitman Plaza Associates LLC / n/a

The travel agency signed a lease.

791 Madison Ave

1,100

Innovate Life / Amie Claps, Lansco Corp.

Friedland Properties / Represented in-house

The spa signed a lease. The reported asking rent was $76 per square foot.

774 Nostrand Ave (Brooklyn)

1,100

Gold Star Coverage Ltd. / M.C. O’Brien

Nostrand Avenue Associates Holding LLC / M.C. O’Brien

The tax preparation services provider signed a retail lease.

604 Sixth Ave

1,100

Cohen’s Fashion Optical / H. Gilbert, R. Gelber, RKF

n/a / n/a

The eyewear retailer signed a lease.

3 East Fordham Rd (The Bronx)

1,080

Viral / Rick Stassa, NAI Friedland Realty

ISJ Management / Rick Stassa, NAI Friedland Realty

The tenant signed a retail lease.

80 Nassau St

1,000

Stamina Grill & Juice Bar / G. Alterman, H. Abramowitz, RKF

n/a / n/a

The restaurant signed a lease.

961 Columbus Ave

1,000

Sheshe Pizzeria / n/a

n/a / David Chkheidze, Massey Knakal

The pizzeria signed a long-term lease.

Whitestone Realty Group, Inc (212) 662-1300

We are aggressively looking to purchase off market multifamily large or small apartment and office buildings in the 5 boros of NYC and NJ • Top Dollar Paid • No Mortgage Contingency / Quick Closing • Brokers Welcome Nathan Blatter Head of Acquisitions handled the following transactions that signed or closed in the last 60 days in 2012:

MANHATTAN

BROOKLYN

BROOKLYN

NORTH BRONX

MANHATTAN

BROOKLYN

BROOKLYN

QUEENS

$20,000,000 Midtown-Development Site Signed April 2012

$84,000,000 Package of prime buildings of non-performing notes Signed May 2012

82 June 2012 www.TheRealDeal.com

$19,000,000 2-6 story pristine elevator buildings in upper class neighborhood Contract signed April 2012 $9,000,000 6-story pristine elevator building Contract signed March 2012

$2,000,000 20 unit building in upper class neighborhood Closed March 2012 $10,000,000 6-story pristine elevator building in prime upper class neighborhood Contract signed March 2012

$6.6 Million Pristine 6 story elevator building Contract signed 4/16/12

$10,000,000 Pristine elevator building Signed Feb 2012

www


Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

3128 Villa Ave (The Bronx)

1,000

Villa Pizza / n/a

Zar Property NY / Represented inhouse

The pizza restaurant signed a 15-year lease.

65-01 Woodhaven Blvd (Queens)

900

Sprint Nextel / Greg Batista, Pliskin Realty

n/a / n/a

The wireless services provider signed a five-year retail lease.

2153 Utica Ave (Brooklyn)

800

Queen of Stylez / M.C. O’Brien

5001 Avenue N / M.C. O’Brien

The beauty salon signed a lease.

257 Sixth Ave

800

Jack’s Stirbrew Coffee / n/a

n/a / A. Schuster, R. Berkowitz, RKF

The coffeehouse signed a lease.

98 Thompson St

750

Ernest Alexander Menswear / Robert Carbonara, First Allied Properties

n/a / Robert Carbonara, First Allied Properties

The menswear retailer signed a lease.

306 Union Ave (Brooklyn)

692

Actionline Insurance Brokerage Corp. / M.C. O’Brien

Brooklyn Neighborhood Housing Development Fund / M.C. O’Brien

The insurance brokerage signed a retail lease.

1566 Second Ave

645

DashLocker / Jay Gilbert, Newmark Grubb Knight Frank

Eberhart Bros. Inc. / Jay Gilbert, Newmark Grubb Knight Frank

The dry cleaning and laundry service signed a retail lease.

667 Classon Ave (Brooklyn)

480

MK Bull Inc. / M.C. O’Brien

Classon Village LP / M.C. O’Brien

The café signed a lease.

690-696 Lexington Ave

450

Ozger Enterprise / M. Kabiri, W. Stein, Manhattan Commercial Realty

n/a / Tony Park, PD Properties LLC

The retailer signed a nine-year lease.

994 Madison Ave

400

Phoenix Roze / n/a

n/a / S. Ferrigno, B. Rosen, RKF

The jeweler signed a lease.

1100 Madison Ave

400

Sundaram Tagore Gallery / n/a

n/a / Jill Lovatt, Massey Knakal

The art gallery signed a lease for ground-floor retail space.

32 West 40th St

376

Lady M Confections / n/a

40th Street Tenants Corporation / Jean Bates, A.C. Lawrence

The cake shop signed a 15-year lease.

Buys Address

Size

Buyer / Representative

Seller / Representative

Notes

161 Sixth Ave and 233 Spring St

2 office bldgs, 570,000 sf total

Stellar Management; Imperium Capital / D. Harmon, A. Spies, Eastdil Secured

Earle Kazis; Ronald Mount / n/a

The two buildings sold for $200 million, the New York Post reported. The buyers plan to combine the properties and modernize the facilities.

165 West 91st St and 393 West End Ave

2 apt. bldgs

A&E Real Estate Management / n/a

Hirth Real Estate Entities / Aaron Jungreis, Rosewood Realty

The pair of apartment buildings sold for a combined price of about $125.5 million. The West 91st Street building, which has 170,023 square feet of space and 15 stories, sold for $69.9 million; and the West End Avenue building, which has 134,183 square feet of space and 16 stories, sold for $55.6 million.

1370 Broadway

17-story, 275,000 sf office bldg

Normandy Real Estate Partners / n/a

Sitt Asset Management; Carlton Associates / D. Harmon, A. Spies, Eastdil Secured

The property sold for $125 million. The building went into contract in November 2011. Sitt Asset Management and Carlton Associates bought the property in 2003 from SL Green Realty for $57.18 million.

325 Hudson St

10-story, 241,000 sf office bldg

Jamestown Properties; Amerimar Enterprises; Hunter Newby / n/a

Bristol Group; YoungWoo & Associates / B. Shanahan, D. Stacom, CBRE

The building sold for $110 million. Bristol Group and YoungWoo & Associates purchased the vacant property for $18.5 million in 1999 and then invested about $33.9 million to redevelop it into an office, telecom and datacenter building.

210 and 220 East 22nd St

2 apt. bldgs, 208 units total

Broad Street Development; Crow Holdings / n/a

GID Investment Advisors / A. Scandalios, J. Cruz, J. Julien, K. O’Hearn, HFF

The properties sold for $85 million. The buying partnership will embark on a $2 million renovation of the fully occupied buildings. The properties consist of studios and one-bedrooms.

158-160 N. 4th St, 151-173 N. 3rd St and 237-241 Bedford Ave (Brooklyn)

Development site

RedSky Capital; Waterbridge Capital / n/a

n/a / G. Saffioti, B. Tapper, Eastern Consolidated

The group of parcels known as the Bedford portfolio sold for $66 million. The plots of land will be developed into 50,000 feet of retail space and 39 residential units.

1880 Bartow Ave (The Bronx)

147,520 sf storage bldg

CubeSmart / n/a

Storage Deluxe / n/a

The storage facility sold for $59.27 million. The purchase is part of a larger deal to acquire 22 self-storage facilities from Storage Deluxe for a total of $560 million, including the assumption of $88 million in debt. CubeSmart entered into contract to buy the massive portfolio last October.

Brooklyn portfolio

6 apt. bldgs, 376 units total

Shamah Properties / Aaron Jungreis, Rosewood Realty

Skyline NYC LLC / Aaron Jungreis, Rosewood Realty

The package of buildings in the Ditmas Park section of Brooklyn sold for $42.1 million. The properties are located at 2015 Foster Avenue, 1 St. Paul’s Court, 200 East 18th Street, 350 East 19th Street, 75 Hawthorne Street and 2101 Bedford Avenue.

133-135 Greenwich St

6,160 sf development site

Hidrock Realty; Robert Finvarb Companies / Adelaide Polsinelli, Eastern Consolidated

Sam Shapiro / R. Khodadadian, D. Schechtman, L. Lieberman, Eastern Consolidated

The vacant lot sold for $27.9 million, or $182 per square foot. The partners plan to spend an additional $70 million to develop a 28-floor, 300-room hotel on the site, which is slated to open in early 2015.

680 St. Nicholas Ave

8-story apt. bldg, 117 units total

Local operator / P. Von Der Ahe, S. Edelstein, S. Glasser, Marcus & Millichap

n/a / P. Von Der Ahe, S. Edelstein, S. Glasser, Marcus & Millichap

The property sold for $23.65 million. The building’s residential units range from studios to three-bedrooms, and there are five retail tenants in place. The property last traded hands in 2005 for $15.3 million.

55 West 92nd St

6-story, 55,535 sf apt. bldg, 54 units total

n/a / n/a

n/a / Aaron Jungreis, Rosewood Realty

The property sold for $20 million.

Brooklyn portfolio

3 apt. bldgs, 157,000 sf total

Sol Kopelowitz / D. Berger, A. Jungreis, Rosewood Realty

Urban American / Robert Knakal, Massey Knakal

The three buildings sold for $18.1 million. The properties are located at 350 Empire Boulevard in Prospect Lefferts Gardens and at 441 Brooklyn Avenue and 305 East 34th Street in East Flatbush.

301 East 61st St

45,012 buildable sf development site

n/a / Louise Beit, Sotheby’s International

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

The property sold for $15.4 million.

Greenwich Village portfolio

3 mixed-use bldgs

n/a / n/a

n/a / James Nelson, Massey Knakal

The three properties sold for $11.4 million. The buildings are located at 175177 and 179 MacDougal Street. The package includes 10 rent-regulated apartments, seven stores and two commercial office spaces.

450 Broadway

5-story, 13,760 sf retail bldg

Sitt Asset Management / Ivan Hakimian, HPNY

Jacob Wiesenfeld / Ivan Hakimian, HPNY

The property sold for $11 million. Sitt Asset Management plans to fix up the building with the aim of signing a net lease for the entire property with a midto high-level fashion tenant.

30 East 20th St

7-story office bldg

Walter & Samuels / Ivan Hakimian, HPNY

n/a / Ivan Hakimian, HPNY

The elevator loft building with two stores on the ground floor sold for $10 million.

210 Joralemon St

50,000 sf comm. condo

United American Land / n/a

n/a / n/a

The three floors of commercial space sold for $10 million. United American Land won a request for proposal from the city last year to redevelop the space as retail.

1307 Edward L. Grant Highway and 1201 Ogden Ave (The Bronx)

Two 6-story apt. bldgs, 119 units total

ELG1275 LLC / Ben Weiss, Besen & Associates

Stratford Five Realty LLC / A. Doshi, M. Slonim, Besen & Associates

The elevator buildings sold for $9 million, or $76 per square foot. The price represents a capitalization rate of 7.1 and a gross rent multiple of 6.9.

84 June 2012 www.TheRealDeal.com


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Discover the advantage of 360° views. Discover Cassidy Turley. Peter Hennessy President, New York Tri-State Region 212.318.9790 Peter.Hennessy@cassidyturley.com www.cassidyturley.com Tenant Representation / Project Leasing / Capital Markets / Project & Development Services / Property Management / Corporate Services


Buys continued Address

Size

Buyer/ Representative

Seller / Representative

Notes

546-52 West 146th St

3 apt. bldgs, 70 units total

n/a / C. Sosa, M. Griffith, Citi Habitats

Harlem 546-146 Associates LLC / V. Sozio, S. Shkury, M. Tortorici, J. Deutch, Ariel Property Advisors

The three adjacent buildings sold for $8.9 million, or about $190 per square foot. The properties contain eight one-bedrooms, 36 two-bedrooms, 26 threebedrooms and three super’s apartments.

100 Norfolk St

3,590 sf development site

n/a / n/a

n/a / Michael DeCheser, Massey Knakal

The property sold for $8.7 million, or about $200 per buildable square foot. The site, which has a two-story commercial building, has about 44,000 buildable square feet.

53 Broadway (Brooklyn)

15,780 sf development site

n/a / S. David Behin, MNS

Builders Bank / S. David Behin, MNS

The note for the vacant plot of land sold for $8.5 million.

58-60 Ninth Ave

2 apt. bldgs

Icon Realty Management / James Kinsey, ERG Property Advisors

Vectra Management Group / James Kinsey, ERG Property Advisors

The adjacent properties sold for $7.75 million. The ground-floor retail space is occupied by Pop Burger.

95 Third Ave (Brooklyn)

3 vacant lots

Naftali Group / B. Leary, R. Kelly, C. Sendogdular, CPEX Real Estate

Goldport Properties / B. Leary, R. Kelly, C. Sendogdular, CPEX Real Estate

The development site sold for about $6.72 million, or $122 per buildable square foot. The original plans call for a mixed-use building consisting of 43 residential units totaling 35,399 square feet, with 2,054 square feet of community-use space and 2,355 square feet of commercial space.

183 Columbia Heights (Brooklyn)

7-story apt. bldg, 13 units total

n/a / n/a

The Jehovah’s Witnesses / Massey Knakal

The elevator building sold for $6.6 million, Crain’s reported.

New York portfolio

4 apt. bldgs, 110 units total

Castellan Real Estate Partners / Amit Doshi, Besen & Associates

n/a / n/a

The properties were sold for about $6.39 million in accordance with a plan of reorganization through the U.S. Bankruptcy Court. The price represents a capitalization rate of 10 percent and a gross rent multiple of 4.56. The buildings are located at 304 West 147th Street, 518 West 136th Street and 133 West 145th Street in Harlem, and at 402-404 Riverdale Avenue in Yonkers in Westchester County.

237 East 10th St

7-story apt. bldg, 28 units total

Benchmark Real Estate Group LLC / n/a

n/a / David Shorenstein, Silvershore Properties

The elevator building sold for $6.3 million. The price represents a capitalization rate of 6 percent and a gross rent multiple of 10.2.

28 West 26th St

7-story, 14,217 sf apt. bldg, 27 units total

Benchmark Real Estate Group / n/a

Paul S. Phillos / Spiro Kartsonis, Vokar Realty Group

The elevator building sold for $6.25 million, or about $439 per square foot. The price represents a capitalization rate of 4.9 percent and a gross rent multiple of 12.5.

2196 Amsterdam Ave and 255 Audubon Ave

2 apt. bldgs, 47 units total

Karabelas & Papagianopolous LLP / Amit Doshi, Besen & Associates

Wayne Lopkin LLC / Amit Doshi, Besen & Associates

The two walk-up buildings sold for $5.7 million, or $127 per square foot. The price represents a capitalization rate of 7.4 and a gross rent multiple of 7.7.

22 East 13th St

5-story, 4,099 sf apt. bldg, 5 units total

Trevi Retail / n/a

n/a / J. Nelson, M. Levine, C. Hannigan, M. Nickerson, M. Bowman, Massey Knakal

The property sold for about $4.83 million, or $1,177 per square foot. The price represents a capitalization rate of 4.8 percent. The building has a two-level restaurant space that is currently occupied by City Tavern.

4706 and 4712 Fourth Ave

Two 4-story apt. bldgs, 32 units total

4706 and 4712 LLC / Adam Hess, TerraCRG

Dov Friedland LLC / n/a

The properties sold for $4.4 million, or about $183 per square foot. The price represents a capitalization rate of 8.4 percent and a gross rent multiple of 8.4.

79 Bogart St (Brooklyn)

46,000 sf development site

Bogart Plaza / V. Lopez, J. Wadler, Kalmon Dolgin Affiliates

BBM LLC / J. Kohn, A. Lieber, Kalmon Dolgin Affiliates

The parcel of land sold for about $4.38 million.

2435 Frisby Ave (Queens)

6-story, 41,400 sf apt. bldg, 43 units total

Winwood LLC / Devin Cohen, Rosewood Realty

Gjonbalaj Management LLC / Michael Kerwin, Rosewood Realty

The elevator building sold for about $4.22 million. The price represents a capitalization rate of 6 percent and a gross rent multiple of about 8. The property has 31 one-bedrooms and 12 two-bedrooms.

29 West 26th St

7-story apt. bldg, 6 units total

n/a / Ivan Hakimian, HPNY

n/a / John Ciraulo, Massey Knakal

The elevator building sold for $4.05 million.

6311 Ave N (Brooklyn)

1-story, 11,000 sf retail bldg

Forsyth St. LLC / n/a

n/a / A. Atbashyan, S. Bagdadi, Commercial Acquisitions Inc.

The property sold for $3.8 million.

34-24 Collins Pl (Queens)

2-story, 23,000 sf industrial bldg

n/a / D. Chan, T. Kontis, Harvest International

Chik Group Inc. / D. Chan, T. Kontis, Harvest International

The property sold for $3.65 million.

1482 First Ave

4-story, 6,888 sf apt. bldg

n/a / n/a

n/a / T. Gammino, P. Massey, Massey Knakal

The property sold for $3.01 million, or about $437 per square foot. There are about 16,000 square feet of air rights available for future development.

561 East 187th St (The Bronx)

6-story apt. bldg, 35 units total

561 East 187th St LLC / Sharone Sohayegh, Sohayegh Realty

Poggio Darpi Corp. / Sharone Sohayegh, Sohayegh Realty

The walk-up building sold for about $2.63 million.

103 Quentin Rd (Brooklyn)

6 comm. condos

Reach for the Stars School / A. Atbashyan, S. Bagdadi, Commercial Acquisitions Inc.

n/a / A. Atbashyan, S. Bagdadi, Commercial Acquisitions Inc.

The commercial condos sold for $2.6 million.

751 Commonwealth Ave (The Bronx)

10,000 sf office bldg

Amana Realty Corp. / Sharone Sohayegh, Sohayegh Realty

E & M Partners LLC / Sharone Sohayegh, Sohayegh Realty

The property sold for about $2.27 million. In addition to the offices, the building has five stores.

4380 Bronx Blvd (The Bronx)

2-story, 21,250 sf industrial bldg

n/a / n/a

n/a / Karl Brumback, Massey Knakal

The property sold for about $1.85 million, or $87 per square foot.

537 Lenox Ave

5-story apt. bldg, 8 units total

n/a / n/a

n/a / Bart Zimmermann, Barcel Group

The property sold for $1.8 million.

751 Tilden St (The Bronx)

5-story apt. bldg, 27 units total

n/a / Giuseppe Inglese, FriedmanRoth Realty

n/a / Giuseppe Inglese, Friedman-Roth Realty

The walk-up building sold for $1.75 million.

1621-29 61st St (Brooklyn)

Development site

n/a / n/a

n/a / J. Shalom, B. Hanson, Massey Knakal

The property sold for $1.7 million. The 8,000-square-foot site has a vacant commercial building.

653 Washington Ave (Brooklyn)

4-story, 6,000 sf apt. bldg, 8 units total

n/a / n/a

n/a / S. Palmese, P. Massey, Massey Knakal

The property sold for $1.68 million, or about $280 per square foot. The price represents a capitalization rate of 6.4 percent. The building contains two onebedrooms and six two-bedrooms.

15-19 Wythe Ave (Brooklyn)

1-story, 5,000 sf industrial bldg

n/a / n/a

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

The property sold for $1.5 million, or $300 per square foot.

2409-2411 Beaumont Ave (The Bronx)

5-story, 15,750 sf apt. bldg, 23 units total

n/a / Kelly Lin, Besen & Associates

n/a / Kelly Lin, Besen & Associates

The property sold for about $1.39 million, or $88 per square foot. The price represents a capitalization rate of 13 percent and a gross rent multiple of 5.

167 North 6th St (Brooklyn)

75,000 sf church bldg

n/a / S. David Behin, MNS

The Roman Catholic Church / Andrew Scandalios, HFF

The church building sold for $1.37 million.

1002 Bushwick Ave (Brooklyn)

26,740 buildable sf development site

n/a / n/a

n/a / Michael Amirkhanian, Massey Knakal

The property sold for $1.3 million, or $49 per buildable square foot. The site has a three-story building that is currently being used by a local nonprofit.

1741 Bath Ave (Brooklyn)

4,800 sf retail bldg

n/a / Angelo Patsis, The Patsis Company

n/a / Duke McCabe, CPEX Real Estate

The property sold for $1.15 million, or about $240 per square foot.

2121 First Ave

6-unit apt. bldg

n/a / Ohad Tabari, Living Real Estate Group

n/a / n/a

The property sold for about $1.08 million. The building has two stores.

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Financing Address

Size

Borrower / Representative

Lender / Representative

Notes

112-50 78th Ave (Queens)

580-unit apt. bldg

Forest Hills South Owners Inc. / n/a

NCB / n/a

A $15 million first mortgage was arranged for the building.

123-125 East 7th St

17-unit apt. bldg

n/a / Angela Ortiz, Besen Capital LLC

Local savings bank / n/a

A $4.3 million first mortgage loan was arranged to refinance the building at a rate of 3.625 percent.

17 East 89th St

62-unit apt. bldg

17 East 89th Street Tenants Inc. / n/a

NCB / n/a

A $3.1 million first mortgage and a $100,000 line of credit were arranged for the building.

511 West 232nd St (The Bronx)

66-unit apt. bldg

511 West 232nd Owners Corp. / n/a

NCB / n/a

A $2.3 million first mortgage and a $500,000 line of credit were arranged for the building.

233 Merrick Blvd (Queens) and 1471 Westchester Ave (The Bronx)

2 retail bldgs, 17 units total

n/a / Angela Ortiz, Besen Capital LLC

Local savings bank / n/a

A total of $2.6 million in first mortgage loans was arranged to refinance the buildings.

830-840 Park Ave

53-unit apt. bldg

Park and 76th St. Inc. / n/a

NCB / n/a

A $2 million first mortgage and a $500,000 line of credit were arranged for the building.

2525 Nostrand Ave (Brooklyn)

108-unit apt. bldg

2525 Nostrand Owners Corp. / n/a

NCB / n/a

A $2.4 million first mortgage was arranged for the building.

3101 Ocean Pkwy (Brooklyn)

106-unit apt. bldg

3101 Apartment Inc. / n/a

NCB / n/a

A $1.9 million first mortgage was arranged for the building.

35-38, 40, 44, 48 and 50 75th St (Queens)

209-unit apt. bldg

The Gardens 75th Street Owners Corp. / n/a

NCB / n/a

A $1.8 million second mortgage was arranged for the building.

145 95th St (Brooklyn)

72-unit apt. bldg

145-95 Apartments Inc. / n/a

NCB / n/a

A $1.7 million first mortgage was arranged for the building.

5610-5650 Netherland Ave (The Bronx)

462-unit apt. bldg

Netherland Gardens Corp. / n/a

NCB / n/a

A $1.4 million second mortgage was arranged for the building.

48 Great Jones St

13-unit apt. bldg

48 Tenants Corp. / n/a

NCB / n/a

A $750,000 first mortgage and a $500,000 line of credit were arranged for the building.

311-313 West 82nd St

22-unit apt. bldg

311-313 West 82nd St. Owners Corp. / n/a

NCB / n/a

A $1.1 million first mortgage was arranged for the building.

8-10 Bethune St and 791 Greenwich St

38-unit apt. bldg

8-10 Bethune/791 Greenwich St. Owners Corp. / n/a

NCB / n/a

A $1.1 million first mortgage was arranged for the building.

71 East 77th St

39-unit apt. bldg

71 East 77th Street Inc. / n/a

NCB / n/a

An $800,000 first mortgage and a $250,000 line of credit were arranged for the building.

203 West 87th St

39-unit apt. bldg

203-205 West 87th Street Owners Corp. / n/a

NCB / n/a

A $1 million first mortgage was arranged for the building.

Other Deals Crown takes stake in $1B Fifth Ave. portfolio The Cheras’ Crown Acquisitions acquired a 49.9 percent stake in a four-building Fifth Avenue portfolio that includes the Olympic Tower, the Wall Street Journal reported last month, although it could not confirm the terms of the deal. The transaction is expected to have valued the 51-story Olympic Tower, at 641 Fifth Avenue near 51st Street — plus a building at 10 East 52nd Street and two mansions north of the tower — at $1 billion. Crown purchased the stake from an affiliate of the Alexander S. Onassis Public Benefit Foundation. The foundation was created in his son’s honor by Aristotle Onassis, whose Victory Development first erected the tower in 1975. (The deal was announced after the deadline for the Deal Sheet.)

Citibank, Merrill Lynch renew 601 Lex leases In an effort to consolidate seven Midtown locations, Citibank renewed its 500,000-square-foot lease at 601 Lexington Avenue, the New York Observer reported last month. Citibank was previously interested in moving into a new office space during the downturn, according to unnamed Observer sources. Located between 53rd and 54th streets, Citibank’s 601 Lexington space marks Citibank’s largest facility in Manhattan. The building is owned by Boston Properties. Robert Alexander of CBRE Group led the team that represented Citibank. The rent was not indicated. Merrill Lynch, who is also a tenant in the building, renewed its lease for the full 46th and 47th floors, which combine for roughly 60,000 square feet. (The deals were announced after the deadline for the Deal Sheet.)

Jamestown to buy LIC building from Chetrits for more than $80M, sources say The owner of the Chelsea Market, Jamestown Properties, is in contract to pay more than $80 million for a massive, industrial-style office building in Long Island City, sources familiar with the deal said last month. The five-story property — which served as a warehouse for the famed department store Gimbel Brothers until it was converted to an 88 June 2012 www.TheRealDeal.com

office building in the 1980s — sits at 31-00 47th Avenue and covers an entire city block. The Falchi Building, as it’s called, is jointly owned by the Chetrit Group, headed by Joseph Chetrit, and principals of the Queens-based commercial brokerage Kalmon Dolgin Affiliates, city records show. (The deal was announced after the deadline for the Deal Sheet.)

Gluck’s 111 Kent Avenue sells for $56M Laurence Gluck’s Stellar Management and Largo Investments have sold 111 Kent Avenue, a 62-unit luxury rental building in Williamsburg, for just under $56 million, one year after the firm purchased the stalled project, sources told The Real Deal last month. The purchaser is American Realty Advisors, a Glendale, Calif.-based institutional investor and manager, sources said. Management of the building will be transferred to Cooper Square Realty, the largest residential property manager in New York City, from Stellar. The sale marks the highest price per unit ever paid for a multi-family building in the borough, according to data from Real Capital Analytics. (The deal was announced after the Deal Sheet.)

Lehman could facilitate second new Park Avenue office tower Just a few weeks after L&L Holdings requested proposals for Park Avenue’s first new office tower in three decades, speculation is growing that a second new tower could rise on the avenue. According to the New York Post, now that Lehman Brothers Holdings has full control over 237 Park Avenue it is considering building a new tower on the property, near 45th Street. Monday Properties both manages 237 Park Avenue and owns the neighboring building at 230 Park Avenue. The addresses were going to be merged for zoning lot purposes in order to construct a new tower around 237 Park Avenue. But to build that new tower, developers need about 1.5 million square feet of air rights, which is owned by Lehman Brothers and Argent Ventures. Now that Lehman has a stake in the properties, and con-

sidering it already has a stake in the air rights, perhaps the landlords can strike a deal for additional air rights and expand atop the existing structure or build a new one entirely, the Post said.

UWS home of Picholine trades for $26M A nine-story Manhattan residential building — longstanding home of the Michelin-starred restaurant Picholine — sold for $26 million after a bidding war between real estate investors, sources told The Real Deal last month. A partnership of Astoria Realty Partners and Mornos Realty was the victorious party, purchasing 35 West 64th Street, between Central Park West and Broadway, according to Friedman-Roth Realty Services, which represented the buyer. (The deal was announced after the deadline for the Deal Sheet.)

Steiner Studios grabs Carroll Gardens rental building for $24.5M Steiner Studios paid $24.5 million in cash to land a 60unit Carroll Gardens rental building, Crain’s reported. The building, at 204 Huntington Street, was sold by an investment team led by Area Property Partners, which acquired it along with an adjacent building at 505 Court Street, which has since been converted into a 124-unit condominium, for $50.5 million. Massey Knakal Realty Services marketed the property on behalf of Area, and asked $32.5 million for the building when it first came online in 2007. (The deal was announced after the deadline for the Deal Sheet.)

Plans filed to turn Bossert back into hotel Developer and landlord David Bistricer has filed plans to turn the Bossert Hotel in Brooklyn Heights back into a 302-unit hotel, according to Department of Buildings records cited by Brownstoner last month. Architect Gene Kaufman, who is behind the Hotel Chelsea’s restoration, is the architect of record to convert the building, which is being used as a residence for Jehovah’s Witnesses volunteers. TRD


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Negative pledge

from page 28

And of course, they want to ensure that those who buy in their buildings can do so with financial ease. “They only want legitimately rich people,” explained Michael Gross, author of “740 Park: The Story of the World’s Richest Apartment Building.” But those rich people don’t always want to put their money into real estate. During the boom, co-op boards likely knew the loans were issued to their shareholders; after all, mortgage documents are public record. But as the loans gained popularity, board members often looked the other way, brokers said. The building’s management company — and even buyers’ brokers — were often unaware of the loans, however. Last year, press reports suggested that Brown Harris Stevens’s building management arm had been aware of Swig’s loan at 740 Park and had allowed it because Swig is part owner of the brokerage. In response, BHS told the New York Observer that the firm had no knowledge “of any borrowings regarding the Swig apartment prior to Bank of America’s initiation of collection proceedings in 2011.” The statement continued: “The suggestion that Brown Harris Stevens would somehow violate the rules of a building it manages, and thus its fiduciary duties, in order to accommodate a principal is absolutely untrue and very

damaging to Brown Harris Stevens’ nearly 140-year-oldsterling reputation.”

Recognizing unrecognized loans During the recession, meanwhile, some boards began insisting that buyers have cash reserves on hand equal to the price of the apartment. Others began requiring prospective buyers to sign an affidavit swearing they had not obtained financing for the purchase. Banks, in turn, tightened up their requirements. Some banks that did negative-pledge loans in the past now refuse to lend without a recognition agreement from the co-op board for at least some part of the loan. These recognition agreements ensure that the bank has a valid lien against the property if the borrower defaults, lowering its exposure. “The banks want to make sure that [at least a part of their loan] is recorded,” Goldberg said. “A negative-pledge loan [in an all-cash situation] is essentially a personal loan. There’s really no security for that loan.” Michele Kleier, president and chairman of residential brokerage Gumley Haft Kleier, said while she regularly saw unrecognized loans in the past, she has not seen them reappear today. “If my clients are getting them, they’re not telling me,”

she said. Neil Garfinkel, an attorney and legal counsel for the Real Estate Board of New York, also said he has not seen “an unrecognized loan in a long, long time.” “Lenders are just being more careful about who they’re lending to,” he said. Yet some mortgage brokers said low interest rates have piqued borrowers’ interest in these loans, though buyers and banks alike are still cautious about them. Shnayder’s client, for example, inquired about a negative-pledge loan, but was still hesitant about the practice and wanted to make sure his mortgage would not come with a pre-payment penalty. That way if he changed his mind, he could pay back the entire balance at once without incurring additional fees, Shnayder said. Richard Martin, vice president of Gibraltar Private Bank & Trust, said the bank recently began gearing up to begin reissuing negative-pledge loans for the first time in three years, though the program is currently on hold pending a legal opinion. “The market’s improving, and we feel the demand [for unrecognized loans] is still there,” Martin said. “We feel more comfortable with them than we did when the market was at its low point.” TRD

Hamptons from page 47 bers have alleged that Republican town supervisor Bill Wilkinson sold the property, without an appraisal, for far less than its true value as a political favor to the developers. The issue has triggered a lawsuit from a group of residents challenging the board’s approval of the project. The board later ruled that approval of a basement in one of the property’s buildings would require a separate public hearing, to be held this month. The Montauk Beach House is scheduled to open on June 23, and Jones said he is confident about making that deadline, despite the recent controversy. “We found ourselves in the middle of a political sort of mess there,” he said. “I’d be misleading if I said it hadn’t cost us a little time and money, but we’re staying focused on getting open.” The process, Jones added, has been “like running a marathon with your legs tied together.”

Topping Rose House Montauk Highway (Bridgehampton) The 1842 building at the corner of Montauk Highway and the Bridgehampton–Sag Harbor Turnpike has been known, for much of its history, as the Bull’s Head Inn. But it’s now opening as the Topping Rose Inn, a joint hotel venture between business executives Bill Campbell and Simon Critchell and celebrity chef and restaurateur Tom Colicchio. The first seven of the hotel’s planned 22 rooms will open this summer, along with the restaurant and a space for private entertaining. A spa and the remaining hotel rooms will follow later this year. Campbell, the former chief executive of Philip Morris, reportedly paid $5 million for the site in 2006. He spent years securing town permits, and after Critchell joined him in 2010, the pair spent $12 million renovating the property. Colicchio, who joined the venture last fall and whose management company will operate the property with the hotelier Jeff Morgan, has said the restaurant should open in late summer. Through a spokesperson, all four

men declined to comment.

Salivar’s Restaurant & Bar 470 West Lake Drive (Montauk) This 24-hour, dock-front eatery, a fixture in Montauk for a half-century, is a popular stop for early morning egg sandwiches. It’s also home to the head of a great white shark caught in 1964 by famed fisherman Frank Mundus (reportedly the inspiration for the character of Quint in the movie “Jaws”). The property sold in November for $3.3 million to a married Manhattan couple — Jo-Ann and Brian Obergfell — who said they hope to maintain the restaurant’s colorful decor and unpretentious food while performing needed repairs and upgrades on the 3,649-square-foot building. Brian Obergfell is a commercial real estate attorney with the firm Emmet, Marvin & Martin, while Jo-Ann also has real estate in her genes, her husband told The Real Deal. Her Swiss immigrant grandfather, Joseph Portman, built more than 1,000 rental units in Manhattan after World War I. In addition, she sold a large stake in 150 East 72nd Street, an apartment building, to the developer Harry Macklowe last year. (In total, Macklowe paid $70 million for the building, which he plans to convert to condos.) The Obergfells bought Salivar’s from a relative of longtime owner Pete Chimpoukchis, who died in 2006. Town & Country’s Stacey Barnds brokered the deal. By the time the Obergfells bought the property, it had been on the market for more than a year and the price had fallen substantially from its initial listing price of $7 million. Brian Obergfell said his family is searching, carefully, for a tenant to operate the restaurant, likely beginning next year. “We’ve had a lot of interest, but we still haven’t decided,” he said. Locals have fretted over the possibility that the new Salivar’s could feel uncomfortably trendy and hip, but Obergfell said they shouldn’t worry. “It’s got taxidermied fish, actual fish hanging all over

the place, pictures from the 1950s,” he said. “I’ve been going out there since I was a little boy, and I used to sit at that counter and eat doughnuts with my father. It’s a cool place, and it would be a shame to change it.” The exception, he said, is the physical infrastructure: A new septic system is being installed, and work will begin on the building and a new dock after Labor Day.

Hamptons Players Club 103 Montauk Highway (East Hampton) Restaurateur Frank Cilione (see Beaumarchais above) has a new venture this summer: a polo-themed restaurant with a 1,500-square-foot beer garden. It will replace Gluckman’s Beachhouse restaurant, which opened in the building last summer and closed a few months later. Cilione, who did not return calls for comment, told the website HipHamptons.com that he and his partners had signed an 11-year lease on the property and brought in Hector Diaz, a chef from Cilione restaurants in Miami and Palm Beach, to create a modern American menu.

Bell & Anchor 3253 Noyac Road (Sag Harbor) David Loewenberg and Sam McCleland, who are already partners in the Beacon restaurant in Sag Harbor, are taking over a restaurant space at the Mill Creek Marina that was formerly occupied by Oasis. Details on the broker and terms of the deal were not available.

Nammos Estiatorio 136 Main Street (Southampton) Nello Summertimes, the former tenant here, opened in 2005 as the Hamptons outpost of a popular Madison Avenue restaurant. It quickly gained a reputation for its high prices — $17 for a plate of mixed berries and $40 appetizers. Nammos, its Greek and Mediterranean replacement, is more modest, if only by comparison. Owners include Tim Salouros and Thomas Makkos. Details of the deal were not available. Nammos was scheduled to open over Memorial Day weekend. TRD

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Executive pay

from page 64

he said, and Vornado’s planned 15 Penn Plaza. But not all lawyers are millionaires. In-house counsel positions at development companies or brokerage firms tend to pay $300,000 to $500,000, attorneys said. At the other end of the spectrum, meanwhile, are those lawyers who handle closings on single-family homes in the outer boroughs. The more closings they can pack in, the more they can make, though owing to the slower pace of closings today, that number tops out at around $100,000, sources said.

Architects: $60,000 to $5 million

W

ell-known “starchitects” obviously pocket the biggest fees in their field. In a good year, a big-name architect working on a large commercial project can make up to $5 million, sources said. But the number of brand-name building designers who can command such hefty fees — like Frank Gehry, Richard Meier, Robert A.M. Stern, David Childs, Norman Foster and Jean Nouvel — can be counted on just a few fingers. A general rule of thumb is that design fees are 10 to 15 percent of a construction budget, though if there’s a starchi-

tect on the project, that is usually split with the architect of record, who oversees the nuts and bolts of the job. Salaries for nonstarchitects are far less stratospheric. The average salary for a design director at a New York firm is around $150,000 a year, according to the 2011 compensation survey from the American Institute of Architects. And the salaries slide off from there. An unlicensed entry-level designer at the same firm might make about $60,000, the survey shows. The U.S. Bureau of Labor Statistics, meanwhile, puts the city average at $80,000. TRD

Commercial market report from page 24 renewal deal. CoStar estimated the rent for the space to be $55 per square foot. LivingSocial was represented by CBRE Group brokers Brad Needleman, a senior vice president, and Adam Schultz, a senior associate. They both declined to comment. Esther Zar, a managing director at Murray Hill Properties who is active in the Midtown South market, said despite the European banking troubles, local tech firms have continued to sign leases as they raise funds from venture capitalists. “As I see it, Midtown has not risen in rents the way that Flatiron has,” she said, noting that below 23rd Street she has seen asking rents rise over the past six months from the high $30s and low $40s per foot to the mid-$50s and up. “You are even seeing side-street buildings [in the Flatiron District] asking $50 per square foot, which is unbelievable,” she said. Midtown South showed the greatest rise for the month in asking rents. They jumped by $0.81 per foot to $43.09 per square foot, as the availability rate declined slightly by 0.1 point to 8.2 percent, according to the Colliers data. The

numbers indicate a market that’s much tighter than the markets in Midtown or Downtown.

Downtown Media firms have been heading Downtown for more than a year now, with the most high-profile example being Condé Nast, which signed a deal to lease more than 1 million square feet at 1 World Trade Center last year. But some media firms are leaving Midtown South because they are unable to find enough space in the more expensive Flatiron and Soho areas. Instead, they are heading south to lower Manhattan. An entertainment development company called Half Yard Productions, which created popular reality cable shows such as “Say Yes to the Dress,” signed a 10-year deal last month to take 12,730 square feet on the ninth floor at 50 Broad Street, CoStar shows. Asking rents are $29 per foot to $30 per foot in the building. The company said moving Downtown makes sense for its business model on two key fronts. “Half Yard is expanding the company’s footprint in New

York and wanted a space closer to our network partners,” said firm cofounder and executive producer Abby Greensfelder. Cushman & Wakefield brokers James Searl, Bernhard Weinstabel and Courtney Adham represented the building, while Paul Bostick, a partner with Midtown-based tenantrepresentation firm Brentler, represented Half Yard. Bostick declined to comment on the lease, but said there is a shift in Manhattan driven in part by the booming Midtown South. Indeed, he said, Downtown is benefitting because some tenants can’t find a home in Soho or the Flatiron District. In Midtown South, “they found space that did not work for them or was too expensive, but they were able to find space that works for them in the Financial District,” he said. The Downtown market was the only one to see a decline in asking rents, with average prices falling by $0.11 per foot to $44.85 per square foot. Yet the news was not all bad. The availability rate declined more than the other two districts, falling by 0.3 points to 15.8 percent, Colliers statistics showed. TRD

Silverstein plans huge Far West Side residential-retail building Broker for project seeking a large grocery store tenant for growing neighborhood BY ADAM PINCUS AND KATHY CLARKE eveloper Silverstein Properties is roughing out designs for an approximately 60-story residential and retail tower on Manhattan’s West Side, a block from the firm’s Silver Towers project. The new building, at 514 11th Avenue between 40th and 41st streets, is in the early stages and has not been formally announced, a source familiar with the development said last month. While the overall size of the building has not been laid out, the retail portion of the project is expected to be between 150,000 and 250,000 square feet. Silverstein will partner on the project with MercedesBenz of Manhattan, which owns the land. The site is the former showroom for the luxury automaker, which relocated to 555 West 53rd Street last year. A spokesperson for Silverstein declined to comment on the project. The firm, headed by CEO Larry Silverstein, has already brought more than 2,000 residential units to the West Side with two projects: Silver Towers, the twin-towered rental at 600 West 42nd Street, and the 41-story tower at 1 River Place. Silverstein is currently building the 72-story 4 World Trade Center and the retail base of 3 World Trade Center. The new 11th Avenue building is part of a residential construction boom on the West Side. Brookfield Office Properties recently shifted gears at its Manhattan West project at Ninth Avenue and 33rd Street, and is now considering adding as many as 900 residential units to what was previously conceived as office space. Robert K. Futterman & Associates is representing Silver-

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92 June 2012 www.TheRealDeal.com

stein to find a tenant for the retail space. The blended asking rent (for ground-floor and upper-level space) is about $75 per foot, said company CEO Robert Futterman. The neighborhood, with its booming residential population, is in need of a large grocery store, he added. The space is Larry Silverstein “pretty unique,” he said, “because where else do you have over 200,000 square feet of retail, with parking, in New York?” His company won the leasing assignment in late 2011, over a few competing firms. Futterman recently landed a Russian restaurant company for the long-vacant retail site at 11 Times Square, at 42nd Street and Eighth Avenue. Also last month, a New York State Supreme Court judge denied a motion to dismiss several causes of action in a discrimination lawsuit filed by former Silverstein Properties executive Catherine Giliberti against her former employer,

paving the way for the case to continue, according to court records filed last month. Giliberti filed suit against the firm in October, claiming that her dismissal was prompted solely by her age — she was 55 at the time — and gender. Giliberti, who worked at Silverstein Properties on and off from 1987 till 2008, oversaw leasing for the firm’s entire 6.7 million-square-foot Downtown portfolio. Giliberti, who was the only female in a senior management role at the time aside from Silverstein’s daughter, was terminated by Silverstein in 2008. In her suit, Giliberti alleged that she was repeatedly marginalized at the company because she was female, and claimed that she was replaced by 35-year-old Jeremy Moss of Forest City Ratner Companies. Judge Manuel Mendez did dismiss one key cause of action, which would have allowed Giliberti to claim damages on the $1.6 million in ownership interests she forfeited when she was fired from the firm. “We don’t comment on pending litigation, but Silverstein Properties prides itself on its tremendous employee morale, and has been recognized with awards for being a great place to work,” Dara McQuillan, a spokesperson for Silverstein, said in a statement released to The Real Deal. “Unfortunately, like any company, we sometimes have employees that leave on less-than-perfect terms.” Silverstein is now expected to file an answer to the complaint. Giliberti’s attorney, Rosalind Fink of the law firm Brill & Meisel, was not immediately available for comment. TRD PHOTOGRAPH FOR THE REAL DEAL BY MAX DWORKIN


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Residential market

from page 16

market activity is positively influenced by the combination of strengthening housing numbers, seasonality, historically low interest rates and a sense of hope that local housing has not only recovered, but may start appreciating again.” Still, others would say the good news, while welcome, is misleading — or at least temporary. Jed Garfield, the owner of Leslie J. Garfield & Co., dismissed the claim that properties are flying off the shelves as “typical broker bullshit,” although he acknowledged that properties under $5 million may be moving faster than the high-priced townhouses that dominate his firm’s listings. Indeed, studios and one-bedrooms led

transactions in Manhattan in the first quarter of 2012, making up the greatest market share since 2009, while sales of properties over $10 million held steady, according to the most recent figures from appraisal firm Miller Samuel. That was a departure from the recent past when luxury properties were dominating sales. Perhaps more significantly, low interest rates — a factor that brokers routinely emphasize as a reason to buy now — may just be forestalling a drop in sales, as Brian Dusseau, director of rentals at Barak Realty, and others have pointed out. While Ben Bernanke, chair of the Federal Reserve, has committed to keeping interest rates low for the fore-

seeable future, the housing market could be adversely affected when the rates inevitably go up, Dusseau said. “Even though bank financing has gotten tighter, the Federal Reserve and the banks are still putting out [an] ‘easy money’ policy that got us into this housing mess in the first place,” Dusseau said, pointing to the low rates and Federal Housing Administration loans that allow for down payments of less than 5 percent. “I do not believe the long-term fundamentals have been fixed,” he added. “I hope I am wrong, but I feel a bit like we are in the eye of the storm, and it is only a matter of time before the second half of the storm hits us.” TRD

Rich and Halstead Property’s Ivana Tagliamonte — joined the firm and left within a few months. Adding to the uproar, Osher abruptly replaced Mark Ripka, his well-liked managing director of sales, with Reba Miller, head of the eponymous brokerage. “Most of the agents were asked to leave,” Osher said, although he was reluctant to revisit the controversy. But many of the defectors challenged Osher’s contention that they were fired, saying they left of their own accord. (Ripka has since joined MNS.) TRD’s tally reveals that Core is almost exactly the same size now as it was a year ago, with 52 agents compared to 51. More recently, broker Jarrod Randolph, named one of Forbes Magazine’s “30 under 30” in real estate, joined Core from Brown Harris Stevens. “If you compare us to any [residential brokerage] in the city, our income and productivity per agent is the highest by a multiple,” Osher claimed.

Core’s position at the top of TRD’s ranking is not the only shake-up among Manhattan’s boutique firms. Three brokerages cracked the list for the first time this year, while others have dropped off since 2011 —partly a function of the way a few listings can affect a boutique firm’s rank. For example, Barak Realty’s dollar volume of listings fell to $7.9 million this year, compared to $16.1 million a year ago. “We don’t really have a lot of listings that sit on the market for a long time,” founder Barak Dunayer said. Three firms have maintained their positions from last year: Fox Residential Group, at No. 4 with $84.5 million in listings; the Modlin Group, at No. 6 with $48 million in listings; and Key-Ventures, Inc., at No. 7 with $45.7 million in listings. “Our focus is the same: to build high-quality, personal relationships,” said Adam Modlin, who founded the Modlin Group with his brother, Avery Modlin, in 1999. “We don’t have a business where we service strangers or walk-ins.” But there was still room for rookies on the list. Blu Realty, a 100 percent-commission firm founded in

early 2011, debuted at No. 5 with $57.5 million in listings. Founded by five alumni of Nest Seekers International — Alon Chadad, Moshe Balalo, Andy Kim, David Tobon and Michael Arcos — Blu now has 59 agents and 34 listings, according to TRD’s research. Blu recently tapped Halstead’s Vince Rocco to head up the firm’s second outpost, an office in Trump Place at 120 Riverside Boulevard launched to capitalize on new developments on the Upper West Side. The strategy appears to be paying off, as 19 of Blu’s 34 current listings are resales in Trump Place and Extell Development Company’s the Avery, also on Riverside Boulevard. The firm is also set to bring three newly renovated Upper West Side townhouses to market, each priced between $12 and $14 million, Chadad said. Also new to the list is MNS, the firm created out of a 2009 merger between the Real Estate Group New York and the Developers Group. While the bulk of its Manhattan listings are concentrated in two Harlem developments — the Lenox at 380 Lenox Avenue and 2280 FDB at 2280 Frederick Douglass Boulevard — MNS has tried to broaden its focus in the last year, working with buyers and individual sellers in addition to developers, according to CEO Andrew Barrocas. “We market a building, we [sell] it out and agents have gone back a couple years later and gotten resales in the buildings,” Barrocas said. MNS has also gained a wider reputation by overseeing sales at the Edge, Douglaston Development’s once-stalled Williamsburg megaproject (although Brooklyn listings are not included in this ranking). With that development nearly sold out, MNS has several buildings in the pipeline, ranging from 20 to 100 units and located in the Lower East Side, Union Square and Murray Hill, Barrocas said. Another newcomer is the seven-year-old Platinum Properties, which lands on the ranking by virtue of its $16.5 million penthouse listing at 200 Chambers Street in Tribeca. The apartment first hit the market at nearly $17.8 million last July. Platinum has offered a $100,000 bonus to the broker who brings in a successful buyer. TRD

too, should remain an office building, though Cushman suggested that it be converted to condos, perhaps with a hotel. Yet he acknowledged it might be difficult to get financing for an office rehab because lenders these days want to make their money back quickly. The fastest way to do that would be to rehabilitate the building and sell it as condos, he said. “While it would make a fabulous long-term investment as an office building, most of the money out there [for re-

development] is not long-term,” he said. Long-time leasing agents in the Midtown South market, who have seen the Ring buildings slowly lose tenants over the past decades, realize that almost any new use would make a lot of money, given that there is just over $4 million in debt on the buildings now. “I wish I could make as much money as Frank Ring has lost,” said Sam Stein, director of leasing at Justin Realty, which has a concentrated portfolio in Midtown South. TRD

Boutique brokerages from page 40 her said.

More visibility Since 2010, Core brokers have appeared alongside Warburg Realty and Gumley Haft Kleier brokers on HGTV’s hit show “Selling New York,” which Osher said has given the firm a platform to showcase its brand and its agents. “But with respect to our business, our business model is not affected by the TV show,” he said. Still, the show has increased Core’s visibility “tremendously,” said fellow cast member Michele Kleier, president and chair of Gumley Haft Kleier. Kleier, too, is reaping the rewards of her star turn, along with daughters and fellow “Selling New York” stars Sabrina Kleier-Morgenstern and Samantha Kleier-Forbes. Although the brokerage once again had the third-highest dollar volume of listings, Gumley Haft Kleier increased its listings value by 34.4 percent to $113.2 million. (Kleier said the total was closer to $129 million.) But she said the increased visibility that comes from TV is especially beneficial for a firm like Core, which counts so many more developers among its clientele. In contrast, developers typically bring in Gumley Haft Kleier to market one-off trophy properties in their projects, as Two Trees Management did with the penthouse in the Clocktower Building in Dumbo. “It’s extremely helpful for a [brokerage] that focuses on new construction because developers love to be on the show and certainly want the exposure,” she said, noting that the private sellers who make up the bulk of her firm’s clientele may see the show’s publicity as a liability. Gumley Haft Kleier’s agent count dropped by three to 36, which Kleier said is consistent with her plan to keep her firm at 40 agents or less. “We’re very selective because we work in an atmosphere where everybody works very closely together,” Kleier said. Osher said he has also committed to limiting the size of his firm, while imposing rigorous standards for agents. In the last year, this approach has sometimes given the impression that Core had a revolving door, as an influx of new talent — including Prudential Douglas Elliman’s Lawrence

More shake-ups

Ring from page 43 foot 119 West 24th Street, could earn rates of about $42.50 per square foot and rake in as much as $6.4 million a year in rental income, the report said. “Creative tenants and nonprofits continue to fuel demand for office space in Chelsea,” the Cushman study said, noting that “119 West 24th Street would be ideal for a user seeking a desirable Chelsea headquarters location.” Michael T. Cohen, president of the tri-state region for Colliers International, suggested that 212 Fifth Avenue, 94 June 2012 www.TheRealDeal.com

www.TheRealDeal.com January 2012 00


Bushwick

from page 18

of vacant land available” there, he said. Behin noted that apartments in the area have been getting higher-than-anticipated rents; at newly redeveloped 184 Noll Street, for example, studios now rent for around $1,550, according to the website StreetEasy. Developers are also eying the area near the Central Avenue stop on the M train, sources said, where 960 Willoughby currently has asking rents starting at $1,500 for a studio. “Investors and developers are looking to follow the L and M trains for investment opportunities,” said Matthew Cosentino, a TerraCRG broker who specializes in multifamily and mixed-use properties in Bushwick. And these developers are especially anxious to snap up Bushwick property while taking advantage of today’s low interest rates on construction loans. “At some point, [my clients] are like, ‘I just want to do a deal,’ ” Lester said. “They aren’t sure how long the cheap debt is going to be around.” Many of them are looking at six- or eight-unit projects, where “you can buy a brownstone and condo it,” Lester said. In the southeastern area of Bushwick in particular, “you have a lot of smaller properties available for development, that you can build, or knock down and build on,” Dolgin said.

Zoning problems But when it comes to residential development, Bushwick has zoning challenges that other up-and-coming neighborhoods don’t. The southeastern area of the neighborhood is zoned mostly for residential. But the sought-after northwestern area — where Roberta’s and other trendy retailers are located — is zoned for manufacturing, so residential building is largely banned there. Michael Amirkhanian, a Bushwick specialist at Massey

Knakal Realty Services, said the manufacturing-zoned area on the map is shaped, perhaps fittingly, like “an upsidedown middle finger to the development community.” And while the city passed a high-profile rezoning for the Williamsburg and Greenpoint waterfront in 2005 — paving the way for high-density housing in formerly industrial sites — no such rezoning is on the horizon in Bushwick, the department of City Planning said. The North Brooklyn Industrial Business Zone, which encompasses a portion of Bushwick, was created in 2005 by Mayor Michael Bloomberg as “a sort of policy statement: ‘Hey, these are industrial and are currently used for manufacturing — and should stay that way,’ ” explained Mitchell Korbey, head of the land-use department at law firm Herrick Feinstein. The Bloomberg administration has done a record number of rezonings, but sources said the mayor, along with Brooklyn borough president Marty Markowitz, wants to keep Bushwick’s zoning predominantly industrial to preserve the city’s manufacturing base. Dolgin, for example, said he recently sold a 46,000-square-foot parcel at McKibbon and Bogart streets for $4.37 million, and the site will be used as storage for scaffolds. In some southern portions of Bushwick, a mixed-use building can be redeveloped as residential, but a variance is required to do that in most of the popular East Williamsburg area, and they are rarely granted, Dolgin said. One way to pursue development in Bushwick is through the city’s “loft law,” which allows commercial buildings to be used as residences if they were inhabited by three or more tenants during a certain period in the early 1980s. Local developer Israel Hirsch, president of Bushburg Properties, said he is currently using that tactic for a 24-unit development at 385 Troutman Street, where he hopes to convert commercially zoned space to residential because artists’ studios in the building have been lived in.

Some real estate developers have gotten around zoning restrictions in Bushwick by building hostels, which have proven lucrative, sources said. Commercial zoning allows for hotels, and hostels can qualify if they have no more than two beds in a room. The New York Loft Hostel, a renovated loft building at 249 Varet Street in East Williamsburg, is one example of a successful development, brokers said. “Basically every time I’ve gone there, they say they are raising their rates,” Behin said. Another challenge to doing deals in the Bushwick area, however, comes because sellers there are often unsophisticated, some say. “There is a disconnect between the new users and the owners,” said Matt Blesso, owner of 3rd Ward, a commercial space for artists near the Morgan Avenue subway stop. “If you have an 80-year-old immigrant and some young hipsters trying to explain why he should do some kind of tenant improvement build-out ... it just doesn’t work.” Lester agreed. “A lot of these sellers are old-school, meaning they are literally old,” he said. “The key is listening to a bunch of stories about the old country. “They won’t sell to you unless they like you,” he added. The result is quiet deals, often done without a broker, said Behin. Currently, Massey Knakal has only two available residential development sites in Bushwick — 1501–1503 Jefferson Avenue, which has 13,200 buildable square feet and an asking price of $695,000, and 36A Arion Place, with 5,034 buildable square feet and an asking price of $225,000. But in a neighborhood where Roberta’s pizza now costs up to $17, Dolgin advises developers to seize opportunities wherever they can find them, especially on sites with the right zoning already in place. “Where development is as of right,” he said, “get your plans approved and go!” TRD

Elliman’s Robin Greenbaum lived and worked for years in the Harmony at 61 West 62nd Street, even creating an iPhone application for the building, with layouts and building information. Then in 2008, she sold her apartment and bought a studio at the Sheffield condo at 322 West 57th Street, thinking it would be a good investment in her business. “The apartments were great and I was very confident that it was a great buy,” she said. But the Sheffield, of course, ran into serious financial difficulties, and sales stalled as original developer Kent Swig lost the building to foreclosure. In the face of these problems, Greenbaum moved out and found a tenant to lease her apartment. “It was a big mess,” she said.

Luckily, the relationships she built at the Harmony sustained her — even once she moved out. “The Harmony’s still my bread and butter,” she said. Indeed, brokers say that even after leaving a building, the business often keeps coming. Uberti Bona said he has all three listings at 430 East 77th Street, where he lived years ago, and regularly works at the Atelier, too. Many brokers find they do so well in buildings, they’re hesitant to leave. Deppe said she’d enjoy moving to a different building for a change of scenery, but she won’t leave because of the solid business flow. Uberti Bona said he likes the Edge so much he’s unlikely to leave. Luckily, he doesn’t see any real need to. “If I can get half the business that happens here each year,” he said, “I’ll have way more than I need.” TRD

same building asking $20,000, and quickly received several competing offers on the property. The first bid came in at $17,000 per month, the second at $18,000 and a third at $19,000. Rundhaug asked each party for counter-offers, and the apartment was ultimately rented for $19,500. As the rental market strengthens, landlords are becoming more demanding, brokers said. Elizabeth Kee, a broker at the firm Core, said she’s already gotten five offers for a 2,500-square-foot penthouse in the boutique Blue condo-

minium at 105 Norfolk Street, all of them slightly below the $14,000-per-month asking rent. But the landlord, confident he’ll get the full price, has turned them all down. Would-be renters are often unpleasantly surprised by these circumstances, Faust said, noting that they are displeased to find that they might be denied the apartment even after offering more than the asking rent. “It’s hard to swallow for a lot of people,” said Kee. These wealthy homeseekers, she added, “don’t get a lot of ‘nos’ in their lives.” TRD

Brokering from home from page 32 in her apartment building, the West Village condominium Superior Ink.

Buildings that backfire Of course, living and working at home isn’t always easy, and some brokers avoid it for that reason. The Corcoran Group’s Matt Berkson lived in the Impala on East 76th Street for two years. But he had a lot of clients in the building and ultimately moved because he “didn’t feel comfortable pushing business with neighbors who could be my friends. “I also just don’t want to be ‘on’ all the time, if a curse slips out of my mouth when I stub my toe, you know?” he added. And sometimes the strategy can backfire, especially if brokers choose the wrong building to buy in.

Rental battles from page 44 leasing out their apartments. “For owners on the high end who are renting out their property,” Lewis said, “it’s just not worthwhile taking some extra money if the tenant is going to be demanding.” Tenants must also move quickly in order to snag their desired rental, industry sources said. When Prudential Douglas Elliman broker Kirk Rundhaug listed a two-bedroom spread at 50 Gramercy Park North last year, it took him four months to find a tenant. A few weeks ago, however, he listed a similar unit in the

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Price: $3,995,000 Taxes: $3,000 per month Common Charges: $3,640 per month For further details please contact: Jodi Nath, Argo Real Estate: 646-765-6536, Jodin@argo.com Karen Berman, VP, Director of Sales, Argo Real Estate, 212-896-8614, Karenb@argo.com

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Expos Your Business presents the Long Island Real Estate & Business Renaissance trade show with some 150 exhibitors and over 2,000 attendees expected. Presenters include Loretta Beine, business marketing program analyst at the Long Island regional office of Empire State Development, and Ralph Benzakein, a vice president at Cresa Long Island. Hilton Long Island, 598 Broad Hollow Road, Melville, N.Y. Friday, 9 a.m. to 5 p.m.; Saturday, 9 a.m. to 3 p.m. Fee: $10 in advance, $20 at the door. Information and registration: www.lirebe.eventbrite.com.

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The B’nai B’rith Real Estate Unit hosts a luncheon with Norman Sturner, president of Murray Hill Properties, who will give a talk entitled: “An Owner’s Perspective on the 2012 Office Market.” The Cornell Club, 6 East 44th Street. Noon. Fee: $80. Contact: akuilan@bdo.com or (212) 885-7239.

12

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CapRate Events presents the Healthcare & Real Estate 2012 conference. Speakers include Seth Pinsky, president of the New York City Economic Development Corporation; Chris Bodnar, first vice president at CBRE National Healthcare Capital Markets Group; and ProMed Properties president and CEO Josh Friedman. The Scholastic Building, 557 Broadway. 7 a.m. to 3 p.m. Fee: $250. Information and registration: www.cre-events.com/healthcare.

12

The New York City chapter of CoreNet Global holds the third-annual Women of CoreNet Global NYC Reception, headed by Shelly Bloch, director of global real estate at BlackRock, and Gayle Matthei-Meredith, chief marketing officer at Cassidy Turley. Le Parker Meridien Penthouse, 119 West 56th Street. 6 to 8 p.m. Fee: $50 for members, $75 for nonmembers, $10 for students. Information and registration: www.newyorkcity.corenetglobal.org.

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The Real Estate Board of New York hosts the Residential Brokerage Division’s Owner/Manager Luncheon. Greg David, director of the business and economics reporting program at CUNY Graduate School of Journalism, will moderate a panel discussion on the New York City retail market. Panelists include Faith Hope Consolo of Prudential Douglas Elliman, Hal Fetner of Durst Fetner Residential and Studley’s Woody Heller. New York Athletic Club, 180 Central Park South. 11:45 a.m. to 2 p.m. Fee: $31. Members only. Information and registration: www.rebny.com.

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The Greater New York chapter of the Institute of Real Estate Management and the Building Owners’ and Managers’ Association of Long Island host their annual golf outing, followed by a cocktail reception and dinner. Harbor Links Golf Course, 1 Fairway Drive, Port Washington, N.Y. Fee: $275, $100 for dinner only. Information and registration: www.iremnyc.org.

100 June 2012 www.TheRealDeal.com

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Crain’s New York Business hosts a breakfast forum featuring U.S. Secretary of Housing and Urban Development Shaun Donovan. Donovan will discuss the Obama administration’s efforts to manage the foreclosure crisis, plans to revive the U.S. housing market and the outlook of federal funding for New York City’s housing programs going forward. Sheraton New York Hotel and Towers, 811 Seventh Avenue. 8 to 9:30 a.m. Fee: $90, $900 for a table of 10. Information and registration: www. crainsnewyork.com.

12

The Retail Committee of the Real Estate Board of New York presents its Retail Deal of the Year Awards. Prizes include “Most Creative Deal in Manhattan” and “Retail Deal Which Most Significantly Benefits the Manhattan Retail Market.” 101 Club, 101 Park Avenue. 5:30 to 7:30 p.m. Fee: $60. Information and registration: www.rebny.com.

12

Crain’s New York Business hosts “Real Estate Conference: Seizing the Moment.” Panelists will include Rudin Management Company vice chairman and CEO William Rudin; Janno Lieber, Silverstein Properties’ president of World Trade Center Properties; and Mary Ann Tighe, CEO of CBRE’s New York Tri-State Region. Topics include sustainability in new campus and hotel development, and trends in the affordable housing and high-end condominium markets. Signature Theatre, 480 West 42nd Street. 8 to 11:30 a.m. Fee: $275, $2,750 for a table of 10. Information and registration: www.crainsnewyork.com.

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The New York & New Jersey Minority Supplier Development Council presents its 2012 Business Opportunity Expo. This year’s theme, “Strategic Positioning for Your Future,” examines opportunities for multicultural businesses and major corporations to explore methods of creating and maintaining successful business partnerships. The keynote speaker is Carla Harris, a managing director at Morgan Stanley Investment Management and chairman of the Morgan Stanley Foundation. New York Marriott Marquis, 1535 Broadway. 6:00 a.m. to 5:30 p.m. Fee: $325 for members, $400 for nonmembers. Information and registration: www.nynjcouncilexpo.com.

14

TerraCRG hosts the third-annual Brooklyn Real Estate Summit, with a keynote address by Jeffrey Levine, chairman of Douglaston Development. Other speakers include David Kramer, principal at the Hudson Companies; and Jonathan Butler, founder of Brownstoner.com. St. Francis College, 180 Remsen Street, Brooklyn. 8 a.m. to 4 p.m. Fee: $299. Information and registration: brooklynsummit.com.


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15 17 18 21 22 23

TRD’s documentary, which aired on PBS last month, profiles this architect Head of L.A.-based private equity firm Yucaipa and investor in NYC hotels ___-classical architecture Original lender at E. 51st St. crane collapse site, _____ Realty Funding SVP and managing director at Brown Harris Stevens, ____ Greenfield Bette Midler’s glass-enclosed ___ at 1125 Fifth Avenue is revealed in a new photography book Beastie Boys rapper __-Rock recently sold a Spring Street townhouse to developer Stephanie Boivin Chain with locations on Third and First avenues, ___-a-bagel Chelsea _____s Ad ___ committee Lexington and Madison Initials of the real estate firm headed by Francis Greenburger Commercial brokerage handling retail

leasing at Brooklyn Municipal Building 24 Developer of 208 West 96th Street, ____ Properties Group 27 Standard and ____’s 28 Purchaser 30 Pier 57 developer, Young ___ 31 ____ Stacom of CBRE Group 33 Communications mogul who bought an $11.5M apartment at Trump International Hotel 36 Spelling test 38 A proposal by architect Ju-Hyun Kim would let New Yorkers do this on the LES 39 Landmarks Preservation Commission, for short 40 Born, in society columns 41 A broker often ____ up an apartment before an open house 44 Location 46 _____ Alliance, a partnership between Halstead Property, Houlihan Lawrence, and two other firms 47 Developer of the Barclays Center _____

Down 1 2 3 4 6 7

8 10 12 16 17 19

20 22

Frequent real estate commentator, Bob _____ ____ the land of the free Pricey neighborhood in San Francisco, ____ Hill Hudson ____ Elizabeth Stribling still shops for groceries on the ___ East Side The Yankees’ head physician listed an apartment at the Caledonia with a second ___ Real estate brokers have plenty of it Katz’s and Second Avenue are examples ___ Giles Hotel First word of a Brazilian mega city ____-friendly apartment Global asset management group that recently expanded at 520 Madison Avenue Conn. office tower that recently sold for $99 million _____ Stacom and Michael Rotchford won REBNY’s Henry Hart Rice Award

24 Forest City Ratner is using this type of construction to build a rental tower at Atlantic Yards 25 TV station whose corporate headquarters is on 52nd Street 26 15 CPW, of new-construction condos 27 Fashionable 29 The telecommunications company that owns BlackBerry 32 Brokerage that recently opened its first storefront office 34 Compass point 35 What a commercial landlord contributes to an office build out 37 Parcel of land 40 Common charges + taxes + mortgage = monthly ___ 41 Wall is one 42 Often paired with square foot 43 Paul McCartney, for one 45 That is, abbr. To play this puzzle online, and see the solution, visit www.TheRealDeal.com.


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Director of Leasing Established (1925) Owner/Developer Assets on East Coast Midtown location Salary-Benefits-Bonus potential

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DEVELOPMENT UPDATES LEASING UPDATE

Upper West Side Windermere West End 666 West End Avenue Stellar Management and AORE Holdings Leasing have begun renting 170 newly renovated units in the prewar apartment building. Rents start at $2,200 for studios, $3,000 for one-bedrooms, $6,000 for twobedrooms, $10,000 for three-bedrooms and $13,000 for four-bedrooms. Building amenities include a full-time doorman, concierge, roof deck, fitness center, children’s playroom and pool. Brown Harris Stevens is the agent. Contact: www.windermerewestend.com. SALES UPDATE

Chelsea

Chelsea Green 151 West 21st Street Sales at Alfa Development’s 51-unit condominium have begun, with occupancy slated for fall 2013. The building offers one-, twoand three-bedroom apartments ranging from 695 Chelsea Green to 1,673 square feet, and a 3,110-square-foot four-bedroom penthouse. Prices start at $799,000. Amenities include 24-hour lobby service, fitness center and roof deck. The Corcoran Group is the agent. Contact: www.151w21.com.

Financial District 20 Pine the Collection 20 Pine Street The 409-unit condominium is nearly sold out, with just 20 homes left. The remaining units include studios and two- and three-bedroom residences ranging from 784 to 2,570 square feet, with prices between $845,000 and $3.1 million. Building amenities include a terrace, pool, residents’ lounge, billiards room and concierge service. The developer is Africa Israel USA, and Warburg Marketing Group is the agent. Contact: www.20pine.com.

Flatiron The Story House 36 East 22nd Street With just three units remaining, the eightunit condominium is now 65 percent sold. Units in the building, developed by Manhattan Skyline, include three-bedroom and twobedroom-plus-office homes, ranging in size from 2,155 to 2,217 square feet. Prices start at $3.56 million. Building amenities include concierge service and a virtual doorman. Contact: www.thestoryhousenyc.com.

Hamilton Heights The Nicholas 753 Saint Nicholas Avenue Sales have launched at the 12-unit condo104 June 2012 www.TheRealDeal.com

minium. Available homes include studios and one- and two-bedroom units, plus two penthouses. Homes range in size from approximately 420 square feet to over 1,100 square feet, and are priced starting at $229,000. Developed by Argyle Holdings, the building offers a private garden and Cyberdoorman service. Brown Harris Stevens Development Marketing is the agent. Contact: www.753stnicolas.com.

Long Island City The Industry 21-45 44th Drive The 75-unit condominium is now 51 percent sold. The remaining homes include studios and one-, two- and three-bedroom units ranging in size from 555 to 1,126 square feet. Prices start at $414,750. Building amenities include an attended lobby, parking garage and fitness center. Alan and Stuart Match Suna, owners of Silvercup Studios, are the developers. Modern Spaces is the agent. Contact: www.theindustrylic.com.

Williamsburg 58 Metropolitan The 50-unit condominium is now 95 percent sold, with only two units left. Remaining homes in the building, developed by Steiner NYC, include a two-bedroom unit and a three-bedroom penthouse. Prices start at $989,000. The building shares amenities — including a pool, fitness center and media lounge — with its sold-out sister building, 80 Metropolitan. Halstead Property Development Marketing is the agent. Contact: www.58met.com.

Clinton 534 West 42nd Street 534 West 42nd Street

The nine-unit boutique condominium, developed by Silverstone Property Group, is now 50 percent sold. Remaining units include two 1,148-square-foot one-bedrooms and a 2,206-square-foot, two-bedroom penthouse. Prices range from $799,000 to $1.89 million. Prudential Douglas Elliman is the agent. Contact: www.534w42nd.com.

Williamsburg The Edge 34 North 7th Street and 22 North 6th Street Only 50 homes remain at Douglaston Development’s 565-unit condominium. Available homes include one- to three-bedroom units, as well as duplexes and penthouses, ranging in size from 570 to 2,530 square feet. Prices range from $745,000 to $1.76 million. MNS is the agent. Contact: www. williamsburgedge.com. TRD


RESIDENTIAL DEALS Soho $7.08 million 30 Crosby Street, Apt. 4A 30 Crosby Street

Two-bedroom, three-bath, 4,200 sf unit in a doorman condo, the Loft; apartment has exposed brick, wine cellar; common charges $3,515; taxes $2,021; asking price $7.45 million; three months on the market. (Brokers: Ivan Prochko and Cara Rosenbloom, City Connections Realty) “The seller bought the apartment from Courtney Love six years ago. The buyer is in the movie business; he is a post-production guy, and we are actually selling his estate up in Fairfield, Conn., now. I had him take a red-eye in from California [to see the apartment]. Three people were bidding on it, and they were interested because there is very little real loft condo product available in Soho, and it has a doorman. There was a bidding war, and it went into contract within the week. When you get into that price range things can get crazy, but the financing went really smoothly. It was a little difficult to navigate the condo package because my buyer was a victim of identity theft before, so he was hesitant. We worked it out that all the documents would be returned or shredded, so he was pretty happy with that.” Ivan Prochko, City Connections

Williamsburg $1.1 million 144 North 8th Street, PH1B A unit at 144 North 8th Street

One-bedroom, one-bath, 4,100 sf unit in a new development condo; building has 24-hour doorman, roof deck, gym; apartment has eat-in kitchen, hardwood floors, whirlpool bath; common charges $548 per month; asking price $1.1 million; one day on the market. (Brokers: Deborah Rieders and Sarah Shuken, the Corcoran Group; Ann Deane, Bond New York)

“The [buyer] is from Las Vegas, and was looking for a pied-à-terre. We saw about 15 apartments before this one. I took him to this apartment when it had only been on the market for one day. He fell in love with the 13-foot ceilings. We went to the developer for financing because the developer offered good rates and terms to my buyer and it was easier. But construction took longer than anticipated, so everything got delayed. It took forever to get the TCO. We thought we were closing in January, then it got pushed to February, March, April, May. Because my buyer travels a lot and doesn’t have many opportunities to be in New York City, we had a tight closing window and the developer’s financing guy really pulled through and made it happen at the last minute.” Ann Deane, Bond New York

French Interior by Josephine Trotters

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One-bedroom, one-bath, 839 sf unit in a doorman condo built in 1962; building has roof deck; apartment has hardwood floors; maintenance $594 per month, taxes $535 per month; asking price $850,000; 11 weeks on the market. (Brokers: Jennie Ma, Corcoran; Harold Kobner, Argo Residential)

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“This was a very fast deal. I had sold the buyer another apartment. She called me up and said she was looking to buy a condominium because she had some extra money and wanted to put it in an apartment. She wanted to get a large one-bedroom because she thought a studio would be hard to rent out. She walked into this apartment and it has a terrific view, and we started to negotiate immediately. On Tuesday, March 13, we reached an agreement, and on Friday the 16th at 5 o’clock it was signed by the seller, which is very fast. The buyer wanted to go on vacation knowing the apartment was hers and that everything was signed. I went and got the contracts and [physically] took them to the other attorney. It was an all-cash purchase. We closed May 3, and hopefully by June 1 she will have a tenant in there.”

President, New York Region, Jones Lang LaSalle

Yoron Cohen Vice Chairman, Capital Markets New York, Jones Lang LaSalle

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7 World Trade Center 250 Greenwich Street, New York City GUEST SPEAKER

John “Janno” Lieber President, World Trade Center Properties, LLC 2011’S MOST INNOVATIVE REAL ESTATE DEAL OF THE YEAR AWARD

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Harold Kobner, Argo Residential 636 Broadway, Suite 218, New York, NY 10012 tel 212 279-2522 www.afrmc.org

Interviews by Guelda Voien www.TheRealDeal.com June 2012 105 AFRMC_REAd.indd 1

5/30/12 11:48:37 AM


COMINGS & GOINGS

BROKER EXCHANGE

Citi Habitats alums launch new listings site

Residential

ove over, Craigslist: A new online real estate listings platform is coming to town. Manhattan-based Propertyroster.com, founded by brothers Price-Mars Delly and Laurent Delly, is now prepping for its official release, slated for late this month or early July. The site features sale and rental listings for residential and commercial buildings. Most of the properties on the site are currently in New York City, but the Dellys told The Real Deal they’ll also include listings from across the country and abroad. Propertyroster’s primary function is to connect homeseekers with available properties, and to give brokers a place to advertise their listings. But unlike other sites, the Dellys said, Propertyroster allows customers to score various aspects of the home — from “location” to “kitchen layout” — on a scale of 1 to 7. That feedback helps brokers decide whether they need to lower From left: Price-Mars Delly and Laurent Delly prices, or take other steps to unload the property. “The site provides information vital to help move properties faster,” said Laurent. The Dellys, who were both born in Haiti, began their real estate careers with Citi Habitats in 2003. A year later, they formed their own boutique firm, the Delly Group, which specializes in Harlem brownstones. But they felt brokers needed a better way to advertise their listings online. “When you look at how traditional brokerages market real estate, well, things have evolved,” PriceMars said. Propertyroster has a free version and three paid options: basic, which costs $9.95 for 45 days; advanced, priced at $14.95 for 75 days; and premier, at 120 days for $22.95. The site also features real estate events and job listings, and allows users to text listings directly to their phones. “It’s a one-stop shop,” Price-Mars said. By Guelda Voien

Madi Lager and Sharon Rosenberg joined the firm from Prudential

M

Urban Sanctuary switches to 100 percent commission model; Roth, Krispin part ways

I

n a bid to expand and attract new talent, the residential sales and rental brokerage Urban Sanctuary is switching to a 100 percent commission model, according to firm president Isaac Krispin.As of June 5, Krispin said, agents will no longer pay a percentage of each commission to the firm. Instead, they will pay a flat monthly fee of $99, as well as a transaction fee on each deal. The company, which currently has around 30 agents, aims to grow to several hundred in the next three years, he said. Krispin, who founded Urban Sanctuary in 2004, said he hopes the move will differentiate his firm from other brokerages. “Agents are hopping from one company to another in search of a larger split,” he said. “If you have a 100 percent split ... no one can compete with that.” The new compensation model will apply to all of Urban’s current agents and any new recruits. In addition to the monthly fee, agents will pay $375 for every rental deal, $1,000 for every sale under $1 million, and 10 percent of the total commission on sales over $1 million. The high-commission-split model has grown increasingly popular in Manhattan since Rutenberg Realty was founded in 2006. Krispin said his model is different from competitors because he will continue to offer amenities — including a listings database, training and administrative support — more typical of traditional brokerages than high-commission-split firms. The change, however, has cost Krispin his partnership with former Prudential Douglas Elliman agent Mickey Roth, whose Galleria Group merged with Urban last year. Roth was not in favor of the new model and the pair split ways two months ago, Krispin said. “[Roth] didn’t want to go in this direction,” Krispin said. Roth did not respond to a request for comment. Despite the split, Krispin said he’s confident the switch is the right decision. “It’s a smart move if you’re doing Isaac Krispin it the right way,” he said. By Katherine Clarke

ClickPay takes a page from Groupon’s book

C

lickPay, a Manhattan-based provider of software for property owners and managers, is rolling out new technology intended to lessen the sting of paying rent. Called ClickPayPerks, the new program offers Groupon-esque deals to tenants who pay their rent on time, from discounted Yankees tickets to free drinks at Dunkin’ Donuts. The program, which is free for anyone enrolled in ClickPay, will launch this month, according to ClickPay founders Steven Van Praagh and Steven Kamhi. Three-year-old ClickPay is used by Stellar Management, SW Management and other large New York City landlords, the company said. The software allows tenants to pay their monthly rent online, and also lets owners create reports and communicate with tenants. Tenants pay a surcharge of $5 per month. The company created ClickPayPerks because “we were finding that property owners were looking for a way to reward their renters for loyalty and paying on time,” said ClickPay CEO Van Praagh. By Guelda Voien 106 June 2012 www.TheRealDeal.com

Bond New York Douglas Elliman as licensed real estate agents. Richard Zangrillo and Rolf Schewe were hired from Citi Habitats as licensed real estate agents. Georges Bleuzen and Marcel Gonzalez joined as licensed real estate agents from A.C. Lawrence & Company. The Marketing Directors Natalie Johnson was promoted to project coordinator. She previ-

ously served as a marketing administrator at the firm. MNS Shana Bowes joined the firm as a project manager and listings special-

ist. Prior to joining MNS, Bowes worked at aptsandlofts.com as director of marketing and a real estate salesperson. Makeba Lloyd, who was hired as a broker, also joined the firm from aptsandlofts.com. Prudential Douglas Elliman Debra Schuster Tanger joined the firm.

Warburg Realty Shawn Modell, Carolyn Chappelle, Tamara LaVille and Cybele Kadagian

joined the company as agents, and Stacy Sussman was hired as a broker.

Commercial Allen & Overy Robert Grados has joined the firm as a partner. He was previously

a real estate partner at Paul Hastings. Cushman & Wakefield Joseph Harkins joined the firm as an executive director. He was pre-

viously an executive managing director at Grubb & Ellis. Denihan Hospitality Group Thomas Mathes joined the firm as vice president of operations, New

York. He most recently served as general manager for the Eventi hotel in Manhattan. Eastern Consolidated Patricia Garcia joined the firm as an associate director. Previously,

she was with Ripco Real Estate. LeClairRyan Barry Cozier, Scott Drago, Cynthia Mitchell and Adrian Zuckerman

joined the firm as shareholders. Linda Bielik, Ralph Berman and Andrea Lawrence joined as partners, while Lauren Margiano was hired as

an associate. All were previously with Epstein Becker & Green. Newmark Grubb Knight Frank Mark Brown joined the Real Estate Capital Markets Group as se-

nior managing director. Jeremy Stoler, N. Dante LaRocca and John Tesoriero joined the group as managing directors. All were previ-

ously with 801 Capital. Wonder Works Construction & Development David Amirian and Eric Brody were appointed codirectors of con-

struction. They will also continue to work at the Brody//Amirian Group, which they cofounded. Compiled by Guelda Voien


Up all night A look at the nightlife hot spots where New York City industry players — and their clients — can be found after hours

n any given evening, real estate players can be found at Manhattan hot spots like 1Oak, Provocateur Café and the Double Seven — or jetting off to Miami clubs LIV and WALL, or Marquee in Las Vegas. While this “models and bottles” lifestyle has its perks, it isn’t all fun and games: In the New York City property world,

Prudential Douglas Elliman vice president Oren Alexander, 24, frequents boutique venues like 1Oak, Provocateur and Simyone Lounge. He also likes the hip Meatpacking District eatery Catch, which has a rooftop lounge for latenight revelry. “I go out to meet potential clients,” said Alexander, who

Oren Alexander at Day & Night’s weekly brunch party, with party planner Carli Roth

“There are only two or three really high-end clubs that cater to the super-wealthy ... and that’s where I want to be.”

1Oak

OREN ALEXANDER knowing where to party can be the key to meeting new clients and securing deals. An evening with table service at Meatpacking District hangouts like 1Oak or Provocateur — where entry is by guest list only— sets a patron back $3,000 or $4,000, said Bernard Schwartz, managing director of lodging assets at Steven Kamali Hospitality, which operates the trendy Capri Hotel in Southampton. But when it comes to doing deals, real estate professionals consider it money well spent. Spots like these may be pricey, but they’re “exclusive, comfortable environments where you can meet clients and rub elbows with the rich and famous,” Schwartz explained. Nest Seekers managing director Ryan Serhant, 27, said he views partying with clients (and potential clients) as part of his job description, especially for foreign buyers who are in Manhattan for only a short time. Serhant, who was depicted as a fun-loving lothario on the Bravo series “Million Dollar Listing New York,” said a typical night out for him starts with dinner in the Meatpacking District, followed by drinks and clubbing at venues such as the Double Seven, a cocktail lounge on Gansevoort Street. He also likes the Red Egg, a Chinese restaurant and latenight lounge on Centre Street, and La Baron, a Chinatown offshoot of the ultrahot Paris nightclub. 108 June 2012 www.TheRealDeal.com

Provocateur Café

WE HEARD

O

“There are only two or three really highend clubs that cater to the superwealthy,” the broker said, “and that’s where I want to be.” He added that introducing clients to new clubs and restaurants — and making sure they have a good time — is a service he offers as a highend broker. “That’s why people want to be around me,” he said. “If they need a reservation at Catch, I can do that for them.” Mitchell Moinian, an associate at Cushman & Wakefield and son of developer Joseph Moinian, said when he takes clients out clubbing, he inevitably runs into other industry pros. “New York City is a finance, insurance and real estate– centric society,” he said. “Because of that, many of our social platforms consist of active business [and] real estate people. I have definitely experienced nights at restaurants or lounges that have the real estate ubiquity of a REBNY event.” Asked if he was making deals, entertaining clients or simply having fun on the nightlife scene, he responded: “In the New York real estate world, there’s always a strong intersectionality of all three of those components.” Also frequently spotted at hip clubs: 20-year-old Daniel Chetrit and his brother Jonathan, sons of developer Joseph Chetrit. Jonathan is a fixture on the nightclub scene, sources said, and Daniel is a DJ with regular gigs at 1Oak and the Boom Boom Room at the Standard Hotel. Real estate’s highest-profile young couple — Kushner Companies’ principal Jared Kushner and wife Ivanka Trump of the famous Trump Organization — are frequently seen schmoozing at high-profile nighttime events. But Kushner and Trump — who have a year-old daughter — tend to frequent charity benefits or industry events rather than bars. For example, the couple attended the Metropolitan Museum of Art’s Costume Institute Gala last month. And for Kushner’s 31st birthday, Page Six reported that the two celebrated with an intimate dinner at West Village eatery Recette rather than a blowout party. “I honestly don’t go out to bars at all,” Trump told the Post in 2010.

Jet-setting

is currently listing restaurateur Jeffrey Chodorow’s Trump Tower apartment for $18.8 million. “I recently closed a deal with a client I met at Day & Night Brunch,” he said, referring to the exclusive weekly Saturday afternoon party at Ajna Bar in the West Village. Attracting well-to-do clients means going to the right places, he added.

Of course, these real estate players don’t limit their socializing to New York City. Winston Fisher, a partner at the family-owned real estate firm Fisher Brothers, was famously photographed on a 2010 Saint-Tropez vacation, competing with Malaysian billionaire Zhen Low to break the World Record for the most money spent on champagne in a single sitting, Page Six reported. During the party — also attended by developer Joe Sitt and socialite Paris Hilton — Fisher eventually lost to Low, who reportedly spent a stunning $2.6 million on the bubbly. Fisher, who heads finance, acquisitions and new development for the company, did not respond to a request for comment. Sources said he can regularly be spotted out and about in the Meatpacking District, however.


networking are private homes, rather than nightspots. No one knows that better than the Moinians’ father Joseph, who is known for throwing lavish annual parties at his waterfront compound in Quogue. Every year, the event is attended by a veritable who’s who of powerful New York personalities, such as governor Andrew Cuomo, senator Charles Schumer and developer Andrew Farkas. The event typically has a novelty theme — past themes have included Diamonds and Denim, and Pirates — and Moinian rents nearby land to accommodate the many cars of his guests. Serhant said he hosts dinner parties for clients at his 20 Pine apartment. And on “Million Dollar Listing,” he was

shown throwing a Fashion Week party in a client’s loft at 95 Greene Street to help market the property. At the party, Serhant connected with a broker whose client wanted a private showing of the apartment, and later got another lead from a French buyer who had seen pictures of the party online. There were also plenty of prospective clients at the soiree, Serhant said. “We party with all clients,” he said. “This business is about people — making people happy.” By Katherine Clarke

WE HEARD

Matthew Moinian, Mitchell’s older brother, held his 27th birthday party at the Hyde Bellagio nightclub in Las Vegas in January. At the party, depicted vividly in photos posted on the club’s website, staff wore “I heart MM” T-shirts, while hundreds of people rocked out to tunes by DJ Devin Lucien, who has also spun at parties for the likes of Janet Jackson and Tom Hanks. Matthew, who declined to comment, is a recent graduate of Manhattan’s Cardozo School of Law and is now working with his uncle, Morris Moinian, to transform a vacant lot at 525 Greenwich Street into a $60 million hotel. Sometimes, however, the best locations for real estate

Developers take the cake Edible real

estate-related estate related masterpieces now common

From left: A sheet cake replica of Newport Green, made by Carlo’s Bakery; Richard LeFrak cuts into the cake.

T

he LeFrak Organization last month celebrated the opening of its new 4.25-acre Newport Green park, part of the company’s massive office and residential development on the Jersey City waterfront. A highlight for event attendees — including New Jersey governor Chris Christie and New York Mets legend Mookie Wilson — was a miniature to-scale replica of the park made of vanilla and chocolate fudge cake. The dessert was created for the LeFraks at Carlo’s Bakery, best-known as the setting for the TLC reality show “Cake Boss.” In one corner, the cake was topped with brown sugar to portray the park’s 7,650-square-foot, sand-filled “urban beach.” Mauro Castano, head decorator at Carlo’s, said his team used fondant and modeling chocolate to create tiny

beach chairs, umbrellas, trees and even the slide and jungle gym inside the playground. He also sculpted a mini version of the park’s new carousel out of Rice Krispie Treats. Castano said it took some half-dozen workers three and a half days to create the massive sheet cake. And while attendees at the event seemed in awe of the elaborate confection, viewers of “Cake Boss” can attest that such real estate–related cakes are becoming more common. Castano said the bakery, which has locations in Hoboken and Jersey City, does three to four real estate–related cakes per month. The most popular ones are the Empire State Building, Philadelphia’s Liberty Bell and Boston’s Zakim Bridge. His favorite, he said, was the cake he made for Tishman Construction last June, showing the five structures that com-

prise the new World Trade Center complex. A spokesperson for the LeFrak Organization said the company commissioned the Newport Green cake to help guests conceptualize the size and layout of the park, while supporting a local business. The price for that visual aid: well over $2,000, according to Castano. The entire cake, meant to feed more than 200 people, was edible — not that anyone would know. At the very end of the event a small crowd, marveling at the artistry of the cake, surrounded company chairman Richard LeFrak, as he sliced into it. But no one dared ask, let alone attempt, to actually cut the masterpiece into individual serving sizes. If they had, they might have been pleasantly surprised. “A lot of people say, ‘It looks too good to eat,’ ” said Castano. “But, trust me, not only does it look good, it tastes really good.” By Adam Fusfeld

NYC real estate pros at ICSC TRD scoped out the Vegas parties at the year’s biggest retail conference to find out who was making deals with who Michael Fascitelli, president and CEO of Vornado Realty Trust, and Sherri White, senior vice president at Vornado, at the Newmark Grubb Knight Frank party at the Cosmopolitan of Las Vegas hotel

From left: Robert Futterman, chairman and CEO of RKF; Bruce Spiegel, senior managing director of commercial and retail leasing at Rose Associates; Amy Rose, co-president at Rose Associates; and Harvey Spevak, president and CEO of Equinox Holdings

Barry Gosin, CEO of Newmark Grubb Knight Frank

From left: Haim Chera, principal at Crown Acquisitions, and business exec Moses Tawil at the Cushman & Wakefield party LEFRAK PHOTOGRAPH BY ADAM FUSFELD; PARTY PHOTOGRAPHS BY ADAM PINCUS

From left: Massey Knakal’s Paul Massey and Robert Knakal at the Massey Knakal party, held at Il Mulino New York at Caesars Brookfield Properties’ Liz McLay and CEO Palace Mitch Rudin at an ICSC panel

Joanne Podell, executive VP of retail at Cushman & Wakefield, at her firm’s Four Seasons party

www.TheRealDeal.com June 2012 109


THE CLOSING

BARBARA

FOX

Barbara Fox founded Fox Residential Group in 1989. The boutique brokerage, which now has around 50 agents, handles high-end real estate in Manhattan and Brooklyn. Fox — who in the past has sold homes to celebrities like late legendary newsman Walter Cronkite and actor Robert Redford — recently represented the buyer in the sale of Yankees slugger Alex Rodriguez’s Upper West Side apartment. Before starting her own firm, she created a 60broker residential division of the now-defunct Cross & Brown Residential Company. She is also on the Real Estate Board of New York’s Residential Board of Directors. What is your full name? Barbara Susan Fox. What’s your date of birth? Jan. 17. Nobody needs to know [the year]. My motherin-law, [who’s] 104, says that “age is a number, and hers is unlisted.” Where did you grow up? Rocky Mount, N.C. — it’s a small Southern town of 6,000 people. The town consisted of a lot of tobacco farmers. My family was in the furniture business. It was a fantastic place to grow up. [But] I did terribly in school, and I never knew why. The reason, I later found out, was I had attention deficit [disorder], which I still have but have learned to live with it. Do you take medication for it? No. I figure I’ve lived this long without medication, so I don’t need it. Where do you live now? 180 East 79th Street. Do you have any other homes? We have a weekend house in Easton, Conn. I fenced in six acres, so it’s a dog heaven. Why did you go into real estate? I really wanted to do something where no one could control how much money I could make. [And] I had real estate in my blood. When my father sold his business he became a real estate investor. He bought properties in our town and rented them out. How long have you been married to your husband [James Freund]? Twenty-seven years. He’s a retired partner at Skadden, Arps. Were you ever married before? Yes. [It was] a practice marriage. I got married between junior and senior year of college. He was at M.I.T. graduate school [so] I transferred from Centenary College in New Jersey and I finished college at Boston University.

110 June 2012 www.TheRealDeal.com

We met when I was a senior in high school. He was a nice man, we were just too young.

there bragging about what I do or don’t do. I’m not a blowhard.

How did you end up in New York? When I separated from my [first] husband, my sister lived here. I had always wanted to live in New York. My mom had lived here when she was younger. We used to come here all the time on vacation. We came to see the Beatles the first time they were in New York.

Have you been approached about being on “Selling New York” or “Million Dollar Listing New York”? Michele Kleier [president and chairman of Gumley Haft Kleier and a close friend] got me on “Selling New York.” I did a segment with her. ... I wouldn’t do “Million Dollar Listing.” Did you see it? It’s embarrassing. I mean, the whole thing with [Ryan Serhant] shaving the arms. I even think “Selling New York” is embarrassing.

Where was your first New York City apartment? 500 East 85th Street. My rent was $300 a month. Do you have kids? No kids. I have four dogs and two cats. They’re my kids. I have two step-children in their 40s. At the point where I was deciding whether I should have a child, my mother — God bless her, this is a terrible thing — said, “If I had to do it over, I probably wouldn’t have kids.” I said, “Thanks a lot.” She was a career woman, too, and it was very hard to juggle things. Your first real estate job was working for Alice Mason. What was that like? I only worked there for a few months. But Alice was a wonderful teacher. Did you ever attend her famous dinner parties? She never invited the competition, and by the time she started having those I was at another firm, WhitbreadNolan [which was bought by Douglas Elliman]. What was your first celebrity client sale? Ralph Lauren. I called his office and his secretary said he was busy. I said I read in an article that his wife [Ricky] was expecting their third child and I had a couple of apartments for him to look at. He got on the phone. A couple of years later, I sold them an apartment on the Upper East Side. From Ralph and Ricky I got a bunch of referrals. I think Ricky referred Robert Redford. How much business has your firm done since it launched? I don’t think that’s anyone’s business. I’m not out

What are your hobbies? I love to ski. I love tennis. I do stone sculpting. What attracted you to stone sculpting? Frustration, because you beat the crap out of the rock. It gets out so much of your inner angst. It’s very, very cathartic. You’re the founder of WOOF NYC Dog Rescue. Why are you so passionate about animal rescue? Humans can speak for their needs. Dogs can’t. Cats can’t. I really feel what’s happening in the shelter system in New York right now is so sad and so pathetic, [like] how many dogs are put down who are totally adoptable. Since January, I’ve taken 10 dogs and cats out and placed them with families or with fosters. What kinds of dogs do you personally own? They’re all mixes, except for one who’s a bichon [frise]. I did a DNA test on all of them to see what they were a mix of. Your vet bill must be insane. I probably spend $200 a month on insurance for the dogs. And I spend almost $400 to bathe them every other week. What’s your greatest fear? If something happened to my husband and me, I really worry I wouldn’t be able to keep my animals together. I made a provision for that in my will, that they have to stay together. By Lauren Elkies

PHOTOGRAPH FOR THE REAL DEAL BY MARC SCRIVO


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