The Real Deal April 2015

22

Road shows get bigger in China

56

Can Durst beat the rap?

www.TheRealDeal.com

58

Hamptons gear up for summer season

82

Hudson Yards’ biggest holdouts

N EW YO R K R E AL E STAT E N E W S

144

Movies get star role in lawsuits

Vol. 13 No. 4 April 2015 $3.00

The 35-and 35-and-under d-u under crowd that’s breaking break king records, launching firms firm ms and generally shaking up the industry p42

When will the boom go bust?

Corcoran vs.

Corcoran Sunshine

Why economists say this real estate upswing is on more solid footing than the last two cycles in New York p50

Penciling out NYC’s priciest penthouses

The firm’s new development success has alienated some top-producing resale agents, but changes are afoot p35

Crunching the numbers on developers’ profits at the city’s most expensive condos p54 ILLUSTRATION BY NOAH MCDONOUGH

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Designer: James Carpenter Design Associates Photograph: Tex Jernigan

Contents A P R I L 2 0 1 5

20 22

Capturing buyers first

A rendering of NYC’s first micro building, which will go up soon in Kips Bay.

As competition intensifies, condo developers open sales offices earlier.

Chinese ‘road shows’ ramp up NYC real estate players host elaborate events in China to attract investors.

on micros 26 AHowmicroscope many micro units fit in a mega

26

penthouse? A close-up on tiny apts.

28 At the Desk of: Lou Switzer The interior designer on his ‘worthless’ Joe DiMaggio autograph, his suspenders habit and reimagining spaces for the likes of Citigroup and EMI. Lou Switzer’s 51-person firm is the largest minority-owned firm of its kind.

Class A sales catch fire 30 Manhattan A dozen top towers, worth $9B, have gone into contract so far this year.

Sub Culture

Corcoran CEO Pam Liebman

35 Corcoran vs.

Corcoran Sunshine The firm’s new development success has alienated some of its top-producing resale agents, but changes are afoot.

40

Every day 300,000 subway riders stream through Manhattan’s Fulton Center, their underground trek

Sunnyside Yards: It’s not round 1

now brightened by entertainment venues and daylight

Mayor de Blasio’s massive affordable housing proposal is far from the first for the western Queens’ site.

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42

Read more about it in Metals in Construction VUSPUL

Real estate’s rising stars The 35-and-under crowd that’s breaking records, launching new companies and generally shaking up the NYC industry.

42

> > > 6 4 0 5 @ 6 9 .

50 When will the boom break?

Economists say this upswing is more solid than the last two, but that could change in a flash.

10 April 2015 8 October 2012www.TheRealDeal.com www.TheRealDeal.com

www.TheRealDeal.com March 2012 00

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

Contents continued out NYC’s 54 Penciling $100+ million penthouses Developers are charging stratospheric amounts for today’s top units, but they’re also spending billions. TRD crunches the numbers on the profit margins.

66

82

58

Hello, Hamptons

66

NYC’s dirty math

The East End’s priciest deals; plus the latest hotels and new retail spots debuting this season.

Industry experts worry that land prices will soon hit a ‘point of no returns.’

Hudson Yards holdouts Widespread development on the Far West Side is prompting big offers, but not every property owner is willing to sell.

in the life of: Jerry Larkin 84 Day The Brookfield bigwig on the firm’s

20 Residential Market Report

leasing tear, the ‘Titanic’ song and his posse of die-hard Rangers fans.

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

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

Read more about it in Metals in Construction online.

94

30 Commerical Market Report

Midtown’s mini-revolution A CetraRuddy condo tower will bring architectural distinction to the former Roseland Ballroom site, says critic James Gardner.

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

86 Neighborhood Dive Up close in a community getting real estate buzz.

A rendering of 242 West 53rd Street

102 National Market Report

144 Litigation, with a side of showbiz

Reports from around the country on significant developments and trends.

Cue the laugh track: Lawsuits with movie references are all the rage.

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

138 Calendar of Events

W W W . S I N Y. O R G This “Casablanca”scene was cited in a recent real estate lawsuit.

on the meaning of life 146 Lutnick The Cantor Fitzgerald CEO knows a little something about loss and has channeled it into his work.

10 12 April October 2015 2012 www.TheRealDeal.com www.TheRealDeal.com

Check out this month’s activities.

144 We Heard A lighter look at industry buzz.

www.TheRealDeal.com March 2012 00

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

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

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ASSOCIATE WEB EDITOR Mark Maurer WEB PRODUCERS/WEB REPORTERS Tess Hofmann, Katherine Kallergis, Claire Moses, Sean Stewart-Muniz SOCIAL MEDIA EDITOR Kerry Barger PRODUCTION COORDINATOR Victoria Tuturice RESEARCHERS Kyna Doles, Will Parker CONTRIBUTING DESIGNER Juan Zielaskowski

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7 Buildings / 350 Residential Units / 11 Commercial Units

© Copyright 2012 Rosewood Realty Group. All rights reserved.

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PHOTOGRAPHER Marc Scrivo DIRECTOR OF MARKETING OPERATIONS Yoav Barilan NATIONAL SALES DIRECTOR Ross Fox SOUTH FLORIDA ADVERTISING DIRECTOR Chris Cuomo ADVERTISING SALES Eran Evron, Nick Mascaro, Robert Stearns, Nicki Chadi, Sigalit Levi, Marcus Guest, Barry Holland, Frankie Grima, Justin O’Garrow DIRECTOR OF DIGITAL SALES Junaid Zahid DIGITAL SALES MANAGER Eric Reyes WEBMASTERS Nima Negahban, Andrew LoCascio ASSOCIATE WEB DEVELOPER Amir Ghaheri FINANCE DIRECTOR/HUMAN RESOURCES Kenneth Cyrus ACCOUNTING ASSOCIATE Karen Francis OFFICE MANAGER Virginia Durso CIRCULATION Paul Destanko DISTRIBUTION Mitchell Newman, Patricia Hofmann, Forero Express ATTORNEY Barry J. Friedberg, Trachtenberg Rodes & Friedberg LLP ACCOUNTANTS William T. McCallum, CPA, P.C., Christine Wang The Real Deal is a registered trademark of Korangy Publishing Inc. Copyright © 2015. Call 212-2601332 or email news@therealdeal.com. Warning: It is illegal to photocopy or reproduce any part of The Real Deal without express written consent. For reprints and duplication rights, call 212-260-1332.

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OS ANGELES – Happy April Fool’s Day! The trial of Robert Durst just ended in an L.A. County courthouse. The New York real estate scion walked free, yet again.

Durst, a suspect in a string of suspicious deaths over the years and the subject of the HBO’s documentary “The Jinx,” is likely popping a bottle of bubbly as we recap his future (and, yes, fictitious) acquittal in the murder of his close friend, Susan Berman.

Despite being secretly recorded muttering he “killed them all” in the finale of “The Jinx,” prosecutors somehow were not able to convince a jury that they had their man.

L.A. is known for over-the-top celebrity trials, but this one made the O.J. Simpson proceedings look like a tax appeal hearing.

It began with a bombshell: revelations of more accidental off-camera confessions

by Durst into his microphone while in the bathroom. They included a detailed outline of how he murdered Berman, his Texas neighbor Morris Black and his “missing” wife Kathleen Durst, including a monologue spelling out where he put the bodies.

Subsequently dubbed “The Bathroom Tapes,” they were admitted into evidence in the closing days of the trial, after first being featured in a follow-up documentary by director Andrew Jarecki, “The Jinx 2.”

While the prosecution saw an open-and-shut case, Durst’s attorney Dick DeGuerin (who opened by thanking his client for his repeat business) successfully argued that Durst could have been referring to anything when he used the word “them.”

“He could have been talking about any number of pets he had over the years, or how he really ‘killed’ it during all the interviews with Jarecki,” DeGuerin told the jury.

The cowboy-hat wearing DeGuerin achieved celebrity in legal circles for getting Durst off in the 2003 killing of Black in Galveston, with Durst claiming he shot Black in self-defense, but admitting he chopped up the body afterwards. But when that case came up during cross examination in the L.A. trial, Durst suddenly changed his story, claiming there was a “second shooter,” outside the apartment, who fired at the same time Durst’s gun went off. The stray bullet, Durst said, is the one that killed Black.

An April Fool’s Day look at how Robert Durst got acquitted of murder (again).

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On the stand, Durst also said Berman leapt in front of a bullet meant as a warning shot that he fired, after getting frightened because she was walking aggressively toward him with a copy of her new book manuscript to proofread.

The trial then took a bizarre turn when Durst escaped from custody. A day later, photos of him at Disneyland appeared on his Instagram feed. Sitting beside him at the park’s famed Tea Cup ride were three large bags that appeared to contain bodies.

Jurisdictional issues between Orange and Los Angeles counties, however, prevented the photos from being submitted as evidence.

Following cross-examination, Durst again forgot to take off his microphone during a bathroom break, and was heard asking himself, “What does a guy have to do to get convicted of murder around here?”

During closing arguments, Durst appeared in the courtroom with a large cooler, containing the gun he said he used to shoot Berman and Black’s head, which police had failed to recover earlier.

One juror explained the “not guilty” verdict just as a Galveston juror had: “What a bad stroke of luck this guy has had, seeing so many people close to him die,” the juror said. “He seems like a nice guy. I felt like he was talking from the heart.”

Since the trial, Durst has received several offers to host his own daytime talk show.

For more on the real-life Durst case and all its fascinating weirdness — I promise they’ll be no more April Fool’s ploys — see page 56.

This issue is also filled with a lot of other fascinating stories.

Don’t miss our cover package on NYC’s next class of rising real estate stars, starting on page 42. We also examine how this real estate boom compares to past booms (page 50); look at developers holding “roadshows” to woo investors in China (page 22); survey holdout owners in the Hudson Yards area (page 82); and reveal how the Hamptons market is shaping up as we inch — very slowly — toward summer (page 58).

Finally, speaking of warmer weather, along with this magazine you’ll find our 106-page South Florida Market Report. It’s chock-full of data and trends about the Sunshine State’s booming development market, courtesy of our South Florida bureau, led by former Miami Herald reporter Ina Cordle. We are also holding a big showcase and forum in Florida on April 23. For more info see TheRealDeal.com/SoFlaForum.

Enjoy the issue.

Stuart Elliott

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As competition selling new developments intensiďŹ es, builders and marketers open sales ofďŹ ces earlier

BY E.B. SOLOMONT n a market where selling condos off of ďŹ&#x201A;oor plans is yesterdayâ&#x20AC;&#x2122;s news, developers and brokers are testing another way to edge out the competition: opening sales ofďŹ ces earlier and earlier.

Stephen Rosenbergâ&#x20AC;&#x2122;s Greystone Property Development, for example, launched sales in January at Waterbridge 47, a 25unit luxury condominium at 47 Bridge Street in Dumbo. That was a full year ahead of expected closings, said Dave Maundrell, president of aptsandlofts.com, which is marketing the building. Prices range from $850,000 to $2.2 million for one-, twoand three-bedroom units measuring 700 square feet to more than 1,200 square feet.

While many larger projects launch sales a year or two before the building is complete, Maundrell said typically, he would wait for a building of this size to be 85 percent complete before kicking off sales. â&#x20AC;&#x153;When the property is further along in construction and close to completion, prices are typically higher,â&#x20AC;? he said. But, â&#x20AC;&#x153;The sooner the developer can close units, the less interest he spends on his acquisition and construction loans.â&#x20AC;?

An increasing number of developers are embracing that strategy, brokers said. â&#x20AC;&#x153;Youâ&#x20AC;&#x2122;re deďŹ nitely seeing things open earlier, as demand is there,â&#x20AC;? said Stephen Kliegerman, president of Halstead Property Development Marketing. â&#x20AC;&#x153;Buyers want to get in early and want a better choice of what product they can buy, and also potentially ďŹ nd a lower price point,â&#x20AC;? he added. â&#x20AC;&#x153;If you have a good sales ofďŹ ce with good visuals and materials, youâ&#x20AC;&#x2122;re able to convey the quality of product and conduct presales.â&#x20AC;?

In a less heated market, a sales gallery would normally open 12-to-18 months before a building is complete, but nowadays, builders are accelerating that timeline by about six months, said Andy Gerringer, managing director of the Marketing Directors. At 220 Central Park South, for example, â&#x20AC;&#x153;it will be two-and-a-half years before delivery,â&#x20AC;? he said. â&#x20AC;&#x153;The bigger the building, the longer you may be out, because you have a long way to go for the sales period.â&#x20AC;?

Weeks before the Attorney General signed off on Vornado Realty Trustâ&#x20AC;&#x2122;s 220 Central Park South, the REIT said it was quietly marketing the ultra-luxury condos. â&#x20AC;&#x153;We have begun to expose the property very gingerly to presales, and to friends and family kind of activity, which has been robust,â&#x20AC;? CEO Steven Roth said during a conference call on Feb. 18.

The plan was approved March 4, and the sales ofďŹ ce is set to open in late summer.

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To be sure, selling new development condos off of ďŹ&#x201A;oor plans is ubiquitous.

Walker Tower, developed by Property Markets Group and JDS Development at 212 West 18th Street, was 25 percent sold when it launched in 2012, thanks to quiet sales ahead of the ofďŹ cial sales launch. Last year, L+M Development Partnersâ&#x20AC;&#x2122; Adeline, an 80-unit building at 23 West 116th Street, was 50 percent sold within the ďŹ rst month, and Est4te Fourâ&#x20AC;&#x2122;s 160 Imlay Street, a 70unit building in Red Hook, was 70 percent sold after the ďŹ rst month.

Itâ&#x20AC;&#x2122;s a strategy that is clearly working: A whopping 45 percent of contracts between September and February were signed off of ďŹ&#x201A;oor plans, according to Olshan Realty, which tracks contracts $4 million and up. â&#x20AC;&#x153;People have stepped up the timing, getting [sales ofďŹ ces] ready earlier to catch the market the best they can,â&#x20AC;? said Gerringer.

The Manhattan condo market, which saw 2,445 new units hit the market in 2014, is set to see around 6,000 units hit the market this year, according to Corcoran Sunshine data. That inďŹ&#x201A;ux has some in the industry expecting more competition and a return to the lavish marketing of the last boom.

In a sign of how important a sales ofďŹ ce can be, last year Sherwood Equities built a $1.7 million stand-alone sales ofďŹ ce in West Chelsea near its luxury condominium project at 500 West 21st Street, dubbed 500w21. The condominium has 32 luxury units, with prices starting at $2.2 million, or $2,500 per square foot.

But launching sales early doesnâ&#x20AC;&#x2122;t always pan out. In September, the Naftali Group began listing units at 210 West 77th Street, a 25-unit condominium, but suspended sales in November, sources said, in order to wait for the spring market.

Miller Samuel data shows a rising monthly absorption rate in Manhattan â&#x20AC;&#x201D; deďŹ ned as how many months it would take to sell all inventory. For the 2015 ďŹ rst quarter, the absorption rate for new development units was 12.6 months, up 40 percent from nine months a year earlier.

The entire market had an absorption rate of 5.9 months during the ďŹ rst quarter, up from 4.5 months the year before. That was still faster than the 10-year average of 8.3 months.

In addition to physical sales ofďŹ ces, developers and brokers are relying heavily on a list of interested buyers generated in the months before the sales launch. Then, once the condo offering plan is approved by the Attorney Generalâ&#x20AC;&#x2122;s ofďŹ ce, buyers can be â&#x20AC;&#x153;teed up and ready to go,â&#x20AC;? Gerringer said. â&#x20AC;&#x153;Theyâ&#x20AC;&#x2122;re the people you start calling and making appointments with when you get the building actually ready to be sold.â&#x20AC;? TRD

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New York players host ‘road shows’ in China

212-392-9262

Developers and investors wine and dine in pursuit of funding for local projects

nygreen.nyc

BY C. J. HUGHES laborate 12-course meals. Pop concerts. High-end hotels with sweeping views.

These are just some of the extravagances that New York real estate players use to lure in potential investors in China, as they look for backing for New York real estate projects.

These fundraising missions (so-called “road shows”) often include a string of events — from private lunches and business meetings to high-tech project presentations to banquet-style parties that take place in first-class hotels with lavish catering.

According to the brokers, bankers and real estate executives who attend them, they are essential when it comes to convincing

E Asbestos removal Lead paint testing & abatement Mold remediation

sources, with $8 million raised in a single summer weekend on a trip dedicated to the pyramid project.

Meanwhile, Forest City Ratner sold a 70 percent stake in its massive mixed-used Atlantic Yards project, since renamed Pacific Park, to the Shanghai-based developer Greenland Holdings Group in late 2013 for $200 million.

Silverstein Properties has an office in Shanghai.

And with Chinese investment becoming increasingly important in New York, networking face-to-face is becoming much more crucial, driving more road shows.

“In New York, everybody knows everybody, and quite frankly, you don’t need to cultivate relationships,” said

THE REAL DEAL is hosting the first-ever U.S. properties showcase in China on Sept. 10-12 in Shanghai.

Check TheRealDeal.com /Shanghai for more information.

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Chinese investors to lend money or buy stakes in projects. And that’s true whether the funds sought are for an individual apartment, a major investment in a project or for EB-5 financing (the popular federal program which grants visas to foreigners who invest $500,000 in the U.S. economy, as long as that investment creates at least 10 jobs).

To be sure, these trips have been going on for some time. But they have increased recently amid the surge in Chinese interest in U.S. property.

The Durst Organization, for example, went on road shows in China in 2012 and 2013 to pitch a pair of projects: The 709unit rental building at 625 West 57th Street known as the “pyramid,” and 855 Avenue of the Americas, a 375-unit rental atop offices and stores.

During the whirlwind trips, some of the firm’s events kicked off with local musicians performing short pop concerts. At the end, clipboard-wielding representatives from the firm signed up interested investors, according to a source who attended the event who joked that “it almost felt like a selling a timeshare.”

All told, Durst raised $280 million in EB-5 funds, according to company

Kevin Swill, the chief operating officer of the Carlton Group, an investment firm that’s worked with developers like Howard Lorber, Donald Trump and Michael Shvo.

“You have to go abroad. And when you’re there, hospitality is very important.”

Epic eating Swill said on a recent trip to China he met with an institution investor who made a $140 million investment in a $500 million ground-up Manhattan condo project.

He said similar deals are in the works that were locked in during that same threeweek trip to China, Singapore and South Korea, which The Real Deal cited in a series of stories last month. Along the way, he and two associates attended parties with private equity players, including one at the Four Seasons Hotel in Hong Kong with views of Victoria Harbor.

During the Carlton Group’s half-hour presentation, an open-bar even attended by about 30 people, steamed lobster on toast and crispy pork bellies with a black olive sauce were served. Swill said another of his pitches was for a $900 million development project in the New York area.

The project’s developer is looking for about Continued on page 130

www.TheRealDeal.com March 2010

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WE ARE PLEDGED TO THE LETTER AND SPIRIT OF THE U.S. POLICY FOR ACHIEVEMENT OF EQUAL HOUSING OPPORTUNITY THROUGHOUT THE NATION. WE ENCOURAGE AND SUPPORT AN AFFIRMATIVE ADVERTISING AND MARKETING PROGRAM WHICH THERE ARE NO BARRIERS TO OBTAINING HOUSING BECAUSE OF RACE, COLOR, RELIGION, SEX, HANDICAP, FAMILIAL STATUS OR NATIONAL ORIGIN. THE SKETCHES, RENDERINGS, PICTURES AND ILLUSTRATIONS ARE PROPOSED ONLY AND THE DEVELOPER RESERVES THE RIGHT TO MODIFY, REVISE OR WITHDRAW ANY OR ALL OF THE SAME AT ITS SOLE DISCRETION WITHOUT NOTICE. THE RENDERINGS ILLUSTRATE AND DEPICT A LIFESTYLE, HOWEVER, AMENTIES, FEATURES AND SPEFICIATIONS ARE SUBJECT TO CHANGE WITHOUT NOTICE. ALL INFORMATION IS DEEMED RELIABLE BUT IS NOT GUARANTEED AND SHOULD BE INDEPENDENTLY VERIFIED. ALL REAL ESTATE ADVERTISED HEREIN IS SUBJECT TO THE US FEDERAL FAIR HOUSING ACT OF 1968 WHICH MAKES IT ILLEGAL TO MAKE OR PUBLISH ANY ADVERTISEMENT THAT INDICATES ANY PREFERENCE, LIMITATION, OR DISCRIMINATION BASED ON RACE, COLOR, RELIGION, SEX, HANDICAP, FAMILIAL STATUS, OR NATIONAL ORIGIN. PLEASE CHECK WITH YOUR LOCAL GOVERNMENT AGENCY FOR MORE INFORMATION. ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY STATING REPRESENTATIONS OF THE DEVELOPER. FOR CORRECT REPRESENTATIONS, MAKE REFERENCE TO THIS BROCHURE AND TO THE DOCUMENTS REQUIRED BY SECTION 718.503, FLORIDA STATUTES, TO BE FURNISHED BY A DEVELOPER TO A BUYER OR LESSEE. THIS IS NOT AN OFFER FOR CONTRACT OR SALE IN THE STATES OF NY, NJ OR MASS.

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BY Th T he pr he p refa efa ef fab u nitts o nit off the the e My My Mic M iicro ro NY NY The prefab units Micro com om mple plex lex will will ill sso il oon n be e sta tacke ta k d on ke on East East stt complex soon stacked 27th Street, 27 27t Stre Stre trr et, ett as e as depicted depic de picted pi pic te ed d in in this thiss rendering. th render re ren ender en de erring ng.. ng 27th

THE

NUMBERS

one57

Living small Sizing S izing u up pN NYC’s YC’s m micro-units icro-units

55 212 Number of rental apartments the My The average number of square feet Micro NY complex in Kips Bay will contain. The units will range in size from 260 to 350 square feet. There are roughly 4,100 new rental units of all sizes expected to come online in Manhattan in 2015, and about 8,800 in 2016.

3,000 Estimated number of micro-units built in Seattle since 2009. Some of those units are as small as 90 square feet, though there is a push to require at least 220 square feet. Meanwhile, San Francisco has approved construction of 375 micro-units, while Boston has green-lighted 195.

for an apartment in Tokyo, a city notorious for its cramped housing and high density. The average studio in New York is a little under 500 square feet.

$289,000 A typical price for a studio under 300 square feet at the 10-building Tudor City complex on Manhattan’s East Side. Tudor City was the first residential skyscraper complex in the world when it was built in the late 1920s. It was converted to co-ops in the 1980s.

400 NYC’s legal per-square-foot limit for ew Yorkers have long lived in small spaces, but with the city’s first designated “micro-apartment” complex coming soon to East 27th Street, the concept of diminutive dwellings is getting new attention. Construction of the 64 modules that will make up Monadnock Development’s “My Micro NY” complex in Kips Bay is in full swing. Starting in June, those modules will be piled up to create a $16.7 million, 10-story building, which should be completed by late fall. They’re not alone, as WeWork is also planning to add mini-units to 110 Wall Street. While Gothamites could probably teach the rest of the country a few things about making do with Murphy beds and mini-fridges, the micro-living craze is sweeping the nation. Seattle has led the way, but “tiny houses” are popping up in cities like Portland and Boston, too.

Even the land of sprawl, Los Angeles, is revising its zoning to allow small home construction in the backyards of existing homes. The movement in part reflects rising housing costs, but is also being driven by the increasing number of people living alone. Census data shows at least 21 percent of households are single adults. In New York, more than half of all adults were single as of 2013. Below, TRD sizes up the city’s micro-units. micr micr ic crro-a c o apar pa p ar tme tmentt building tment tm bu bui b uiildi u ld ding ng in in Sea Se S eattl e ttl ttle tt tle e..

A micro-apartment Seattle.

By Eileen AJ Connelly

N

NEW EXCLUSIVE LISTING

newly constructed apartments, set in a 1987 law aimed at eliminating SROs and tenements. Yet there are roughly 3,000 apartments smaller than that in Manhattan alone.

72 Approximate number of 300-squarefoot apartments that could fit inside the 21,504-square-foot penthouse planned for the former Sony Building at 550 Madison Avenue. The $150 million condo, which will be the largest in NYC, will include eight bedrooms, eight full bathrooms and 10 powder rooms.

a single person. An estimated 19 percent of those singles are under 35 years old; 20 percent are 35 to 55 and just over 50 percent are 55 or older.

18 inches $92 to $103 Width of the dishwasher units The approximate per-square-foot price for market-rate units at My Micro NY, which will rent for around $2,000 to $3,000 a month. That’s a steep markup when stacked up against the median per-square-foot price for a Manhattan studio in February: About $58.

planned for the My Micro NY apartments. A full-sized dishwasher is typically 24 inches wide.

304 sq. ft.

Size of the dressing room in the 14-

rents in NYC from 2000 to 2012, to $1,100. Nationwide that spike was 44 percent. Those hikes are, not surprisingly, part of the impetus behind smaller and smaller living.

room, 10,100-square-foot Lenox Hill townhouse at 107 East 61st Street, which Sotheby’s International Realty listed for $29 million earlier this year.

The dressing room has 15 closets.

11 ROOMS - BY THE NUMBERS

NIKKI FIELD Senior Global Real Estate Advisor, Associate Broker | 212.606.7669 | nikki.field@sothebyshomes.com | www.nikkifield.com The Field Team | Ranked #1 Sales Team 2014 | ೱௗӄౚၗుວৎᆶୗࠖႥᇬ๮Ӧౢ‫ޑ‬ᐏ East Side Manhattan Brokerage | 38 East 61st Street, New York, NY 10065 Sotheby’s International Realty and the Sotheby’s International Realty logo are registered (or unregistered) service marks used with permission. Operated by Sotheby’s International Realty, Inc.

26 April 2015 www.TheRealDeal.com

33% Portion of NYC households with

75% Increase for median apartment

Sources: Curbed, CNN Money, New York Times, New York Observer, Politico Magazine and TRD reporting.

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: F O SK E

D E H T T

A

LOU SWITZER nless you’re a building owner or a company with a large New York City office-space footprint, you’ve probably never heard of Lou Switzer. But his eponymous interior design firm has reimagined spaces for the likes of Citigroup and entertainment giants like EMI (which broke up in 2012). The 51-person firm, founded in 1975 — the largest minority-owned firm of its kind — did roughly $11 million worth of business in 2014. Most recently, Switzer, 66, completed IBM’s new 150,000-square-foot Watson headquarters at the newly constructed 51 Astor Place. The Switzer Group is also working on a 60,000-square-foot Williamsburg headquarters for Vice Media and will soon redesign AMC Networks’ 350,000-square-foot headquarters at 11 Penn Plaza. The firm’s projects range from 50,000 to 500,000 square feet. For his own office at 3 East 54th Street, he asked for the worst space in the building, then spruced it up. “We ripped it apart and redesigned it,” he said.

U

BY CLAIRE MOSES

SOUTH CAROLINA

SUSPENDERS

A native of Orangeburg, South

Switzer is known for his signature colorful

One of Switzer’s employees brought this

Carolina, Switzer moved to New

suspenders. He wears them in homage to

amber-colored ceramic ashtray

York straight out of high school in 1966.

Bob McCain, who gave him his first job in

back from a recent trip to her

A year later, he enrolled in night school at

1966 at Sherbourne, a now-defunct interior

hometown in China. Switzer

the Pratt Institute, where he studied design.

architecture firm. While he started in the

doesn’t smoke, but keeps

Today, he brings his children to visit family in his

mailroom, Switzer quickly worked his way

it on display in his office.

home state every Thanksgiving.

up. Switzer said McCain was always elegantly

Switzer himself visited Hong

dressed. “He had on these bright red braces,

Kong when it was still under

silver white hair and a silver beard.”

British leadership.

JOE DIMAGGIO

ASHTRAY FROM CHINA

Roughly three decades ago, Switzer designed the Bowery Savings Bank’s offices on 42nd Street.

JETS HELMET

At that time, retired Yankee

HOLE IN ONE

slugger Joe DiMaggio was

Switzer was playing in Key Biscayne,

with an autograph by Joe Namath.

a spokesman for the bank.

Florida, in 1996 when he accomplished

One day, Joe Klecko — another

Switzer met the Hall of Famer

every golfer’s dream: A hole

Jets alumni and friend of

at a meeting. DiMaggio

in one. “I remember that day,”

Switzer’s — stopped by

autographed the picture for

he said, recounting his friend

the office. Switzer wasn’t

him, but “it’s worthless,” Switzer

enthusiastically yelling and rounds of

there, so Klecko scribbled

said, noting that he made it out

high fives after the perfect swing. As for

his own autograph on

to “Lou.”

Switzer bought a New York Jets helmet

the vital stats on the lucky shot: He

the helmet, claiming

was on the eighth hole and used a

that one “Joe from the

pitching wedge to make the

Jets” wasn’t enough.

148-yard ace.

ROCKING CHAIR A gift from the Young Presidents Organization,

MICHELLE OBAMA PHOTO

an organization that brings

This photo was taken at a friend’s house for a 2008 fund-raiser

together young business

before Barack Obama

leaders. In 1999 he received the

was elected president.

customary rocking chair from

Obama, traveling in

Barbara Corcoran, who was then

Europe, wasn’t present

the president of his chapter. “We got

at the intimate gathering.

booted at the same time,”

The future first lady had

he said, noting that they

left, but returned to pose

aged out of the group together.

28 April 2015 www.TheRealDeal.com

for the shot.

ARTWORK Above the couch in Switzer’s office hang three paintings by Charles Biederman, a well-known abstract artist who died in 2004. Switzer owns works by a number of artists, but has a penchant for colorful abstracts.

PHOTOGRAPH OF LOU SWITZER FOR THE REAL DEAL BY MAX DWORKIN

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COMMERCIAL MA R K E T

Class A office tower sales accelerate As deals increase for Manhattan office buildings, a look at who is digging in and who might sell next

BY ADAM PINCUS arge Manhattan Class A office building sales are on fire.

In a rebound following several slow years, 12 towers worth nearly $9 billion combined sold or went into contract in the first quarter of 2015 alone, far outpacing the rate for the past four years. In comparison, from 2010 to 2014, between 14 and 16 office skyscrapers worth a combined $4.7 billion to $10.6 billion sold each year, an analysis of data from Real Capital Analytics showed.

Among the most notable sales so far this year was 1095 Sixth Avenue, in contract for $2.2 billion to a joint venture between Ivanhoe Cambridge and Callahan Capital Partners, and 730 Fifth Avenue, sold for $1.75 billion to a partnership between Jeff Sutton and General Growth Partners.

The accelerated pace of transactions reflects rising rental rates, easier lending and eager buyers.

Like any commodity, high demand and limited supply keeps prices high. There are fewer than 250 large Class A office buildings in Manhattan with 450,000 square feet or more, according to a review of data from CoStar Group.

And even as developers build more office towers in Lower Manhattan and Hudson Yards, older properties are being converted to residential use, including 550 Madison Avenue in the Plaza District, and a large portion of the Woolworth Building Downtown.

To get a handle on the universe of potential properties for sale, The Real Deal took a look at scores of buildings and, with input from real estate insiders, estimated nearly 50 held by owners who are likely to sell, including SL Green Realty, GGP and David Werner.

Among those potentially on the block are Rockwood Capital’s 636,000-square-foot 2 Grand Central at 140 East 45th

L

Good for Management.

Street and EDGE Fund Advisors 907,000-square-foot 1540 Broadway in Times Square.

The remaining 200 or so properties are owned by landlords who these insiders believe intend to hold on to the assets for a decade or more. For example, Rudin Management is considered unlikely to sell 345 Park Avenue or 3 Times Square, and Boston Properties is expected to hang on to its controlling stake in the General Motors Building and 601 Lexington Avenue, for some time.

Some see an increase in owners considered long-term holders.

“For pension funds and foreign investors, the likelihood is that they have a longer hold period than private equity or an entrepreneurial owner,” said Eric Anton, a senior managing director at the brokerage HFF. Stephen Shapiro, a senior vice president at JLL, said some of the large Chinese firms snapping up

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Jeff Sutton and General Growth Partners bought the Crown Building at 730 Fifth Avenue for $1.75 billion from the Winter and Spitzer families. Right: Among the most notable recent tower sales was Blackstone’s 1095 Sixth Avenue, now in contract to a joint venture between Ivanhoe Cambridge and Callahan Capital Partners for $2.2 billion.

NYC properties plan to hold their newly acquired assets for decades.

Recent Class A purchases by Chinese firms include 1 Chase Manhattan Plaza, which Fosun International purchased for $725 million, and the office portion of 717 Fifth Avenue, in contract to sell to the Anbang Insurance Group for an estimated $400 million to $500 million.

But Robert Knakal, chairman of New York investment sales at Cushman & Wakefield, noted that changing circumstances can alter even seemingly firm plans. He recalled another rush of foreign investment in the 1980s that was supposed to last for a generation, driven by the Japanese, which ended in the 1990s with a global recession.

“When the Japanese bought, they were considered long-term holders who own property for hundreds of years,” he said. But today, the Japanese own just a few of the Manhattan buildings bought in the 80s, Knakal said.

Some of the city’s smart money, in fact, is looking to be a net seller.

SL Green, Manhattan’s largest office landlord, said last fall that it expects to sell $600 million worth of office buildings this year in New York, while it expects to spend $400 million buying buildings.

Knakal expects more large Class A office product to hit the market this year, and said he will try to convince more owners to let go.

One self-proclaimed long-term holder, SJP Properties, said it is getting cold calls to sell.

Last year, the firm sold a 45-percent stake valued at about $630 million in its 1.1 million square foot 11 Times Square to Norges Bank Investment Management, a Norwegian government pension fund.

“We are approached in some cases directly, in others through an intermediary — a broker, an attorney, a banker,” said Jeff Schotz, executive vice president at SJP. Sometimes the caller will offer an enticing capitalization rate, or say they will sign confidentiality agreements, in exchange for looking over the financial documents. But, Schotz said, his firm tends to sell buildings through hired brokers, not “off market.”

The main drivers behind so many interested buyers are rising asking rents, a tight market supply in the face of anticipated office rent growth and foreign demand for “gateway city” assets.

But Schotz said it’s hard to divine when an owner will decide to sell. “What it comes down to,” he said, is “What are their goals with the asset in question?” TRD

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In their words...

The funniest and most insightful comments on real estate

“He’s one of the great designers.

But this is a fucking train to Jersey.”

Mitchell Moss, director of NYU’s Rudin Center for Transportation, on the nearly $4 billion cost of Spanish architect Santiago Calatrava’s transit hub.

“I’m not doing this for enjoyment. I’m doing this because the country is in serious trouble.”

Donald Trump, on his latest presidential run.

“Got back on the helicopter, I went home and I made it in time for the five o’clock feeding.”

Forest City Ratner’s MaryAnne Gilmartin, on taking a business trip to a remote location when her second child was just two weeks old and she had to rush home to nurse the baby.

“I want to get people’s attention — and what’s one way to get attention?

Grabbing public space and setting up a forest in the most incongruous place imaginable.”

Botanist and urban ecologist Marielle Anzelone, who launched a Kickstarter campaign to transform a portion of Times Square into a “pop-up” forest.

32 April 2015 www.TheRealDeal.com

“We are by no stretch of the imagination done looking at this.”

“I stopped in front, and there was a big garbage Department of Investigation Commissioner Mark Peters, truck in front of it. I on the continuing probe into bribery and other shenanigans at the Department of Buildings. called him and I said, ‘Did you give me the “Pay [inspectors] more money.” right address here?’ ” David McCredo, president of the union representing building inspectors, on how to end the corruption that has seemingly plagued the Buildings Department for decades.

“In the law, disqualification motions are the highest form of flattery. No one moves to disqualify shitty lawyers.”

Real estate attorney Stephen Meister, recalling a case in which an opposing counsel attempted to have him removed.

RXR Realty President Michael Maturo’s reaction when Scott Rechler sent him to see the Starrett-Lehigh Building for the first time.

“I’m counting on living long enough for at least three stops to be built.”

Robert A.M. Stern on the Second Avenue subway, speaking at the launch of 20 East End Avenue.

Sources: New York Magazine, Commercial Observer, Capital New York, Crain’s, Curbed, Twitter and TRD reporting

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RESIDENTIAL BROKERAGE Corcoran CEO Pam Liebman said she’s not looking to “create a couple of superstars” but rather to “create and grow a great brand.”

CORCORAN VS.CORCORAN SUNSHINE The firm’s new-development success has alienated some top-producing resale agents, but changes are afoot

BY E.B. SOLOMONT n a business where information is currency, Corcoran Group’s Pam Liebman is one of the richest around. So when she heard that her former sales director, Bill Cunningham, wasn’t happy in his new job as president of Trump International Realty, she picked up the phone.

“Are you ready to come back?” the company CEO asked. The two met for drinks at the Regency that late December evening, and on Jan. 6, Cunningham returned to

I

Corcoran’s flagship office at 660 Madison Avenue as the brokerage’s general sales manager.

“He belongs here,” Liebman said during a recent interview in her office, where she called Cunningham’s return a “coup.”

In addition to Cunningham, Corcoran has seen the return of several top agents and managers, following a string of bruising defections last year.

While other firms have borne similar losses, the Corcoran departures have exposed a particular vulnerability at the firm, where the outsized success of its new-development arm has alienated some top-producing resale agents.

At Corcoran, more so than at other firms, the resale business and new-development sales are separate: The Corcoran Group’s nearly 1,200 agents in Manhattan predominantly focus on resales, while the 150-person affiliated Corcoran Sunshine Marketing Group, headed by Kelly Kennedy Mack, handles new-development sales. While that strict separation has contributed to Corcoran Sunshine’s ability to trounce its competitors, it has also made many Corcoran agents feel boxed out of the action.

Former Corcoran agent Lauren Muss, who joined rival Douglas Elliman last fall,

opportunities I was missing that were available here for me,” she said at the time of her departure, explaining that not being able to work on new development was a key reason that she left. (Muss, who declined to comment for this story, now has a $38 million listing at Macklowe Properties’ 432 Park Avenue, which Elliman’s new-development marketing division represents.)

Condos and competition Last year, Corcoran sold a record $18.5 billion worth of residential real estate in New York, the Hamptons and South Florida. That included $4 billion in new-development properties. And as new-development prices have risen, so has the average sales price at Corcoran Sunshine. In 2014, the firm’s average property went for $4.6 million, the highest in its 25-year history.

“It’s a machine,” Liebman said of the marketing arm, which was created when Corcoran Group Marketing merged with Louise Sunshine’s Sunshine Group in 2007.

Increasingly, there appears to be room at Corcoran for brokers to work on new developments.

“I’m not all of a sudden going to change what has been, literally, the most successful real estate company in the country in order to compete with startups that may or may not be here long term.”

PA PAM A M LIEBMAN, L I EB LI LIEB E B MA EBMA MAN N , CORCORAN C OR O R CO ORCO CORA O RA R A N GR RAN G GROU GROUP ROU OUP P

summed up it up this way: “I felt there were PHOTOGRAPH OF PAM LIEBMAN FOR THE REAL DEAL BY MAX DWORKIN

(Corcoran Group, as a whole, is owned by Realogy’s NRT division, which bought the firm for $70 million in 2001.)

Corcoran Sunshine represents more new-development units than any firm in the city, with more than 2,700 units in its roster, according to a ranking in November

by The Real Deal. Included on its docket are some of the most-watched developments in the city, like Silverstein Properties’ 30 Park Place and Vornado Realty Trust’s forthcoming 220 Central Park South. Halstead Property Development Marketing ranked second with more than 2,240 units.

And the overall pipeline of units is increasing, and changing the game.

Corcoran Sunshine projects 6,500 new units total will hit the market and be up for grabs in 2015, up from about 2,500 in 2014. www.TheRealDeal.com April 2015 35

RESIDENTIAL BROKERAGE The influx of new-development projects, which started several years ago, means more competition from other firms.

Back in 2011, for example, Elliman bolstered its new-development division, hiring Related Company executive Susan de França as president and CEO of Douglas Elliman Development Marketing. And in 2012, the division hired Cliff Finn, former president of Citi Habitats Marketing Group, which is also part of the Realogy family.

Elliman did not respond to requests for comment, but the firm is marketing more than 2,120 units, according to TRD’s ranking, including 432 Park and the Soori High Line at 522 West 29th Street, where units come with personal pools.

It’s no secret, however, that the big brokerages have fundamentally different models.

Where Corcoran Sunshine is known for its heavy emphasis on market analytics to price and sell units, and does not use individual powerhouse agents to draw in buyers, Elliman’s new-development sales, while also based on market data, are brokerdriven. In other words, Elliman wants highprofile brokers like Fredrik Eklund, the star of the TV show “Million Dollar Listing New York,” to be the face of its new-development projects, while Corcoran Sunshine does not.

Instead, Corcoran Sunshine sales associates typically run sales offices, while the real behind-the-scenes power players — the project managers and executives — work with developers on design, marketing and sales strategy.

Elliman CEO Dottie Herman has said in the past that she believes in incorporating resale brokers in new-development sales.

“I never believed in the Sunshine model,” she told TRD in 2013. “I tell the developers, ‘If it was me, and it was my money, I would want the best of the best. I would want the best real estate brokers working for me, and most of those brokers won’t give up their entire business to work for you.’ ” But Liebman is wholeheartedly behind the model.

“I’m not here to create a couple of superstars,” she said. “I’m here to create and grow a great brand that benefits everybody.”

“Developers have a lot of money at stake,” she added. “Sometimes it’s a hurdle getting [agents] to understand that a developer doesn’t want them sitting on their site and them running out to do a sale, or potentially having a conflict where a customer comes in and they’re worried they may sell them something else.”

But what’s good for a developer isn’t always what’s good for a broker.

Some salespeople who have left Corcoran said that they feel they have more options now. “There is more access and more flexibility” to new development, said one former Corcoran agent, who spoke on the condition of anonymity.

“Both approaches have merit,” said another former agent. But, the source 36 April 2015 www.TheRealDeal.com

continued, agents increasingly “have a hunger to be involved in different areas of real estate, rather than just show apartments and hold open houses.”

Paul Purcell, co-managing director of William Raveis NYC and a former president of Elliman, said there is merit to isolating the new-development division.

“It’s like a shiny, shiny star that people are trying to grab onto,” he said of new-development. “If you let everyone try to be involved in it, you don’t have a new-development program. You’d ruin your new-development business.”

Corcoran Sunshine President Kelly Kennedy Mack.

737 Park Avenue.

unprecedented levels of turnover at the Corcoran mothership.

In addition to Muss, other top brokers who recently jumped ship include Robby Browne, Maria Pashby and Louis Buckworth, who all went to Brown Harris Stevens. (Buckworth was later named sales director at 520 Park Avenue.) In addition, Lindsay Barton Barrett went to upstart tech-driven brokerage Compass, along with roughly 45 other agents and three managers, according to Compass’ calculations.

(See related lawsuit story on page 38.)

While Liebman said losing highproducers is “a hit,” she said the company is big enough to “survive.”

“We’re never happy to lose somebody, but we’re also not in a bidding war for agents,” Liebman said. “We feel that we have a great company, but you have to buy into the vision with us.”

In recent months, some agents returned to Corcoran, including Andrea Wohl Lucas and Fabienne Lecole, who did stints at Elliman and William Raveis, respectively.

Of his return, Cunningham said: “This position at Corcoran is something that doesn’t come around too often.”

Lecole, who spent five months at William Raveis, said she left Corcoran seeking “new energy” but quickly realized the brand was “something that I underestimated.”

“The power of Corcoran is huge,” she said.

Blurred lines Still, there seem to be some changes underfoot at Corcoran.

“Historically, it was all about the Corcoran Sunshine brand and not the broker, but now they seem to be inserting the broker as well,” said Stephen Kliegerman, president of Halstead Property Development Marketing. “They’re actually changing their approach.”

Corcoran’s Deborah Grubman (above) and Hilary Landis recently listed pricey new-development units.

Bill Cunningham left Corcoran and returned as general sales manager.

Broker boomerang While Corcoran Sunshine is going gangbusters, the last 12 months have seen

For example, Corcoran brokers Hilary Landis and Danielle Pessis have several top units at Macklowe’s 737 Park, including a $39.5 million penthouse that Landis is selling.

Meanwhile, Noble Black and Deborah Grubman are marketing the $60 million penthouse at the Baccarat Residences.

Sources said Grubman was set to flee for another brokerage, but then decided to stay put. A short while later she was listing the Baccarat unit. Grubman did not respond to a request for comment.

Meanwhile, at Knightsbridge Properties’ Cast Iron House in Tribeca, Todd Vitolo and Susanne Columbia have the listing for several Shigeru Ban–designed duplexes.

And Deborah Kern, a Corcoran agent, recently joined Corcoran Sunshine and was named the sales director at 220 Central Park South.

Liebman denied that there are any major changes underway. She said there has long been some overlap between Corcoran and Corcoran Sunshine. For example, at the end of a project like the Baccarat, she said,

the brokerage has been moving its on-site Corcoran Sunshine team to the next project and bringing in top resale agents to finish off sales.

Typically, it will be a top buyers’ agent, who has had substantial sales in the building. “Sometimes the developer just picks,” Liebman said. “It’s super-competitive who gets that, because everyone wants that.”

But increasingly, there appears to be room at Corcoran for brokers to work on new developments.

“They are rethinking their newdevelopment offerings to top agents because that was a main source of contention,” one source said.

Julia Boland, a longtime resale and newdevelopment broker, moved to Corcoran in February after years at Halstead and a stint at William Raveis.

Boland said she was hired by William Raveis in the fall to launch a new-development sales division; when the brokerage put those plans on hold, she jumped at the opportunity to go to Corcoran, where she could create a niche handling smaller new-development projects.

“They don’t have too many brokers who know how to take smaller projects that wouldn’t warrant Corcoran Sunshine attention,” she said.

Corcoran Sunshine charges developers a hefty monthly fee, and not all developers can afford that outlay.

“To put the economics in perspective,” Boland said, “You can have a building with a $100 million sellout that doesn’t warrant the Corcoran Sunshine brand.”

And Corcoran isn’t ceding smaller opportunities to competitors.

“At the end of the day, the Corcoran model works,” said a former top agent at the firm. But going forward, the firm may “encourage brokers to bring in their own inventory and do it in conjunction with Corcoran Sunshine, rather than compete.”

In October, Liebman tapped Gordon Hoppe, a longtime Corcoran Sunshine executive, for a new position as head of new-development sales at both Corcoran and Corcoran Sunshine.

His job includes “mentoring and managing Corcoran resale agents on newdevelopment sales,” according to a news release at the time. “Gordon’s role as head of sales for all Corcoran new-development business underscores Corcoran’s continued commitment to provide opportunities and support for all Corcoran agents,” Liebman said in the release.

While sources said the massive pipeline of new-development projects is bound to prompt adjustments to the firm’s sales model, Liebman cautioned against betting on any major changes.

“I’m not all of a sudden going to change what has been, literally, the most successful real estate company in the country in order to compete with start-ups that may or may not be here long term,” she said. TRD

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RESIDENTIAL BROKERAGE

A poaching feud erupts in court Inside Corcoran Group lawsuit’s claims against rival Compass

BY E.B. SOLOMONT AND KYNA DOLES oo many agents were leaving, including key players and managers, all heading to the same place, and something had to be done.

That was the perspective of a venerable firm, which watched as over 50 agents departed for the greener pastures of a startup, the subject of similar complaints from another firm just last year.

To stop the bleeding, the Corcoran Group slammed rival Compass with a lawsuit in late March, accusing the upstart of “brazenly and intentionally” raiding key Corcoran offices.

But to Compass, the agents were independent contractors whose freedom was being inhibited by Corcoran. Compass

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in its hiring of 51 agents from Corcoran that threatens Corcoran’s New York operation with “irreparable harm” if it is not stopped.

The suit, which seeks a temporary restraining order against Compass, also named former Corcoran agents and managers Maryanne Farrell, Eugenio Martinez Huet, Patrick Brennan, Debra Bondy, Claire McFeely and 100 “John Doe” defendants.

Compass responded to the Corcoran Group’s lawsuit against it, saying in a statement to The Real Deal that the New York State Supreme Court has “flatly rejected” Corcoran’s complaints against the startup brokerage.

According to Compass, the “Court scoffed at Corcoran’s attempt to prevent its agents

Former Corcoran agent Gene Martinez’s jump to Compass prompted a lawsuit. Right, Compass CEO Robert Reffkin denies any wrongdoing.

Offer letter reveals details of Compass pay package Exiting broker left offer letter on Corcoran computer hen Gene Martinez, the former Soho manager for the Corcoran Group, decamped to Compass earlier this year, he accidentally left a key document on his Corcoran work computer: A copy of his job offer from Compass.

In an affidavit that’s part of a lawsuit filed last month in which Corcoran accuses Compass of “brazenly” poaching agents, CEO Pam Liebman said, “Martinez left a copy of the Compass/Martinez Agreement on his work computer at Corcoran and it was discovered during a review of Martinez’s work email after rumors surfaced during the week of Feb. 23, 2015 that Martinez was present and working in New York.”

Corcoran spotted a red flag while combing through the contract, the suit said. Despite Martinez’s agreement to forgo work for a Corcoran competitor for nine months, he told Compass otherwise, according to the suit.

“You represent that you are not bound by any employment contract,” says Compass’ offer to Martinez, a copy of which is included in the case file. “[Compass] acknowledges you had a prior agreement with the Corcoran Group which shall not be deemed applicable to this provision.”

According to court documents, Martinez was earning a salary of $350,000 at Corcoran.

Compass, which is backed by serious venture capital money, offered Martinez a base salary of $400,000 plus other incentives.

In a statement to TRD, Compass claimed: “At Corcoran, Gene’s all-in compensation was in excess of $600,000. Gene elected to take a lower compensation package at Compass because he firmly believes in the vision of the company.”

The statement added: “Given that he is working in D.C. and Miami, and that he received explicit approval from Corcoran to do so at Compass in those regions, Gene and Compass agreed that his New York non-compete provision with Corcoran was not deemed applicable and stated so in his agreement.”

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Details of the offer Compass made to Martinez included: Base salary 2015: $400,000 (annualized) 2016: $425,000 2017: $450,000 2018: $475,000 In the suit, Corcoran accused Patrick Brennan, left, the former senior managing director of its Park Slope office, of violating his termination agreement not to solicit Corcoran employees. Former Corcoran agents Maryanne Farrell, center, and Debra Bondy, right, were among others who moved to Compass mentioned in the suit.

Signing bonus One-time payment of $120,000

The Corcoran Group slammed rival Compass with a lawsuit in late March, accusing the upstart of “brazenly and intentionally” raiding key Corcoran offices. said it was “disappointed that Corcoran, in its attempt to retain agents who seek to join Compass, has sought to use the legal system” to block their moves.

The bitter feud between rival brokerages burst onto the public stage last month, capped by an unusual twist — an offer letter mistakenly left behind, laying bare key compensation details (see sidebar).

According to the suit, Compass used “unlawful methods” in a “coordinated, multi-front assault of unfair competition” 38 April 2015 www.TheRealDeal.com

from working for Compass and merely instructed Compass’ personnel to continue complying with company policies already in place — not accessing others’ listings databases and following existing non-solicit agreements.”

On March 24, a judge granted a temporary restraining order preventing former Corcoran agents who defected to Compass from accessing Corcoran’s listings database.

But the judge denied Corcoran’s request

Annual individual bonus amount (Based on his performance as Compass’ lead employee for “sourcing, recruiting, hiring and retaining agents” that generate $10 million in gross commission income for the company.) $175,000 (first year) $150,000 (second year) $125,000 (third year) $100,000 (fourth year)

commissions, for clients referred to the firm.

Expense account $3,500 monthly for travel, food and lodging in Miami in connection with Compass’ expansion there.

Benefits 20 days vacation

Stock options Incentive stock option to purchase 58,979 shares of common stock at the “fair market value.” (The total number of shares issued by Compass was not disclosed, but the startup was valued at about $360 million in July, following a $40 million Series B round.)

Referral fee 20 percent of Compass’ gross

By E.B. Solomont

Continued on page 130

www.TheRealDeal.com January 2014 35

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Shedding light on Sunnyside Yards Mayor de Blasio’s proposal to build on the rail yards is far from the first for the Western Queens’ site

BY MARK MAURER hen Mayor Bill de Blasio called for the creation of 11,250 affordable housing units at Sunnyside Yards, he was unearthing an idea tossed around for more than 70 years.

The 200-acre, 1.75-mile long rail yard between Long Island City and Sunnyside is large enough to form its own neighborhood,

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study aimed at answering questions about the site’s potential. The deadline for EDC’s request for proposals for the study was March 20.

Opposition to de Blasio’s plans cropped up quickly. Gov. Andrew Cuomo backed a proposal from one-time Deputy Mayor (and former Bloomberg LP CEO) Dan Doctoroff — created with SHoP Architects and HR&A Advisors — to construct a 3.1 million-squarefoot convention center, 7,000 market-rate

The Sunnyside Yards site stretches east from the 7 train tracks to 43rd Street. It is bordered on the north by Northern Boulevard and the south by Skillman Avenue.

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The mayor’s office has said that the project could start without MTA property. “We hope to continue collaborating with the MTA here.” a city official said.

“This would be a better project for it.” which is in essence what de Blasio wants to do. In his State of the City address, the mayor revived talk of building a platform over the tracks to hold a colossal new housing project, roughly the size of Stuyvesant Town-Peter Cooper Village.

The city Economic Development Corp. will soon choose a firm to conduct a feasibility

units and 7,000 affordable units. The platform and convention center would cost a combined $8 billion.

Critics said EDC should have commissioned its own study for a residential redevelopment before putting out a request for proposals, arguing that not enough preparatory work was done in advance. The early cost estimates for

Cost and other deterrents

Potential bidders

evelopers are skeptical about bidding for a project like this. Sources said if the cost of building a platform were to outweigh the price of air rights, the project could not be justified. However, land values, which are steadily climbing (see related story on page 66), could catch up by the time a deal is struck.

Another issue is the upfront expenses: almost half of the decking and infrastructure costs would arise in the first few years of a likely multi-decade undertaking.

Eric Benaim, CEO of Queens-based residential brokerage Modern Spaces and a Long Island City resident, echoed many neighbors when he said a hospital, school and parkland would benefit the area more than a large-scale housing complex. But developers said community uses would not cover the project’s substantial costs.

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he developers most likely to Ratner bid on a project of this scope are the ones with experience, a small pool. Forest City Ratner, the Related Companies, Brookfield Property Partners and Silverstein Properties, for example, have built over rail yards.

“The big guys with the deep pockets and the credibility will be the ones making a run at this,” said Decio Baio, a partner at Queens- Larry Silverstein based commercial brokerage Stephen Pinnacle Realty.

Ross Recent examples of similar projects include Hudson Yards, Pacific Park (formerly Atlantic Yards), the High Line and Manhattan West.

Yet this project could potentially dwarf even the largest underway. The roughly 26-acre Hudson Yards is projected to cost $20

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any type of project there are likely far too low, and more comprehensive research should have occurred prior to the mayor’s announcement, sources said.

On the local front, State Sen. Michael Gianaris and City Councilmember Jimmy

Van Bramer, who represent Sunnyside, Long Island City and nearby neighborhoods, expressed concerns about the impact on the community’s character and the heightened burden the surge in housing would have on the crowded subway system.

billion, while the 22-acre Pacific Park is estimated at $4.9 billion.

Both developments are rising above Long Island Rail Road train yards. The five-acre Manhattan West complex, which will sit on a platform over tracks leading into New York Penn Station, has an estimated cost of $4.5 billion.

Sources said Forest City’s close ties to de Blasio — for example, Bruce Ratner’s fundraising for the mayor’s campaign — could give the company an inside track.

Forest City raised $73,000 for his 2013 campaign, and is expected to receive $90 million in tax-exempt bonds from the city this year. Silverstein Properties also is well-versed with public-private partnerships, the World Trade Center complex being one of the largest projects of this kind.

The developers each declined to comment.

WHO OWNS WHAT

SUNNYSIDE YARDS TIMELINE The Pennsylvania Railroad opens Sunnyside Yards.

1910

1960s G Nelson Gov. Rockefeller floats the idea of constructing a platform.

40 April 2015 www.TheRealDeal.com

Samuel LeFrak, in conjunction with architecture firm Gruzen & Partners and the state Urban Development Corp., proposes mixed-use towers on platforms over the site.

The site is named as a potential location for athlete’s housing in the city’s bid to host the 2012 Olympics.

1971

1997

1989 Amtrak considers a mixed-use project.

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Acres owned by Amtrak, primarily in the eastern half of the site close to the Sunnyside Gardens Historic District.

Acres owned by the MTA, some of them located at the tunnel exit of the East Side Access terminal on Northern Boulevard, near 40th Road. A large portion of the MTA’s ownership extends 22 feet up in the air, before the city’s air rights kick in, a source said.

44 23

Acres of city-owned air rights above MTAowned property.

2006 Dan Doctoroff, then deputy mayor, commissions a citywide w study of possible housing sites, which finds that Sunnyside Yards could hold 35,000 new housing units.

Acres owned by private owners, including General Motors, along the easternmost edge of the site.

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RISING STARS

REAL ESTATE’S RISING STARS The 35-and-under crowd that’s breaking records, launching companies and generally shaking up the industry

BY RICH BOCKMANN

hey’ve brokered billions of dollars in deals, broken records, and launched companies. And they’ve all done it all in a cutthroat and unforgiving industry that’s not known for being kind to novices.

This month, The Real Deal polled dozens of sources to shake out the names of the newest crop of real estate’s 35-and-under rising stars. For most of them, getting to this point wasn’t easy, especially since they’ve come up during the recession and post-recession years, which derailed many real estate careers.

“If you can survive your first three to five years and find your niche, it can be a truly rewarding career,” said Jonathan Tootell, 32, a broker at Newmark Grubb Knight Frank and chairman of the Young Men’s/Women’s Real

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42 April 2015 www.TheRealDeal.com

Estate Association of New York, which has about 450 members ages 23 to 44.

While there are undoubtedly plenty of other baby-faced players in the industry making their mark, this year’s batch of up-and-coming stars all stand out among their peers for the amount of business they’re handling, the high-level responsibilities they’re taking on and the impact their companies have made on the industry.

They join pros we’ve previously featured, like residential broker Kyle Blackmon, (then at Brown Harris Stevens, now at Compass); commercial broker James Nelson (then at Massey Knakal, now at Cushman & Wakefield); Silvershore Properties’ David Shorenstein and Jason Silverstein and Avison Young’s Jason Meister. Read on to find out who’s in TRD’s 2015 class of rising stars. www.TheRealDeal.com January 2014 35

RISING STARS Ash, who began his career in 2003 doing office leasing at the Kaufman Organization and then did a brief stint at Eastern Consolidated, said he was drawn to the sales side Founder, Prince Realty Advisors of the business when he learned the amount of a friend’s commission check. But there was a steep learning curve. hings got off to a slow start for David Ash, who founded his boutique “Knowing leasing is one thing and knowing sales is another,” said Ash, adding commercial brokerage in 2010. the latter is “a lot more suited to my personal skill set.”

“Basically, I ended up taking a leap of faith,” he said. “Unfortunately, it Now, his resume is littered with high-profile deals. Last year alone he was the was not the right time.”

The family loan Ash had taken out to start his firm was running thin, and sole broker when Madison International Realty paid $68 million for a 49.5-percent after a year of treading water in the midst of a down market that wasn’t handing interest in Ark Partners’ corner property at 14th Street and Sixth Avenue. He also out quick rewards, he gave himself a six-month deadline to close his first put together a $200 million deal for his former employers at Kaufman deal or shut down the business. to lease four buildings in the Ring brothers’ portfolio. Ash swooped About four months later, in early 2012, his fortunes turned, in while Gary Barnett’s Extell Development was in contract for the larger Ring portfolio, beginning negotiations with Barnett and he put the first notch in his belt: repping both sides on before Extell even closed on its transaction. That move got him the sale of a retail condo at 106-110 Seventh Avenue for $30 a nomination for a REBNY Ingenious Deal of the Year award. million.

Then he hit a groove. Within the next few months Ash And to round out the year, he set a record when he negotiated closed two big off-market deals: Equity Residential’s $280 a complex deal to create a $300 million retail condo for Inditex, million purchase of JD Carlisle Development’s 301-unit rental the parent company of clothing store Zara, at 504 Broadway in the Beatrice at 105 West 29th Street, and HFZ Capital’s $62 Soho, setting a per-square-foot record for the neighborhood. million acquisition of 11 Beach Street, a condo conversion.

To date, his six-person firm has closed about $1.7 billion David Ash’s firm has closed about $1.7 billion in deals. in deals, Ash said.

“His business model is really about ferreting out offHe added, “2014 was really the solidification that what we’re doing is not simply due market transactions,” said Grant Greenspan, the head of brokerage at the Kaufman Organization, where Ash got his start in commercial real estate. “He’s very good at that to the market, but due to our understanding and the fact that guys really enjoy doing and has the personality for it.” business with us.”

David Ash, 34

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David Snider, 29 Chief operating officer, Compass t’s been two years since the self-proclaimed revolutionary residential firm Compass broke onto the scene, and during that time COO David Snider has been behind the curtain running day-to-day operations.

Snider also led the charge on Compass’ A- and B-series funding rounds, raising $73 million, helping to deliver an eyepopping $360 million valuation to the company last summer.

The Harvard Business School grad met Compass co-founder Robert Reffkin in 2009. Reffkin, then a Goldman Sachs vice president, was working on the side to raise $2 million to set up a non-profit.

“I made a mental note that if he did something on the for-profit side, I would be very intrigued,” Snider recalled.

Three years later, Reffkin called Snider and asked him to meet up. At the time, Snider was working at the asset manager Bain Capital and Reffkin and Compass co-founder Ori Allon only had a handful of employees. (Reffkin and Allon are

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both 35 and under, but are already well established so weren’t included as “rising stars” here.)

Since then, Snider’s been the point person for some of Compass’ biggest endeavors including its massive funding campaigns and its high-profile recruitment of big industry brokers. He was instrumental in Compass’ biggest coup to date: luring superstar broker Leonard Steinberg away from Douglas Elliman.

Steinberg said Snider has a “calm and balance many years beyond his age.”

“He didn’t underplay the fact that me leaving a highly stable, lucrative situation in my life was a huge risk,” he said. “It was not some cheesy sales pitch.”

Graham Brooks — whose .406 Ventures is an investor in Compass — said Snider provides a good balance between Reffkin, who comes from the world of high finance, and Allon, an experienced entrepreneur who has already sold companies to Google and Twitter. “David sort of rounds out the trio,” he said. “It’s his first time at the C-level. He does an amazing job at making the trains run on time while learning the real estate space. That’s tough.”

Ashley Cotton, 35 Chief of staff and senior vice president of external affairs, Forest City Ratner Companies Ashley Cotton’s trump card is her government experience.

overnment affairs pro Ashley Cotton made the leap to the private sector three years ago, and quickly found herself in the middle of every significant project at Forest City Ratner.

Her employer is a company that goes big — from the decade-long megaprojects of the Barclays Center and Pacific Park, to redeveloping Long Island’s Nassau Coliseum and building part of the Cornell Tech Campus on Roosevelt Island.

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74 April 2014 www.TheRealDeal.com PHOTOGRAPH OF COTTON AND SNIDER BY DOMINIQUE PETTWAY

David Snider has spearheaded Compass’ massive fundraising efforts.

“Truly everything that we’re building or that has been built is in my portfolio,” she said.

Perhaps because of that, Cotton is quickly rising through the ranks.

Less than a year after landing at the firm, she was promoted to CEO MaryAnne Gilmartin’s chief of staff, a position created specifically for her.

In that role, she oversees personnel and develops key communication strategies.

“Ashley is superb at it,” Gilmartin said of Cotton’s role in senior management.

Cotton’s trump card is her government experience. She got her start fresh out of college working for Andrew Cuomo’s establishment-defying campaign for governor in 2002, and cut her teeth on his race for attorney general in 2006. After working for him in Albany she spent three years in the Bloomberg administration on Deputy Mayor for Economic Development Bob Steel’s team. In that role she shepherded projects like the NYU expansion and the first Domino Sugar Factory redevelopment plans through the city’s approval process.

“She’s really smart, and she’s someone who’s got relationships on both the city and state level,” said Suri Kasirer, a top real estate lobbyist, who counts Forest City as a client. “She’s worked in politics and she’s worked in government. I always personally think that’s a great mix, because anyone who thinks there’s no politics in government isn’t being realistic.”

When Cotton jumped to Forest City in 2012, the firm was getting ready to open the Barclays arena. Cotton was immediately charged with overseeing the company’s wideranging hiring agreement with the community that called for bringing on 2,000 employees, many of them local.

Gilmartin said when Cotton started at Forest City she had no private-sector experience.

But, she noted, that didn’t hold her back.

“Ashley stepped into Pacific Park at a challenging and tender inflection point when we were launching Barclays after a decade of litigation, economic turmoil and delays,” Gilmartin said. “In short order, she mastered an uncanny command of the material and molded her roles and responsibilities in a way that allowed her to take on a key position of leadership.” www.TheRealDeal.com April 2015 43

RISING STARS

Meir Milgraum, 34 Director of acquisitions and development, the Lightstone Group avid Lichtenstein’s Lightstone Group has amassed a development portfolio of $1.7 billion since it broke into New York City development in 2010.

As Lightstone’s director of acquisitions and development, Meir Milgraum has been on a tear since he joined the company in 2011, arranging acquisitions on a number of high-profile properties that stand out for their complexity.

“It’s certainly unusual to see someone his age handling projects like this, or at least someone who wasn’t born into a family that was doing a project,” said Luise Barrack, an attorney at the real estate law firm Rosenberg & Estis, who works with Milgraum on most of his deals. “He created all this value on his own.”

His deals include a complicated assemblage at 112-118 Fulton Street, which involved five buildings, seven different air-rights properties and buying out 32 tenants. Lightstone spent about $63 million on the properties, then turned around and sold them to the San Francisco-based Carmel Partners for $171 million.

In Gowanus, Lightstone took over a site where Toll Brothers had planned a condo project that never got off the ground,

D

Meir Milgraum won’t get into a deal unless it’s valued far below market rate.

Michael Mandel, 32

This is a caption for the

photo here is a caption Co-founder and CEO, CompStak here are about 200,000 commercial lease deals logged in the online database CompStak these days, but it wasn’t always that way. Much like a social network, Michael Mandel’s brainchild needed to reach a critical mass before it could take off.

“I have memories of sitting on the couch in my apartment calling all my friends and colleagues within the industry … and saying, ‘Hey, I’ve got this site with all these comps,’” recalled Mandel, co-founder and CEO. “‘Do you want to send one and help build it up? Hey, why haven’t you logged in yet?’”

“Until eventually, at some point, it just started working on its own.”

The site crowdsources leasing information, enticing brokers to submit information on their deals in exchange for access to other leases.

Since 2012, when it was launched by Mandel and co-founder Vadim Belobrovka, CompStak has grown massively, now including 200,000 “master comps,” which involved vetting roughly 1 million submissions from brokers and landlords. Today, the company counts some of the biggest names in the industry as customers, including Tishman Speyer, the CIM Group and Beacon Capital. And, in just a short amount of time, Michael Mandel has quickly sources say, it has become as essential to brokers as the more established made CompStak a commercial industry giant CoStar, which provides a broader set of information on real estate must.

T

Jed Wilder, 28, and Lindsay Krantz, 27 Rental brokers, Citi Habitats n average of five apartments each week: that’s the number of units the top-producing team at Citi Habitats rented last year.

In fact, the Wilder Team, the betrothed duo of Jed Wilder and Lindsay Krantz, was named the 2014 Team of the Year for rentals at Citi Habitats, the biggest rental firm in the city. That put them on top of 690 other agents.

For the year, the duo brokered 272 leases and seven sales valued at a combined $16 million, according to a company spokesman. On the rental front, the team’s dollar volume was 23 percent higher than the second ranked team.

Wilder, who worked in commercial brokerage at Halstead, and Krantz, who had a job at a wholesale jewelry company, decided to give residential brokerage a shot in 2012.

They started working together at Citi Habitats and found they were pretty good at it.

“Basically, we started off on fire,” Wilder said.

They rented about a dozen apartments per month in their first few months in the business, an accomplishment the two attribute to their aggressive posting of listings on websites such as Craigslist and Naked Apartments.

The duo quickly carved out a niche on the Upper East Side, gaining exclusive rental listings with five different landlords for more than 325 apartments.

Meanwhile, their sales included closing a Fifth Avenue co-op late last year for $3.9 million. And while they’re looking to grow that side of the business, Wilder said, they’re not looking to stray too far from their bread and butter.

“We don’t want to get away from rentals because ...,” he said, before Krantz chimed in and finished his sentence, “... we’re good at it.”

A

44 April 2015 www.TheRealDeal.com

repositioning it as a 700-unit rental development, one of the largest in the city. In Long Island City, the company developed the 200-unit rental tower Gantry Park Landing.

Milgraum was on the front lines for all these deals, handling everything from acquisitions to tenant buyouts.

“We have a tremendous amount of capital, which helps,” he said. “We won’t shy away from a deal that’s priced right, no matter how many deals we have.”

Lightstone says it now has more than 2 million square feet under development, making it one of the busiest firms in the city.

For his part, Milgraum got his start in development at Triangle Equities, where he worked for a year before moving to Pink Stone Capital for 18 months. At Pink Stone he bought the distressed note at 111 Washington Street for $48 million. The firm is now shopping the property for $265 million.

Milgraum has also been at the forefront of bringing Marriott’s millennial-focused Moxy flag to the city at a former office building at 36th Street and Seventh Avenue that that firm is repositioning, and at a development site on West 28th Street.

“He has had a tremendous hand in our growth in New York, spanning hotels and residential properties,” Lightstone President Mitchell Hochberg said of Milgraum.

Milgraum said he won’t get into a deal unless he can buy it for 30 to 40 percent below market rate. But he won’t divulge his method for reaching that point. “That’s my secret.”

commercial properties.

Mandel’s achievement is all the more impressive considering the doubters who thought creating a central reservoir of commercial leases was unthinkable. The sector is notoriously opaque — for years brokers have simply passed lease information to each other by word of mouth.

“Everyone thought it was crazy. Brokers are so cagey with their information. We all kind of laughed about it,” said Michael Plavin, a vice president at the tenant-brokerage Cresa, who worked with Mandel at Grubb & Ellis. “Here we are a few years later, and you don’t see a broker in New York City who doesn’t have it open on their screen.”

Mandel, who was the 2007 Rookie of the Year at Grubb & Ellis, said the company has raised more than $10 million in funding and grown to 45 employees.

The firm, which started in New York, has built up a database of comps in 14 major markets and is getting ready to launch in Denver in early April. The next move, Mandel said, will be to plant a flag in London.

“In the past, we’d launch one market at a time,” he said. “Now, the strategy is a bit different. Now we’re eyeing dozens of markets at a time.”

Lindsay Krantz and Jed Wilder, the married duo who head up the No. 1 rental team at Citi Habitats.

PHOTOGRAPH OF KRANTZ AND WILDER BY TOBIAS TRUVILLION; PHOTOGRAPH OF MILGRAUM

BY MAX DWORKIN www.TheRealDeal.com January 2014 35

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RISING STARS

David Kornmeier, 34 Broker, Brown Harris Stevens oft-spoken and mild-mannered, David Kornmeier is reminiscent in a number of ways of former BHS broker Kyle Blackmon.

Blackmon, who was featured on TRD’s 2011 list of young upand-comers and jumped to Compass last year, is one of the city’s top residential agents and known as a quiet Southern gentleman.

Kornmeier is cut from a similar cloth. He’s currently the highest-producing young broker at BHS, ranked in the top 3 percent at the company.

“He was cool, calm and collected,” said Julie Perlin, a broker at Stribling & Associates, who repped the seller in a $4.5 million Flatiron District deal last year, in which Kornmeier repped the buyer. “You don’t find a lot of brokers who say ‘I love doing transactions with another broker.’ They usually have more negative things to say.”

And it’s not just that he’s a polite guy.

To date, Kornmeier has closed about $500 million in sales, he said, including high-water marks such as a $19.5 million Fifth Avenue apartment and a boutique Midtown hotel for $28.6 million.

In 2012, the Wall Street Journal and REAL Trends ranked Kornmeier the No. 10 residential agent in Manhattan and No. 50 in the United States for total sales volume.

S

Josh Schuster is raising a $50 million fund.

That year he also grabbed attention when he sold a $14.5 million townhouse on West 74th Street, setting a per-squarefoot neighborhood record for a home not on a Central Park block.

Kornmeier got his start as an assistant to BHS veteran Wolf Jakubowski.

He said he learned to be disciplined about his price points, and picked up a few other lessons.

“I look young; I sound young. I am on the younger side. For a long time I was very concerned I didn’t fit a particular profile: I was ‘too young,’” he said. “I was talking to my dad about it one day when I was starting out. I asked him, ‘What should I do about it? Should I answer the phone in a deeper voice?’”

“I think there are a lot of cowboys in this business, and you have to be honest and straightforward to do really well.”

“For a long time I was very concerned I didn’t fit a particular profile: I was ‘too young.’ I was talking to my dad about it one day when I was starting out. I asked him, ‘What should I do about it? Should I answer the phone in a deeper voice?’”

DAVID KORNMEIER, BROWN HARRIS STEVENS

David Kornmeier has closed about $500 million in sales.

Josh Schuster, 31 Partner, DHA Capital osh Schuster, founding partner at the mid-market development firm DHA Capital, has been on a “road show” as of late, travelling to the Middle East and Hong Kong as he seeks to raise the company’s first fund of $50 million.

“We’re raising a sponsor-capital fund of $50 million,” said Schuster, who said the financing will allow the firm to grow its current development pipeline to $1.5 billion from about $400 million.

Projects in the works now at DHA include a 280-unit rental building at 535 West 43rd Street, a 200-unit rental property at 64-75 125th Street in Harlem and 12 East 13th Street, a condo conversion of a former parking garage in Greenwich Village, with a penthouse asking $30.5 million.

Before launching his firm with partner Dan Hollander, a former Clarett Group executive, the 31-year-old spent seven years working for Jason Halpern’s JMH Development in Brooklyn. In that position he led the redevelopment of a warehouse at 184 Kent Avenue into 340 rental units.

The project earned a Building Brooklyn Award in 2011 from the Brooklyn Chamber of Commerce for adaptive reuse. Jared Kushner, with partners LIVWRK and the Rockpoint Group, recently bought the building for $275 million.

Schuster also co-founded a non-profit called the Bicol Clinic Foundation, which helps build medical facilities in places like the Philippines, Nepal and Haiti.

And, he’s the youngest member to join the board at Baruch College’s Steven L. Newman Real Estate Institute, where he sits alongside industry pros Barbara Corcoran, Douglas Durst, Steven Roth and Larry Silverstein.

“There’s a variety of top-notch, quality individuals on our board,” executive director Jack Nyman said, “and he speaks fluently with all of them.”

J

Michael Graves, 35 Broker, Douglas Elliman ichael Graves struck gold last year when he brokered one of the largest residential deals in the city: A $53 million full-floor apartment at Extell’s One57.

In November, Graves represented the buyer, identified only as Lapusny Inc., on the 6,240-square-foot, four-bedroom unit in the glassy tower. The transaction was the seventh largest residential deal in the city in 2014, according to Jonathan Miller, president of appraisal firm Miller Samuel. Graves said closing the 80th-floor unit “was an exhilarating experience.”

Property Markets Group principal Elliott Joseph, whose firm developed Walker Tower with JDS, called Graves the “most persuasive broker I’ve ever met.”

“When it comes to negotiating a deal he’s beyond comparison,” Joseph said. “He’s without a doubt the best broker I’ve dealt with ever.”

Joseph uses Graves not only on the company’s projects like Walker Tower, Stella Tower and 10 Sullivan, but also as his own personal broker.

Graves — who has appeared on several episodes of the reality

M

46 April 2015 www.TheRealDeal.com

TV series “Selling New York” — grew up in a real estate family.

His father was a hotel developer in the Midwest, and Graves said he did everything from bell hopping to front-office management and marketing.

A classical guitarist and composer whose work has been performed at Carnegie Hall and Lincoln Center, Graves got his start in real estate in 2009 at the brokerage Core.

He was a top producer at the firm, brokering more than $150 million in deals his first three years in the business, including setting several per-square-foot price records.

But the most surprising record may be his first sale, a $5.9 million condo at 240 Park Avenue South. The $2,532-per-squarefoot purchase was a record at the time for Park Avenue South.

But it might never have happened if he hadn’t taken a novel approach to showing the run-down penthouse, using a projector to display architectural renderings of what the apartment could look like with alterations.

“It kind of set the tone for the rest of my career,” he said. “I think it kind of helped me get off the ground.”

Michael Graves closed a $53 million penthouse at One57 last year.

Continued on page 132

www.TheRealDeal.com January 2014 35 PHOTOGRAPH OF KORNMEIER BY CHANCE YEH; PHOTOGRAPH OF SCHUSTER BY MAX DWORKIN; PHOTOGRAPH OF GRAVES

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RESIDENTIAL

WHEN WILL THE BOOM BUST?

Economists say this upswing is on more solid footing than the last two, but that could change in a flash

BY E.B. SOLOMONT he word “boom” may conjure up images of skyrocketing prices and massive amounts of construction — at least when discussed in real estate circles.

But the truth is that not all market booms (or busts for that matter) are created equal.

This month, The Real Deal combed through statistics from the past three decades and talked to market veterans to tease out details of previous booms in Manhattan’s residential market, all with an eye toward predicting how high the current market can rise and what factors could lead to its downfall.

What we discovered is that while there is much discussion about prices getting too high for both residential properties and development sites, economists said this boom is being built on a more solid foundation than past booms.

To be sure, there has been some price softening recently in the higher-end of the market, giving both developers and brokers pause, but lenders who got burned in the last downturn have helped keep the market in check.

During the market run-ups in the 1980s, 1990s and the early aughts, prices shot up higher and faster. In addition, there were even more new residential units added to the market.

Of course, hindsight is always 20-20, and predicting what will lead to the next bust is easier said than done. This time around, for example, there’s concern about artificially low interest rates, the record prices developers are paying

T

for land and the unprecedented emphasis on building to the luxury market.

The question is when will those issues, or other unforeseen factors, prompt the market to take a turn for the worse.

“Will it end? One hundred percent,” said Noah Rosenblatt, founder of real estate analytics firm Urban Digs. “But nobody knows when.”

Room for (price) growth While much has been made about how much prices jumped in the last few years, today’s price gains actually pale in comparison on a percentage basis to the increases seen in prior booms.

A look back shows that the boom of the 1990s saw prices

“In the context of prior booms, it feels like we’re still in the early stages,” said Jonathan Miller, Miller Samuel’s president.

According to listings website StreetEasy, Manhattan’s median prices have been steadily climbing for 27 consecutive months, the second-longest rise since 2003.

Prices have been rising slowly, said Alan Lightfeldt, StreetEasy’s data scientist, “but that’s in line with what we believe is a healthy market.”

He said the opposite was true in 2006 and 2007, when there were 19 months of steep price gains, followed by the market crash.

In addition, there are different catalysts driving the current price growth compared to past booms.

As Miller pointed out, prices in 2004 were driven by “fast and loose credit.” At that time, inventory levels were rising rapidly, as homeowners were rushing en masse to sell their properties and cash out at the top of the market.

“There was a panic,” Miller said.

“People didn’t want to be left behind.”

Now, prices are rising for the opposite reason. “People can’t sell their homes because they have low equity and as a result, there’s an inventory shortage,”

TRD combed through statistics from the past three decades to tease out details of previous booms in Manhattan’s residential market, all with an eye toward predicting what factors could lead to a downfall.

50 April 2015 www.TheRealDeal.com

rise by about 84 percent, and they jumped a staggering 116 percent during the boom of the early aughts, according to real estate appraisal firm Miller Samuel. This time around, prices have only increased by about 19 percent since the first quarter of 2013, when they began trending upward. (Prices did start recovering in 2010, but significant increases didn’t come until later.)

Miller said.

That inventory shortage at least partially stems from today’s tighter lending standards. Those standards — which are a direct response to the lax financing that caused the last bust — not only make it more difficult for borrowers to secure loans, but also keep a lid on asking prices, which discourages homeowners from selling.

In new development, asking prices have increased

RESIDENTIAL more, but because many developers were forced to stop building during the recession, experts say there is still more demand than supply. The average new development price last year was $2.5 million, according to Corcoran Sunshine Marketing Group, more than 30 percent higher than the average price of $1.9 million in 2007.

Barbara Denham, an independent economist who has worked for several large commercial real estate firms in New York City, said she believes that prices have room to go higher than they did in the last cycle “given how sound the lending market has been.”

Brokers said the fact that prices are rising more slowly than they did in previous cycles is a good thing. “In previous cycles, I saw a steep rise, almost a straight line going up,” said Douglas Elliman broker Jacky Teplitzky. “In a market where prices go up so rapidly, the chances of those prices coming down in a drastic way are also quite high.”

An “L” shaped recovery The past few up markets came crashing down in response to global economic events.

Five years into the boom of the 1980s, for example, the 1987 stock market crash plunged the city into a deep recession. The dot-com crash in 2000 halted a subsequent up-cycle, a downturn that was exacerbated by the World Trade Center attacks on Sept. 11, 2001.

Most recently, the U.S. housing bubble that burst in late 2007 led to the collapse of Lehman Brothers and other investment banks in 2008, helping usher in a global financial crisis and setting off a multi-year real estate decline.

Given that each of the last three booms were halted by such unique circumstances, their duration bears little impact on how long today’s up-market will last, sources say.

How much did prices rise by during past booms?

1982 to 1987: 25% 1998 to 2001: 83.7% 2003 to 2008: 115.8% 2013 to present: 19.4% Source: Miller Samuel. Data is for Manhattan and includes all residential sales.

Urban Digs’ Rosenblatt said booms tend to mimic the equity markets. This boom, he said, will keep going “as long as stocks are doing what they’re doing.”

Still, the market’s personality during a bust, and its subsequent recovery, can hint at what’s to come.

For example, following the 1980s bust, the market experienced a “V-shaped” recovery — meaning that it dropped fast, but then bounced back quickly, mirroring the vertical shape of the letter V. “The longer [the bust] goes, the harder it will be to recover,” said David Frame, an assistant professor of real estate at Baruch College’s Zicklin School of Business.

“If it’s short … people can get through that,” Frame said, offering the example of someone who is renting an apartment but then gets laid off. “Maybe you can borrow some money or use savings. … If it starts going on for three or six months to a year, those resources tend to get used up.”

According to Frame, the current recovery has been “L-shaped” in the sense that the economy didn’t bounce back quite as fast.

The New York City real estate market, analysts recall, began to percolate around the end of 2010. That movement, Miller said, was prompted by buyers and sellers believing the Bush-era tax cuts were about to expire. Prices then “moved sideways” for several years, meaning they were

relatively flat, until 2012. In early 2013, Miller said, “People got off the fence and we started to see the mood change.”

Craig Lazzara, a senior director at the ratings agency Standard & Poor’s, said the slow and steady price increases since indicates that the growth is “sustainable rather than a bubble.”

“The rate of increases are still positive, but they’re going up at a decelerating rate,” Lazzara said. “At a certain level, I think it’s good.”

Absorbing supply While the rebound of the 1990s moved at about the same clip as the current rebound has, it was followed by a bust characterized by a massive amount of overdevelopment.

“Because of overbuilding and high conversion activity of the 1980s,” Miller said, “it literally took seven years for the oversupply to be absorbed.”

Today, there’s not the same level of concern about new units being absorbed, given the city’s inventory shortage.

“Other boom markets have seen a large amount of development that’s behind the surge in prices, but here, only now are we starting to see a decent amount of new development,” said Greg Heym, chief economist at Terra Holdings, the parent company of brokerages Brown Harris Stevens and Halstead Property. He said there’s currently a 4.4 month supply of apartments in Manhattan.

Last year, more than 2,400 new units hit the market and this year, nearly 6,000 new condos are set to come online, according to Corcoran Sunshine.

But that’s far less than the 8,000 units that launched in 2007. Plus, new development still accounts for just 10 percent of sales in Manhattan, according to Miller.

At the peak of the last boom in 2006, he said new development and newly converted residential units accounted for nearly 58 percent of sales.

Stephen Kliegerman, president of Halstead Property Development Marketing, noted that the same tighter lending standards that are affecting homebuyers are being applied to developers as well, resulting in a slower expansion of new development. “Lenders are more prudent than they had been in the past,” he said. Also, there’s less developable land.

According to Miller, new development market share could reach 20 percent, but he said it is unlikely new development market share will reach 2006 levels.

During the last cycle, developers flooded the market with studios, one- and two-bedrooms. “The units [developed today] are bigger,” he said.

In fact, the booms of the last three decades have each had distinct characteristics in regard to new development.

In the 1980s, for example, there was a massive frenzy among developers to convert rental apartments to coops. During that 10-year span, 3,000 rental buildings in Manhattan and more than 242,000 rental units were converted into co-ops, according to a 1998 New York Times report.

“Landlords were just cashing out,” said Donna Olshan, president of Olshan Realty, noting that landlords were offering tenants the opportunity to buy co-ops in the building at a steep discount. Olshan — who purchased her own rental apartment around that time for $28,000 and flipped it eight years later for $225,000 — said that this led to huge bump in the sales volume.

The condo boom in the early aughts, meanwhile, also ushered in the age of the amenity-laden apartment.

That boom started a market-share shift between co-ops and condos. Condos now make up 40 percent of the market, compared with 30 percent in 1989. Co-ops, which made up 70 percent of the market in 1989, now represent 60 percent of the market.

How long did prices rise during past booms?

1982 to 1987: 5+ years 1998 to 2001: 3+ years 2003 to 2008: 5 years 2013 to present: 2 years Source: Miller Samuel. Data is for Manhattan and includes all residential sales.

Nowadays, of course, new development is skewing toward larger and more expensive condos.

“New development and luxury [are] rising faster than the overall market,” said Miller. “It’s not a proxy for anything else; it’s more of a side effect of the last decade’s hangover.”

Leaning toward luxury As a whole, today’s market is far more dependent on luxury buyers than ever before.

Unlike the early aughts, when anyone could get a loan, stricter mortgage requirements this time around have given all-cash buyers a leg up in the market, and demand from wellheeled buyers is fueling the development of luxury condos.

That’s all well and good, unless that pool of buyers dries up.

Today, the average luxury pad is 4.3 times as expensive as the average Manhattan apartment, according to Miller. That gap has grown. For the past three decades, he said, the luxury market was three times the price of the rest of the market.

In fact, the luxury market has grown so rich that in the past decade, a new price category has emerged for apartments priced $10 million and up. In the 2014 fourth quarter alone,

Manhattan median sales prices YEAR

MEDIAN SALES PRICE

INCREASE YEAR OVER YEAR

1995

$235,000

n/a

1996

$257,000

9%

1997

$275,000

7%

1998

$275,000

0%

1999

$339,500

23%

2000

$450,000

33%

2001

$487,000

8%

2002

$500,000

3%

2003

$449,000

-10%

2004

$560,000

25%

2005

$669,750

20%

2006

$727,000

9%

2007

$825,000

13%

2008

$900,000

9%

2009

$795,000

-12%

2010

$803,907

1%

2011

$802,413

0%

2012

$830,000

3%

2013

$835,730

1%

2014

$900,000

8%

Source: StreetEasy. Data is for all Manhattan residential property types.

Continued on page 126

www.TheRealDeal.com April 2015 51

RESIDENTIAL

Disconnect at the very top A look at the fluctuating gap between listings and sales prices at the upper reaches of the market

BY E.B. SOLOMONT ith a handful of record sales in the past year, there’s no question Manhattan real estate has entered a new stratosphere. But even as

words, today’s closed sales are more an indication of the market two years ago.

For example, the $100.5 million One57 penthouse went into contract in February 2012 and closed in December 2014. Meanwhile, the $42 million penthouse at 18 Gramercy Park South went into contract in September 2012 and closed in August 2013.

Haber said the penthouse at 15 Central Park West that sold three years ago in December 2011 for $88 million would command north of $100 million today. “The market has dramatically gone up,” she said.

By that logic, the tide may be turning: This year’s top sale, as of mid-March, was billionaire Len Blavatnik’s $77 million co-op at 834 Fifth Avenue. That bested this year’s most expensive new listing, the Puck Building’s top penthouse, which is asking $66 million. However, there are pricier listings coming down the pike, including the $130 million penthouse at Zeckendorf Development’s 520 Park Avenue, the $150 million penthouse at the former Sony building at 550 Madison Avenue, and a possible $175 million listing at 220 Central Park South (see related story on page 54).

To be sure, there is a concentration of pricey listings at the top of the market. The top 25 sales in 2014 exceeded $1 billion, compared with $599.7 million in 2013 and $836.5

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asking prices at the very top of the market are shooting up, the city’s priciest closed sales have lagged by comparison.

Last year’s top sale — the record-breaking $100.5 million penthouse at Extell Development’s One57 — was eclipsed on the listings side by a $118 million three-unit combination unit at the Ritz-Carlton in Battery Park City. In 2013, there was a similar gap between the priciest sale of the year and the priciest listing. The $42 million penthouse sale at 18 Gramercy Park South was a stunning 58 percent less expensive than the $100 million penthouse listed at CitySpire.

Shaun Osher, CEO of the brokerage Core, said the spread is “typical in a market that’s moving upwards,” as owners and developers, especially at the highest echelon of the market, test the waters to see how high they can push prices. He pointed out that the majority of luxury new development units are selling at their asking prices.

In fact, Douglas Elliman’s Toni Haber said one reason for the disconnect between listing price and sales price is that some of the priciest pads that closed in 2014 and 2015 actually went into contract two or three years ago. In other

million in 2012, according to an analysis conducted by

The Real Deal of data from the listings website StreetEasy.

And last year’s top 25 sales all exceeded $30 million, a notable jump from 2013, when only nine of the most expensive sales reached that price.

Still, price chops are getting larger at the top of the market.

The Pierre Hotel’s penthouse, originally listed at $125 million, saw a 50 percent price chop when it was relisted this year for $63 million. Meanwhile, billionaire Steven Cohen, founder of hedge fund SAC Capital Advisors, slashed the price of his One Beacon Court pad to $82 million from $110 million.

A number of the priciest sales in the past few years also sold for less than their asking prices, albeit still at stratospheric amounts. Despite its record-breaking $100.5 million price, One57’s penthouse was originally asking $115 million, while a full-floor condo at the Sherry-Netherland fetched $70 million in 2014 — after asking $95 million.

Similarly, the penthouse at the Carlton House, at 21 East 61st Street, was initially priced at $65 million but sold for at a 20 percent discount of $52 million last year.

Andy Gerringer, managing director of the Marketing Directors, said only a select few properties warrant recordsetting numbers.

Big numbers “certainly will get you attention,” he said.

“But do you have a Plan B in case it doesn’t happen?” TRD

834 Fifth Ave., 1112A

293 Lafayette St., PH1

795 Fifth Ave., PH

15 Central Park West, PH20

150 West 56th St.

18 Gramercy Park South, PH17

$42 million

$77.5 million

$100.5 million 157 West 57th St., 90

$66 million

$118.5 million 10 West St.

$125 million

$48 million 16 East 69th St.

15 Central Park West, PH41B

1016 Madison Ave.

$40 million

$40 million 820 Fifth Ave., 12Fl

15 Central Park West, PH40B

14-16 East 67th St.

15 Central Park West, PH40B

15 East 64th St.

795 Fifth Ave., PH4143

4 East 75 St.

$88 million

$90 million $47.5 million

$49 million

$72 million

$80 million $50 million

$70 million

$53 million

$59 million 795 Fifth Ave., PHW

834 5th Ave., PH

795 Fifth Ave., PH1413

740 Park Ave., 17B

795 Fifth Ave., PH4143

$25 million

$44 million

$43.1 million 25 Columbus Circle, ST76

50 Central Park South, PH 33-34-35

$41.5 million

$70 million

$70 million

Sale

4 East 80th St.

Listing

$100 million

A year-by-year breakdown of Manhattan’s priciest listings vs. its priciest closed sales

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Data is from StreetEasy and UrbanDigs. The 2015 properties were the priciest for the year as of late last month. Priciest listings for each year refer only to new listings that hit the market that year.

52 April 2015 www.TheRealDeal.com

RESIDENTIAL

Penciling out NYC’s penthouses

Crunching the numbers on the profit margins at the city’s priciest new development condos

BY E.B. SOLOMONT ears before anyone called 57th Street “Billionaire’s Row,” developer Gary Barnett was gunning for a sales record at his Christian de Portzamparc-designed One57 in Midtown. In December, he got his wish, when his top penthouse sold for $100.5 million, setting a record for the most expensive apartment ever sold in Manhattan.

Today, that penthouse — which Barnett originally listed for $98.5 million and then hiked to $110 million — looks like it may hold the record spot for only a short while.

While developers have been attempting to hit new and higher markers for as long as they’ve been building, the latest crop of penthouses is moving New York City luxury real estate into another stratosphere.

“It’s not that prices rose to this level, but that a new housing category has been created,” said Jonathan Miller, president of real estate appraisal firm Miller Samuel.

The Zeckendorf brothers are asking $130 million at 520 Park Avenue, while the Chetrit Group is planning a $150 million unit at 550 Madison Avenue and Vornado Realty Trust could go as high as $175 million at its planned 220 Central Park South. In all, there are nearly a dozen existing or forthcoming units that will ask $100 million or more.

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But even with construction budgets north of $1 billion, developers are poised to reel in huge profits.

“The numbers that are being discussed today are on top of any projected profits that were initially priced into the pro formas,” said attorney Ed Mermelstein, who has represented foreign buyers in buildings including One57. “When the projects were purchased, there was nothing in the market even close to selling at $100 million, so the

“Developers today are facing extremely high land costs and so they are, a lot of the time, trying to put [high] prices on penthouses to make up the value they need to achieve,” said Robert Vecsler, executive vice president of Silverstein Properties, which is asking $60 million for a combined duplex penthouse at its under-construction 30 Park Place.

Sources said ultra-luxury projects cost about 10 percent more to build than

“When the projects were purchased, there was nothing in the market even close to selling at $100 million, so the numbers that are now being thrown around are just gravy.”

ED MERMELSTEIN, ATTORNEY numbers that are now being thrown around are just gravy.”

But the astronomical price tags do beg the question: At what point are developers breaking even with these projects? Also, how much wiggle room is there for discounts if the market starts falling?

your standard, multi-million-dollar condominium. Developers typically recoup their expenses and start to see a profit by selling condos at prices between $2,000 and $3,000 per square foot, which reflects the high cost of land and construction, as well as the price of top-shelf finishes, from imported

marble to exotic wood to silk wall coverings.

Hard costs like land and construction alone, which averaged $750 per square foot a year ago, now average $1,000 per square foot.

And super-tall buildings — such as Macklowe Properties’ 432 Park, which has a $95 million penthouse — come with additional engineering expenses like sound attenuation, high-speed elevators and wind turbines.

Yet the pricing in the ultra luxury market seems to have little relation to costs.

“The amount of work you’re doing for new construction will be a lot, regardless of [whether you price units] at $10,000 or $2,000 a foot. That’s why developers are all going for the big whale,” said Roy Kim, Extell’s former top design executive, who is now head of development at Compass.

“When Gary [Barnett] was building One57, if he followed the comp data sets for that area, there’s no way he’d come up with $10,000 per square foot for the project.”

And One57’s pricing has had a profound ripple effect.

“Trophy properties used to have to be an assemblage of a couple of apartments, created by the purchaser,” said Shaun Osher, founder and CEO of the brokerage Core.

“Now, you have developers who are creating trophy properties.”

ILLUSTRATION FOR THE REAL DEAL BY NOAH MCDONOUGH

54 April 2015 www.TheRealDeal.com

RESIDENTIAL Osher said the quality of those developments is also getting better, which is driving up prices.

That’s the case at Jared Kushner’s Puck Penthouses in Soho, where six penthouses feature luxe finishes like poured Terrazzo floors and $100,000 handmade La Cornue stoves.

Agent Nikki Field of Sotheby’s International Realty said Kushner spared no expense, even shelling out an astounding $10 million on change orders, such as increasing the thickness of the floor to 3.25 inches from 2.25 inches. Kushner Companies paid $19 million for the Puck Building in 1986 and is looking to sell out the condos there for a total of $204 million, according to a summary of the plan on the Attorney General’s website.

“It’s not because they’re foolish,” Field said. “They are appealing to the ultra highnet-worth purchaser.”

She said Kushner recently turned down a $60 million offer for the top penthouse and is holding out for the $66 million asking price, which is north of $9,000 per square foot. She said the closest comparable sale downtown was Walker Tower’s penthouse, which sold last year for nearly $51 million, or upwards of $8,400 per square foot.

Read on for a closer look at how three towers with stratospherically priced penthouses pencil out.

offering plan filed with the AG. “Similar to what we saw at 15 Central Park West a few years ago, where the prices there totally did not correlate to the market, 220 is that type of property,” Mermelstein said.

Vornado began assembling the site a decade ago, so it got in at a relatively low cost basis compared to what it would cost the firm to buy the land today.

In 2005, the REIT paid $132 million for a 20-story rental building, and then spent $40 million to buy out its rent-regulated tenants.

In 2012, Vornado applied for permits to demolish the old building and build a new tower, but ran into a stubborn obstacle when Extell refused to vacate a lease for the parking garage under the site. But in 2013, after sparring for more than a year, Extell agreed to sell the land and air rights at 225 West 58th Street to Vornado for $194 million.

While enduring the multi-year delay, Vornado’s project became more and more expensive. What started out as a $400 million project, according to the REIT’s 2010 annual report, is now pegged at $1 billion.

As of September, the REIT had invested more than $560 million into 220 Central Park South, including $456 million for the land and development rights and another $106 million in soft costs, according to regulatory filings.

Shortly after completing the assemblage, Vornado secured $1.1 billion in debt,

220 CENTRAL PARK SOUTH

including a $600 million loan from Bank of China and a $500 million mezzanine loan to cover development costs.

But the wait has had a major upside.

Vornado executives bided their time by watching the market, and increased prices at 220 Central Park South accordingly. (“We hear that the 1,000-foot tall, direct park-view apartment tower under construction on 57th Street is pricing at $6,500 per square foot.

Our 220 Central Park South site, just down the block, is better,” read Vornado’s 2011 annual report.)

Meanwhile, Vornado estimates that the project’s pièce de résistance, its Central Park-facing site, has tripled in value since the REIT acquired the property.

“The market has risen to the point where the delay was enormously to our benefit,” CFO Stephen Theriot said during a 2013 earnings conference call, in which he estimated the “raw site” is worth north of $1 billion. A more recent estimate, from 2015, pegs the value of the land for which Vornado paid $456 million at $1.2 billion.

“Our basis in our site is $1,000 a foot,” Theriot said. “So we think we have a remarkable profit in just the land.”

With a projected sellout of $2.4 billion, the building’s prices will average $7,374 per square foot. (Six of the building’s 118 units were not in the offering plan and are not part of that calculation.)

In an August report, analyst Alexander Goldfarb of investment banking firm Sandler O’Neill estimated the cost of 220 Central Park South at $3,000 per buildable square

Developer: Vornado Realty Trust Cost: $1.5 billion Projected sellout: $2.4 billion Average price (per square foot): $7,374 Penthouse: $150 million - $175 million 220 Central Park South, where a penthouse is expected to list for $150 million to $175 million.

Vornado Chairman and CEO Steven Roth

Fans of the Robert A.M. Stern-designed blockbuster 15 Central Park West see another legend-in-the-making at Vornado’s upcoming 220 Central Park South.

With 118 units, the limestone tower is projected to have a total sellout of $2.4 billion, including a penthouse that will ask between $150 million to $175 million, according to the recently approved condo

foot, and projected sale prices of roughly $8,000 per square foot. Adjusting for the taxes a REIT must pay, he estimated an aftertax profit of $1.2 billion.

“Even though you’re talking about big numbers, by the time they net it all out, they won’t make that much,” he maintained.

“There’s a huge amount that goes to taxes.”

At the same time, the market has become “quite frothy,” Goldfarb noted, which is why Vornado is willing to spend so much money on the development.

He added: “It will certainly be a showcase project.”

520 PARK AVENUE Developer: Zeckendorf Development Cost: $600 million+ Projected sellout: $1.2 billion Average price (per square foot): $6,742 Penthouse: $130 million 520 Park Avenue, where the penthouse is slated to list for $130 million.

close to 75 percent of the total cost. Based on that ratio, the project cost is roughly $600 million. But that doesn’t include the cost of land, which would add millions to the bottom line.

According to 520 Park’s offering plan, the 31-unit limestone tower will rise 51 stories, with 31 full-floor units starting at $27 million.

The total sellout is expected to be $1.2 billion, with prices averaging $6,742 per square foot.

If that’s achieved, the Zeckendorfs will be left with $600 million in gross profit.

The $130 million penthouse is a triplex that will measure 12,400 square feet and ask $10,483 per square foot.

Stolly said the building has a break-even price of $2,500 per square foot, meaning that the Zeckendorfs must charge buyers at least that in order to recoup their expenses. “They have a terrific land basis,” he said. “They’re going to make a tremendous amount of money.”

Like other luxury towers that are rising along Billionaire’s Row, 520 Park’s pricing is modeled after resales at 15 Central Park West, which on average go for $10,000 per square foot.

“I can’t tell you when the $13,000a square-foot [record] set on the 19th floor of 15 Central Park West gets broken,” William Lie Zeckendorf Jr. told Bloomberg View in 2013. But, he added, “A lot of stuff underneath it is being dragged up by it.

Everyone is using it as a benchmark.”

Apparently, even him.

550 MADISON AVENUE Dev.: Chetrit, Clipper Equity & partners Cost: $1.6 billion Projected sellout: $1.8 billion Units: 96 William Lie Zeckendorf Jr., left, and brother Arthur Zeckendorf.

Having left their imprimatur on Manhattan’s West Side with 15 Central Park West, brothers Arthur and William Lie Zeckendorf Jr. are now looking for 520 Park Avenue to leave a similar mark across town.

Like Vornado, the Zeckendorfs spent years piecing together the 178,000-squarefoot site, a hodgepodge of six parcels, including two that were owned by partners Eyal Ofer’s Global Holdings and Rafael and Ezra Nasser’s Park Sixty LLC. And like 220 Central Park South, the building is also designed by Stern.

In 2013, the developers finally completed the assemblage, when they bought air rights from Christ Church for more than $30 million.

In all, the land cost was “significantly less than market value” since the majority of it was acquired before prices shot up in 2013, said Dustin Stolly of commercial brokerage JLL, which arranged the Zeckendorfs’ $450 million construction loan from the U.K.-based Children’s Investment Fund in October. Stolly said the loan will cover

Average price (per square foot): $4,791 Penthouse: $150 million

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1 mill mi iilll l ion on. on on. $150 Joseph Chetrit leads the group that will convert the Sony Building to residential.

When electronic giant Sony put its headquarters at 550 Madison Avenue on the market in 2012, executives touted the building to potential buyers by playing up its tremendous “unlocked value.” With the Continued on page 134

www.TheRealDeal.com April 2015 55

Can Robert Durst beat the rap?

Lawyers discuss whether the RE scion’s Jinx ‘confession’ will make the case

BY TESS HOFMANN here it is, you’re caught.”

Thus began the muttering monologue Robert Durst recited as he washed his hands in the bathroom following taping for the HBO docu-series, “The Jinx: The Life and Deaths of Robert Durst.”

The words proved prescient, of course.

A day before the finale of the six-part series aired, the 71-year-old Durst was arrested in New Orleans on charges related to the 2000 murder of his friend, Susan Berman, in Los Angeles. Berman is believed to have had knowledge about the 1982 disappearance of Durst’s first wife, Kathleen.

One key question is whether Durst’s now infamous mutterings — “What the hell did I do?” he asked himself. “Killed them all, of course.” — will be admissible as evidence in court, given that Durst appeared to be unaware his microphone was live, and that the meaning of private mumblings isn’t as straightforward as an answer to a question.

But attorney Benjamin Brafman, who in the past represented Michael Jackson, Sean “Diddy”’ Combs and real estate mogul Charles Kushner, pointed out a more technical issue that may stand in the way: the statement refers to multiple murders.

“They may have difficulty getting a judge to admit it in any one specific trial, because it implies involvement in crimes that he may never have been charged with,” Brafman said. “If you admit it in the Berman case, you would have to redact it and take out the words ‘them all.’ If you remove the words ‘them all,’ it has no meaning whatsoever.”

Despite these challenges, attorneys who discussed the case with The Real Deal agreed that the utterance will likely be admitted — or that the argument against admission will be an “uphill climb,” according to Gerald Shargel, who got mafioso John Gotti acquitted in 1990 on charges of shooting a labor union official.

If the statement is admitted, the focus will shift to the context in which it was said.

Shargel believes that “The Jinx” and its creators Andrew Jarecki and Marc Smerling will play a central role in the trial.

“Jurors may be offended by the fact that the filmmakers played the role that they did… [and they] may find that the investigation was run in an underhanded way,” he said.

But the potential for distaste, Shargel predicted, won’t do significant damage to the prosecution’s case.

Anthony Falangetti, who worked in the Los Angeles District Attorney’s office for 14 years and has represented troubled actress Lindsay Lohan, said that if he were the defense attorney, he would skewer the series

“T

56 April 2015 www.TheRealDeal.com

KEY DURST DATES JANUARY 31, 1982 Robert Durst’s

2010 Jarecki and co-writer Marc

wife, Kathleen, a medical student, disappears in New York. Durst admits that they had a rocky relationship, but denies any involvement.

DECEMBER 23, 2000 Susan Berman, who became friends with Robert Durst in college at UCLA in the 1960s and acted as his spokesperson after Kathleen’s disappearance, is discovered murdered in her Beverly Hills, California, home.

OCTOBER 9, 2001 Robert Durst is arrested after police discover the dismembered body parts of his neighbor, Morris Black, in Galveston, Texas.

NOVEMBER 11, 2003 In a decision that shocked the legal world, Durst is acquitted of Black’s murder.

During the trial he claimed that he killed Black in self-defense and chopped up the body in a panic.

2010 Director Andrew Jarecki’s movie “All Good Things,” a fictionalized version of Durst’s story, is released, receiving less-than-stellar reviews.

Smerling reportedly conduct their first interview with Durst, thus setting in motion the HBO docu-series “The Jinx,” about his life.

FEBRUARY 8, 2015 With much anticipation in the real estate and legal worlds, “The Jinx” premieres on HBO. MARCH 14, 2015 Robert Durst is arrested in New Orleans in connection with Berman’s murder.

MARCH 15, 2015 The series finale of “The Jinx” airs and ends with Durst muttering the potentially incriminating phrase to himself “killed them all.”

MARCH 19, 2015 News reports surface about police examining connections between Durst and other cold cases, including the Dec. 10, 1971 disappearance of an 18-year-old college student named Lynne Schulze.

Schulze may have shopped that day in a health food store Robert Durst ran in Middlebury, Vermont.

MARCH 23, 2015 Durst is held without bail on weapons charges in Louisiana.

hile the charges that Robert Durst faces are very serious, some on social media are mining it for its dark humor.

One fake Instagram account, “@robertdurst” has played his arrest and subsequent events for laughs, posting photos of his “cellmate,” a rat named Leo, and likely prison meal with a comment requesting someone bring him a steak.

The spoof account also uses headlines about the case, supplementing them with “LOL” in the comments.

Also posted are a shot of his transport to jail, with the comment, “Transfers are always a good time,” and a picture of a cake reading “Free Bobby,” presumably with a file inside, that claimed to come from real estate investor Debrah Charatan, his wife.

W

as fictionalized and staged. That’s something Dick DeGuerin, the legendary Texas litigator who got Durst acquitted for the death of Morris Black in 2003, is already busy doing.

Falangetti said he would also question exactly how the recording came about, and whether Jarecki and his crew made a habit of keeping the tape rolling while Durst believed his microphone was off.

“How much other footage or moments are there that were never actually aired?” he asked. “Then the question is, ‘is this something that the producers and directors did during the course of the show, more times than we know about, because they were looking for something juicy and didn’t tell him?’ That’s how you develop the foundations to exclude this evidence as ill-gotten.”

Even if the evidence is not excluded, Falangetti said arguments like these could serve to discredit the filmmakers in the jury’s eyes.

Los Angeles police detectives told the Los Angeles Times that two handwriting experts linked Durst to a letter alerting authorities to a “cadaver” at Berman’s home. The link between this letter and Durst was first brought up on “The Jinx.”

Brafman said the letter will prove far more problematic for Durst than the recording, but that his defense will claim the connection is tenuous and the evidence could easily have been fabricated.

Jarecki and Smerling said in a statement that it was “not appropriate” for them to comment, given that they will likely be witnesses in the trial.

DeGuerin could argue in court that media attention helped contribute to Durst’s arrest, the same argument he made in appearances last month.

Media attention was a theme for Durst’s defense in the Black trial as well, with DeGuerin arguing back then that Jeanine Pirro, the Westchester County District Attorney at the time, drove Durst into hiding by vilifying him publicly.

But Brafman believes that this time, that argument is likely to fall flat, as Durst actively sought out that attention.

“A judge is not going to be particularly sympathetic about publicity that a defendant himself created, because he did not have to participate in this show,” Brafman said. “It was a terribly, terribly stupid thing for him to do, to agree to this interview.” TRD

When local, block-by-block real estate expertise meets unrivaled global reach, everything is possible.

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EAST END SUMMER PREVIEW

THE HAMPTONS’ RETAIL RESHUFFLING

A roundup of the new venues, projects and retail hot spots debuting this season

BY TESS HOFMANN he results of off-season reshuffling in Hamptons’ commercial real estate are starting to take shape. A number of new restaurants, hotels and other venues have already opened, while others will debut by the time weekenders start flooding in.

Town & Country’s director of commercial real estate, Hal Zwick, said there is not enough inventory to keep pace with the demand from new restaurateurs, hoteliers and others interested in renting space. As a result, he said, leasing activity, which was strong in 2013 and 2014, has started to slow a bit. But “slow” turnover on the Hamptons hospitality scene is a relative concept. Below are some of the new (and newly owned) establishments to watch this season.

T

Baron’s Cove Inn, Sag Harbor This Shelter Island Sound-facing, 67-room hotel is getting ready to reopen on Memorial Day after two years of extensive renovations by new owners Cape Advisors Group, the firm that developed the Mondrian Soho in Lower Manhattan in 2011. Cape Advisors

of downtown East Hampton, is replacing Nichol’s of East Hampton, a mainstay that shuttered in October following issues with structural defects and code violations on outdoor seating. While Lyons — who reportedly worked at Turtle Bay Crossing, the Meeting House and the East Hampton Grill — completed minor renovations, he said he’s holding back on more extensive changes because the owner, James Fischer, plans to rebuild the entire freestanding structure. Fischer’s family has owned the spot since the 1970s when it was the Quiet Clam.

Miami’s Momi Ramen is expanding to East Hampton.

Harbor Market and Kitchen, Sag Harbor

Momi Ramen Chef Jeffrey Z. Chen Baron’s Cove inn, Sag Harbor

Chef Paul Del Favero and his Spanish business manager-wife, Susana, picked up this spot, the former site of Espresso Italian Market, for $1.6 million. A unique property occupying a corner of a residential neighborhood, it includes 1,500 square feet of commercial space and an attached 2,200-square-foot house on a lot that cannot be subdivided, according to Town & Country’s Zwick, who brokered the transaction. The couple is planning to open a European-style rustic café

There is not enough inventory to keep pace with the interest from new restaurateurs, hoteliers and others seeking to rent space. bought this Sag Harbor property in 2013.

Room rates start at $299 per night, and reach $799 for a double-height loft with a private deck. The 85-seat restaurant will be headed by chef Matty Boudreau, known for the popular Vine Street Café on Shelter Island.

This marks Cape Advisors’ first hospitality play in the Hamptons, but the company is also behind the high-profile $40 million Bulova Watchcase renovation in Sag Harbor, which includes 64 condos, townhouses and bungalows. That project hit the market in 2013. In New Jersey, it owns several historic inns in Cape May, as well as a boutique hotel in Atlantic City called the Chelsea.

there late this month. Focused on local purveyors, humanely raised meat and seafood, the market will offer freshly prepared meals, as well as produce and pantry items.

Momi Ramen, East Hampton Ramen has finally made its way to the East End thanks to chef-owner Jeffrey Z. Chen, who opened his first Momi Ramen in Miami in 2012. Locals will be able to get

60 April 2015 www.TheRealDeal.com

Chef Paul Del Favero and wife Susana are launching Harbor Market in Sag Harbor.

their fix at this roadside eatery — located at 221 Pantigo Road off Route 27, just beyond downtown East Hampton — year round.

Chen purchased the 2,750-square-foot building from Bostwick’s Clambakes and Catering. Zwick represented both sides in the deal. The new restaurant took over the space in January and began renovations.

The opening date has yet to be announced.

Chef Winston Lyons

Le Charlot, Southampton The Hamptons outpost of the Upper East Side eatery offers classic French dishes in a traditional white-tablecloth setting at 36 Main Street in Southampton Village.

Brothers Thierry and Bruno Gelormini opened the location in November,

Winston’s Bar and Grill, East Hampton This new roadside eatery, owned by Jamaican-born chef Winston Lyons, will offer seafood, steak and Caribbean fare.

The restaurant, which is on Route 27 west

A Southampton outpost of the Upper East Side eatery Le Charlot opened in November.

Winston’s Bar and Grill will open in East Hampton this season.

Continued on page 124

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ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY STATING REPRESENTATIONS OF THE DEVELOPER. FOR CORRECT REPRESENTATIONS, MAKE REFERENCE TO THE DOCUMENTS REQUIRED BY SECTION 718.503, FLORIDA STATUTES, TO BE FURNISHED BY A DEVELOPER TO A BUYER OR LESSEE. All artist’s or architectural renderings, sketches, graphic materials and photos depicted or otherwise described herein are proposed and conceptual only, and are based upon preliminary development plans, which are subject to change. This is not an offering in any state in which registration is required but in which registration requirements have not yet been met. THIS IS NOT AN OFFER FOR CONTRACT OR SALE IN THE STATES OF NY, NJ OR MASS.

BY THE SEA

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Rent can boost credit scores With rent-collection firms now reporting payments, tenants may see their credit scores improve

BY KENNETH R. HARNEY t’s the great credit divide in American housing: Those who buy a home and pay the mortgage on time typically see benefits in their credit scores.

Those who rent an apartment and pay the landlord on time every month get no boost to their score. Zip. Since most landlords aren’t set up or approved to report rent payments to the national credit bureaus, their tenants’ credit scores often suffer as a direct result.

All this has huge implications for renters who hope one day to buy. To qualify for a mortgage, they’ll need good credit scores. Young, first-time buyers are especially vulnerable. They often have “thin” credit files with few accounts and would greatly benefit by having their rent histories included in credit reports and factored into their scores. Without a major positive such as rent payments in their files, a missed payment on a credit card or auto loan could have significant negative effects on their credit scores.

But here’s some good news: Growing numbers of landlords are now reporting rent payments to the credit-reporting bureaus with the help of high-tech

I

residents in all score brackets saw an average gain of 9 points. The scores were computed using the VantageScore model, which competes with FICO scores and uses a similar 300 to 850 scoring scale, with high scores indicating low risk of nonpayment.

Experian, the first major credit bureau to begin integrating rental payment records into credit files, also completed a large-scale study recently.

Using a sample of 20,000 tenants who live in government-subsidized apartment buildings, Experian found that 100 percent of unscoreable tenants became scoreable, and that 97 percent of them had scores in the “prime” (average 688) and “non-prime” (average 649) categories. Among tenants who had scores before the start of the research, fully 75 percent saw increases after the addition of positive rental information, typically 11 points or higher.

Think about what these two studies are really saying: Tenants often would score higher, sometimes

Growing numbers of landlords are now reporting rent payments to the credit bureaus with the help of high-tech intermediaries who set up electronic rent-collection systems. intermediaries who set up electronic rent-collection systems for tenants. One of these, RentTrack, says it already has coverage in thousands of rental buildings nationwide, with a total of 100,000-plus apartment units, and expects to be reporting rent payments for more than 1 million tenants within the year. Two others, ClearNow and PayYourRent, also report to one of the national bureaus, Experian, which includes the data in consumer credit files. RentTrack reports to both Experian and TransUnion.

Why does this matter? Two new studies illustrate what can happen when on-time rent payments are factored into consumers’ credit reports and scores.

RentTrack examined a sample of the tenants in its database and found that 100 percent of renters who previously were rated as “unscoreable,” meaning there wasn’t enough information in their credit files to evaluate, became scoreable once they had between two and six months of rental payments reported to the credit bureaus.

Tenants who had scores below 650 at the start of the sampling gained an average of 29 points with the inclusion of positive monthly payment data. Overall,

64 April 2015 www.TheRealDeal.com

significantly higher, if rent payments were reported to the national credit bureaus. Many deserve higher credit scores but don’t get them. Matt Briggs, CEO and founder of RentTrack, said for many tenants, their steady rent payments “may be the only major positive thing in their credit report,” so including them can be crucially important when lenders pull their scores.

Justin Yung, vice president of ClearNow, said that “for most [tenants] the rent is the largest payment they make per month and yet it doesn’t appear on their credit report,” unless their landlord has signed up with one of the electronic payment firms.

Is this something difficult or complicated?

Not really. Tenants, landlords and property managers can go to one of the three companies’ websites (RentTrack.com, ClearNow.com and PayYourRent.com), check out the procedures and request coverage. Costs to tenants are either minimal or zero, and the benefits to the landlord of having tenants pay rents electronically appear to be attractive.

Everybody benefits. So why not?

Kenneth Harney is a syndicated columnist.

4<C2?;:2;A /?623@ HUD to examine affordable housing plans Federal scrutiny of the mayor’s housing plans could bring efforts to expand affordable housing to a standstill. The U.S. Department of Housing and Urban Development is reviewing Mayor Bill de Blasio’s plans to determine whether the plans violate the 1964 Civil Rights Act, which bars developments receiving federal funds from discrimination based on race or national origin. In question is the city’s “community The mayor’s housing plan is under federal review. preference” provision, which allocates up to half of lottery-based openings in new residential developments with below-market rents to neighborhood residents, the Wall Street Journal reported. The primary issue is whether giving more spots to area residents skews the pool so that it does not reflect the city’s overall demographics. A New York University study, for instance, found that East New York’s population is 80 percent black and Latino, while these groups make up roughly half the city’s total population. Despite concerns about gentrification, some housing advocates maintain that the community preference reinforces patterns of segregation.

Modular housing plan may help developers A proposal from the mayor’s office may help developers looking to build modular structures, Crain’s reported. The plan would change zoning height restrictions to allow for taller modular projects in certain midand high-density areas. Because modular units are built off site and then stacked on top of each other on location, the floors are much thicker and buildings rise taller than traditionally constructed buildings with the same square footage. The reforms would allow modular developments to be slightly higher than current code, which would also allow higher ceiling heights. The proposal must go through a public-review process.

Brooklyn’s Pacific Park is using modular construction.

Rulings let bankrupt tenants keep below-market-rate apartments Tenants who file for bankruptcy will not lose their below-marketrate apartments when they’re current with the rent, thanks to recent opinions from the New York State Court of Appeals and the U.S. Court of Appeals for the Second Circuit in Manhattan. Bloomberg News reported the rulings ensure that individuals can no longer be evicted from their rent-controlled or rent-stabilized apartments if they file for bankruptcy but are still able to pay rent. The issue centered on whether a lease could be considered property in the bankruptcy case. The state court ruled in November that rent-stabilization rights are exempt because they are a form of public assistance, which a bankruptcy trustee can’t sell. The federal court likewise found that a below-market lease cannot be claimed by creditors.

Mayor, City Council relations cool Relations between the mayor and the City Council are stormy, particularly on issues of affordable housing, Crain’s reported. Speaker Melissa Mark-Viverito still has not signed off on the mayor’s affordable housing proposal to bring 7,250 new units to East New York, and some speculate that she may not have taken a stance.

In addition, de Blasio and the Council disagree on how the expansion of affordable units should proceed. For instance, Council member Jimmy Van Bramer continues to oppose the Sunnyside project in Queens, where de Blasio wants to build up to 11,250 new affordable units. The Council has Speaker Melissa Mark-Viverito also opposed the mayor’s plans to shut down the city’s horse-carriage industry. Disagreements about the Brooklyn Marine Terminal project similarly strained the mayor’s relationships with certain council members. Compiled by Andrea Cetra

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DEVELOPMENT

DIRTY MATH With condo prices failing to keep pace, industry experts worry land prices will soon hit “point of no returns”

BRONX

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$

$

$

BROOKLYN

STATEN ISLAND

QUEENS

$

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BY C. J. HUGHES

M

uch ink has been spilled about the skyrocketing price of New

York City land.

Judged against almost every real estate measure in the market, land prices are through the roof — and that’s even as values for co-ops, condos, rentals and office space are soaring.

But the question now is: How much higher can those prices go before buying land no longer makes sense for developers?

South of 96th Street in Manhattan, the buildable price per square foot of sold land jumped a massive 30 percent between 2013 and 2014 alone — and has continued to rise since, according to data compiled for The Real Deal by the commercial firm Cushman & Wakefield.

To put that in perspective, the average per-square-foot price jump for condos and co-ops was just 13 percent in Manhattan (with the vast majority of sales below 96th Street), according to the appraisal firm Miller Samuel.

Land values do track one key figure: The price developers are charging for new condos.

From 2013 to 2014, the price of new-construction units in Manhattan leapt 29 percent to an average of $1,851 per square foot, according to Miller Samuel. But even that rise could not match the 30 percent land-price jump.

This month, TRD broke down prices of developable land — all lots being marketed as development sites — by borough and then compared that to a slew of other real estate metrics (see charts). The goal was to determine how wide the growth margins 66 April 2015 www.TheRealDeal.com

are between land and everything else, and to pinpoint when, exactly, the growth is no longer sustainable.

Some real estate insiders are already sounding the alarm, noting that developers’ profit margins are being squeezed because they are shelling out so much money on land.

Call it the “point of no returns,” the moment developers can’t recoup their investment

“It’s really a question of how deep the luxury market is,” Hauspurg said.

In addition, banks are starting to be wary of runaway land prices, said Jordan Ray, a managing director with Mission Capital Advisors, which arranges financing for land deals.

“I can definitely tell you there is concern in the lending community,” he said. “There are

TRD stacked up prices for developable land by borough and then compared that to a slew of other metrics to pinpoint when the growth will no longer be sustainable. because the condos they would need to build could not sell for enough to cover their costs.

And those points — which in the current market are around $1,200 for land in Manhattan and $700 in Brooklyn — have already been crossed in some places, or are about to be.

“The land market hasn’t flattened out yet, but I don’t know how high it can go,” said Peter Hauspurg, the chairman and CEO of the commercial brokerage Eastern Consolidated.

At peak land prices, about the only thing that developers can turn a reliable profit on is super-high-end condos, so the top-out point for land largely depends on how high luxury condo prices can go.

concerns about the long-term sustainability of condo prices, which would in turn affect the land prices.”

Manhattan Too bad financing was so hard to come by in the wake of the recession. There were a lot land deals to be had back then.

During the dark days between 2009 and 2011, land prices fell 15 percent, to $322 per buildable square foot, according to Cushman’s data.

Today that price seems like child’s play.

Buoyed by a more favorable lending environment, average land prices in Manhattan, south of 96th Street, leapt a stunning 79 percent, to nearly $579 a foot between

2011 and 2014. That marks a 53 percent jump from 2009.

And those are just the averages — pricier deals dotted Manhattan last year, including a parking lot and adjacent store on Wooster Street in Soho that sold for $50.5 million, or about $1,375 a buildable foot, the 2014 record for a parcel where a developer is planning a new-construction residential project, according to Cushman’s data.

The buyer, KUB Capital, intends to construct a mixed-use apartment building, though its proposal awaits final city approvals.

Several other recent deals, like at 1865 Broadway on the Upper West Side, where AvalonBay Communities intends to put up apartments, clocked in at more than $1,100 a buildable foot.

During that 2011–2014 timespan, newdevelopment apartments, almost all of them condos, jumped 49 percent, to $1,851.

While that’s an impressive jump, it still trails the price of land, a troubling sign for developers.

The data also explains why developers are building almost entirely to the top 10 percent of the market. In that rarified air, the average sale price is around $2,500 per square foot, according to fourth quarter from the Corcoran Group.

And many of Manhattan’s super-luxury condos have, of course, asked for far more than the average. Units at 432 Park Avenue, the new 96-story tower at East 56th Street, for instance, have averaged more than $7,500 a foot, according to listings website StreetEasy.

DEVELOPMENT

$ 500

Manhattan land prices per sf

$578.67

$445.56

400 $377.46

300

$367.79 $325.11

$322.23

200 100 2009

2010

2011

2012

2013

2014

Year

Cushman & Wakefield. Data is for properties being marketed as development sites and prices are per buildable square foot. Only includes sites south of 96th Street.

The increase in Manhattan land prices between 2011 and 2014 vs. the increase in prices for newdevelopment units in the borough.

79% VS 49% Rise in land prices

Rise in prices for new residential units

Likewise, prices on closed units at One57, the glassy 90-story spire on nearby West 57th Street, have averaged about $7,000 a foot.

But sources say the high land prices are already creating problems.

“Margins are shrinking,” said Robert Von Ancken, a managing director of Newmark Grubb Knight Frank, the commercial brokerage, and a longtime appraiser.

Von Ancken noted that the $2,500-a-foot luxury average is a slight decrease from the third quarter. If that softening continues, he said, developers will start thinking twice about forging ahead with land purchases.

That’s because their margins don’t only factor in land; they depend on everything from construction costs to marketing campaigns.

If a unit sells for $2,500 a square foot, Von Ancken said the developer needs to subtract $900 for hard and soft costs, like construction and advertising campaigns,

said, noting the implied $3,000-square-foot price tag.

Besides, the absorption rate of fourbedroom apartments, he said, has recently started declining.

As for rental projects, unless developers can secure tax credits to offset costs, or lease the land instead of buying it — like the Related Companies’ did at its 312-unit Abington House in Hudson Yards — they might be out of luck.

To add salt to the wound, average rents actually declined to $52 a square foot in 2014 from $53 in 2012, according to Cushman’s data.

Meanwhile, with the exception of highprofile projects like Hudson Yards and Manhattan West, both on the Far West Side, office developments have been rare, too.

But there have been exceptions. Last year, SL Green Realty paid $41.1 million to acquire 719 Seventh Avenue, at West 48th Street, in Times Square. The REIT paid a

and about $375 for the cost of common spaces, like lobbies and hallways. Once that’s done, he said, a developer is left with about $1,200 for the land. So the margin, often 10 to 15 percent, is dangerously thin.

“There is just so much indetermination going forward,” Von Ancken said.

Yet $1,200 a foot for land could soon seem cheap.

According to Eastern Consolidated’s Hauspurg, a Lower Manhattan site will soon hit the market at $1,400 a foot. He said, however, he’s doubtful that there are enough luxury buyers left for that deal to pencil out.

“How many people are out there who can spend $6 million for 2,000 square feet?” he

record $1,462 per buildable square foot, Cushman said. But what really attracted the company, analysts told TRD, was not the 28,000-square-foot-building it can put up, but the Times Square signage that it can install there — and charge big-time for.

Brooklyn While buying developable land in Brooklyn is still a lot cheaper than it is in Manhattan, prices in Kings County are rising at a faster clip.

The price of land in Brooklyn jumped 96 percent during the five-year stretch from 2009 to 2014, to $183 a square foot from $93, according to Cushman’s data. The 36 percent rise between 2013 and 2014 to

$183 was the steepest gain of any borough between those years.

But developers paying through the nose for land could be in trouble soon. That’s because while new condo values are rising, they aren’t rising fast enough.

Between 2009 and 2014, new condo prices in Brooklyn jumped 67 percent, to $836 a foot from $502 a foot, Miller Samuel said. But they are a lot higher in prime neighborhoods, like Williamsburg.

Williamsburg’s bustling Bedford Avenue offers up some of the most eye-popping land deals in the borough.

At 169 North Seventh Street, for instance, a 5,000-square-foot parcel with a likely-tobe-demolished six-unit apartment building, is under contract for $3.4 million, or $680 a buildable square foot. That’s more than the average price of developable land in Manhattan.

If it closes at that price, it would likely set a Brooklyn record for developable land, said the broker marketing the property, Shaun Riney of the commercial firm Marcus & Millichap.

A developer who expects to reap a 10 percent profit at the most-prime Brooklyn sites appears to have very little wiggle room.

New luxury condos in Williamsburg today sell for about $1,200 a foot, according to StreetEasy. To clear a margin of about $120 a foot on that kind of project, a firm that spends $680 a foot on land is left with only $400 a square foot for hard and soft costs, less than half of what Von Ancken had estimated above.

$ 900

But Mission Capital’s Ray noted that developers don’t plan for today’s market; they are betting on what the economic landscape will be two years out. So, he said, $1,400 a foot for condos may be the benchmark. “I’m long on Williamsburg,” he said.

Even at lower land prices, which exist farther away from Williamsburg, don’t expect to see ground-up rentals or offices.

With development sites “above $300 or $350 a foot,” Riney said, “you have to go condo to make the numbers work.”

To be fair, $680 a foot for land is an outlier at this point. A nearby deal at 585 Manhattan Avenue in Greenpoint was more typical: The site, once home to the Warsaw Bakery, sold for $350 a buildable square foot last year, according to brokers.

And there are Brooklyn neighborhoods where land trades in the double digits. In East New York, it’s about $60 a square foot.

But once-far-flung areas are, literally, gaining ground fast. On the eastern edge of Bed-Stuy, near Flatbush, Riney is marketing a 37,000-square-foot dirt site for $110 a buildable foot, he said.

And in January, in Crown Heights, Adam America Real Estate Investment paid about $225 a foot for a gas station at 1525 Bedford Avenue, a value that factors in the amount of extra square footage that could be awarded by the city if the project creates some affordable housing.

In addition, Prospect-Lefferts Gardens saw the biggest Brooklyn jump of the last year. Land there climbed to about $150 a foot in 2014, from about $70 in 2013, said

Brooklyn new development residential prices per sf

800

$836 $794

700

$737 $640

600 $565

500

$502

2009

2010

2011

2012

2013

2014

Year

Source: Miller Samuel. Data is for all of Brooklyn.

The increase in Brooklyn land prices between 2009 and 2014 vs. the increase in prices for newdevelopment units in the borough.

96% VS 67% Rise in land prices

Rise in prices for new residential units

www.TheRealDeal.com April 2015 67

DEVELOPMENT David Junik, a partner with Pinnacle Realty of New York, a brokerage involved with land deals in Brooklyn.

Still, “what I am seeing now is that the market is beginning to stabilize,” Junik said.

“There is still a big demand, but there are definitely signs of caution.”

PPSF

Queens land prices

200

$137.17

Queens As prices in Brooklyn have shot up, both developers and buyers have flocked to Queens, particularly in the neighborhoods close to Manhattan along the East River.

That increased interest is, not surprisingly, reflected in land prices.

Average prices for development sites soared 104 percent between 2009 and 2014, to $137 a foot from $67, according to Cushman’s data, the highest increase in any borough during that time.

Between 2013 and 2014, prices jumped 17 percent.

But for developers, Queens might not be such a bargain anymore.

That 2014 land price of $137 is not too far below Brooklyn’s $183 from the same year. But there is more upside in Brooklyn.

Relatively speaking, sources noted, developers can’t get the same haul in Queens as they can in Brooklyn.

The average sale price of new-development condos in Queens averages around $900 a square foot in Long Island City, but goes as high as $1,200, said Junik.

In hot areas like Long Island City, which has seen a spate of new high-rise towers in recent years, especially in desirable micro-neighborhoods like Court Square, Queens Plaza and Hunters Point, prices for developable land now average $200 to $250 a foot, said Edward DiTomasso, a senior associate at Modern Spaces, a brokerage that opened a commercial division last summer to take advantage of an increasingly active investment sales market.

“The amount of space is really tightening,” he said.

DiTomasso is currently listing a mixeduse parcel in Court Square for $41.5 million, or $250 a buildable square foot, and is involved in the sale of a site in Astoria asking $141 a square foot.

The latter site, which sits near a 22-building housing project known as Astoria Houses, will be home to a new residential project, he said.

In Queens Plaza, along Jackson Avenue, meanwhile, Tishman Speyer Properties has planned a massive three-tower project, which will include 1,800 apartments and will reportedly cost $875 million to build.

Based on the reported size of the project and the $221 million price tag recorded with the city, Tishman appears to have paid about $160 per buildable square foot for the property.

Tishman is also hoping to get a $200 million 421a tax break, but needs to pour the foundations by June 15 in order to qualify. That potential tax break is already creating controversy because the firm does 68 April 2015 www.TheRealDeal.com

100

$116.65 $96 $88.18 $86.22

50

$67.15

2009

2010

2011

2012

2013

2014

Year

Source: Cushman & Wakefield. Data is for properties being marketed as development sites and prices are per buildable square foot.

PPSF

Bronx land prices

50 40

$48.72 $44.74 $40.49

30 $33.52

$41.79

$38.90

Staten Island

20 10 2009

2010

2011

2012

2013

2014

Year

Source: Cushman & Wakefield. Data is for properties being marketed as development sites and prices are per buildable square foot.

PPSF

Staten Island land prices

50 $45.54

40 $40.60

$43.98

$44.47 $37.62

30

$35.23

20 10 2009

2010

units would require ousting tenants, a laborious and often futile task.

In addition, numerous city-owned housing projects, which can’t be bulldozed, also discourage development, brokers added.

“The market isn’t strong enough for demolition and rebuilding,” said Charles Brophy, a residential broker with Douglas Elliman who has listings across the borough.

The average price per square foot of forsale properties in the borough was $201 in 2014, according to Miller Samuel, up from $166 in 2013.

But the South Bronx appears to be on the rise.

The Hunts Point Terminal Produce Market recently re-signed a lease through 2021, and grocery delivery service FreshDirect is building a 500,000-squarefoot headquarters that’s set to open in 2017. Both should mean more jobs, which will ultimately mean more housing.

“Housing follows jobs,” Brophy said

2011

2012

2013

2014

Year

Source: Staten Island Board of Realtors. Amounts are for pure land and are not per buildable square foot.

not have plans for any affordable units.

On Vernon Boulevard north of the Queensboro Bridge, meanwhile, prices have remained fairly flat, at about $100 a buildable foot, brokers say.

But when Cornell Tech opens its Roosevelt Island campus in 2017, this part of Long Island City, which is zoned for manufacturing now, should thrive, as tech start-ups set up camp nearby.

At that point, some of those factories may give way to office buildings, said Evan Daniel, a commercial agent with Modern Spaces who works in the area. “It won’t jump to $200, but you will see a gradual increase,” he said.

Bronx In the Bronx, home to the poorest congressional district in the country, land prices have been mostly flat for the last several years.

Unlike in other boroughs, land actually seems to be underperforming in the Bronx.

In fact, at nearly $49, the average buildable per-square-foot price in 2014 was only 8 percent higher than it was in 2009, when it logged in at nearly $45.

While there are plans afoot for some new developments, there are not a lot of comps for new condo projects, and many of the rentals that have gone up — like the Atlantic Development Group’s 419-unit Bruckner by the Bridge in Mott Haven — have income restrictions.

Yet the Bronx is undoubtedly becoming a hotter investment play (see related story on page 72). The Chetrit Group, for example, bought a $32 million Mott Haven site in December with plans to build six residential towers.

But brokers say there are challenges to building in the borough. Developing buildings that currently have rent-regulated

Bucking an upward trend in the rest of the city, land prices have actually softened in Staten Island, despite renewed interest from developers in and around the St. George area.

But housing prices have improved. That’s a good combination for developers looking to buy land low and sell homes high.

Between 2009 and 2014, land prices dropped 21 percent, to roughly $38 per square foot from nearly $46, according to data compiled by Richard Mohr, the controller at the Staten Island Board of Realtors. That was for the actual dirt (estimates for buildable prices were not available).

At the same time, though, the cost of new development has risen, for some property types. Between 2009 and 2013, newconstruction one- and two-family homes, for instance, jumped 6 percent, to $273 per foot.

But on the condo side, prices have slipped.

During that same time frame, the average sales price for new condos dropped a hefty 36 percent, to $211 a foot, Mohr said.

Still, the land-price decline is likely being skewed by several polluted brownfield sites.

And in more prime submarkets, like the St. George waterfront, the market is strong and getting stronger. Plans to build a 630-foot Ferris wheel, as well as New York City’s first outlet mall, Empire Outlets, are moving forward. Plus, soon to break ground on the other side of the ferry terminal is Lighthouse Point, a $200 million mixed-use project that will add 100 rentals, a hotel and stores.

About a mile south, the Homeport — a massive mixed-use conversion of a decommissioned Navy base on the Stapleton waterfront — promises to bring 900 rental apartments and stores, from Ironstate Development. Construction has started on the first of two buildings. Leasing starts this summer.

“The efforts to revive the waterfront used to be city initiatives,” said Mohr, a longtime Staten Island resident. “But this time, a lot of private money is coming in.” TRD

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BOOK REVIEW

Selling the seller Fredrik Eklund’s self-promotional book mixes fluff and substance

BY MARK MAURER Ortiz, but the book does offer a closer look Fredrik Eklund boast is usually not at his Elliman partner John Gomes, who complete without a ranking, record Eklund describes as “driven almost entirely by money.” Eklund writes that he and or accompanying superlative.

The “Million Dollar Listing New Gomes are 50/50 partners and best friends, York” star and Douglas Elliman power and in negotiations, they often adopt a broker leads the No. 1 real estate team in “good cop, bad cop” routine. Eklund focuses on bringing in new the U.S., closed $3.5 billion in sales in the business, while Gomes past decade and has specializes in showing 100 active listings at the apartments.

Many of the tips are any given time, by his count. And with his boilerplate advice for first book, “The Sell: self-promotion and The Secrets of Selling maintaining wellness.

Anything to Anyone,” Even Eklund, at least jokingly, grows bored he is on pace to break another record. at times. In one chapter He makes more alone, he writes in two than 55 references to different sections, “I’m his trademark “high tired of talking about kick” in its 300-plus this!” as a transition. pages — presumably To be fair, his career more than any other has not been without Fredrik Eklund’s “The Sell” is due out April 14. book. financial hardships. He “The Sell” is meant says he initially ran out as a flamboyant how-to guide for finding of money trying to get his companies, Eklund success in the sales world, not exclusively Stockholm New York and Eklund Oslo New the real estate industry.

York, off the ground in Sweden and Norway.

Eklund’s jubilant, assured persona and The offices, launched in 2009 and 2014 his eagerness to brand both himself and respectively, later became profitable. Before the book itself are apparent on each page. breaking into real estate, Eklund co-founded Whether readers find the book enjoyable or Humany.com, a Swedish software startup informative is largely dependent on wheth- that too ran out of money, though it still exists. er they like him. If not a fan, it would be He quit before moving to New York. harder to wade through the fluff (“I am that In reflecting on his childhood in duck. And you are too. We are all ducks.”) Sweden, he shows vulnerability with a and trite analogies to find valuable insights. story about cutting off his eyelashes with his He shares his take on social media, mom’s manicure scissors after schoolyard finding a signature look — getting a $275 bullies chided him for having “girl eyes.” haircut every three We then fast-forward weeks, for example — to pop diva Jennifer and what it takes to Lopez calling his eyes “beautiful” while he close a big deal.

One of his tricks showed her $20 million during a tough negotipenthouses. ation is to pretend that Even as Eklund wrote this book, he his mother just emailed him with plans to visit was selling it. He notes New York. He steps out throughout that the of the meeting for five book is already a bestminutes, then returns seller based on preto talk about his mother sales. Multiple and exand ask about the counplicit references to the terpart’s mother. Abruptly, he says, “Now, book itself throughout the chapters make let’s get back to the deal. Not a dollar above it practically a supporting character. $2 million!”

That unabashed promotional quality “By suddenly talking about your family tends to muffle Eklund’s attempts at and the other side’s family, your background sincerity. But it also provides first-hand or something else highly personal, you can proof that he is qualified to dole out go back to the deal and come in from a new career advice. As a result of his combined angle, with newly won control and energy,” triumphs at sales and marketing, Eklund Eklund writes. has amassed a sizable audience at his feet.

There is barely a mention of his The book is published by Gotham Books “MDLNY” co-stars Ryan Serhant and Luis and is due out April 14. TRD

A Adam Lichtin & Engel & Völkers NYC Adam’s deep passion for real estate began while working for his family’s real estate development company in North Carolina where he developed over $150 million in property.

Since moving to New York City Adam has worked successfully with residential sellers and buyers from $400,000-$17,000,000. He treats every client the same and every transaction like it is his own.

Adam is a perfect fit for our firm and we’re very pleased to welcome him.

Adam Lichtin, Licensed Real Estate Salesperson Engel & Völkers NYC 430 Park Avenue • 11th floor • New York • NY • 10022 +1 646-757-2538 adam.lichtin@evusa.com nyc.evusa.com

ADAM LICHTIN

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©2015 Engel & Völkers. All rights reserved. Each brokerage independently owned and operated. Engel & Völkers and its independent License Partners are Equal Opportunity Employers and fully support the principles of the Fair Housing Act.

72 April 2015 www.TheRealDeal.com

Eklund’s jubilant, assured persona and his eagerness to brand both himself and the book itself are apparent on each page.

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My Town Our Neighborhood. Your Home.

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Susan Green — “I have lived in the West Village for 27 years. It was certainly not what it is today - Bleeker Street was a bunch of mom and pop shops, the Meat Packing District was truly a meat packing district. Even though it has changed

dramatically, the quaintness of the neighborhood has been protected and there is a feel that is like none other. I know every nook and cranny; have been to every park, café, and shop. I love walking down the street and seeing familiar faces.”

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SoBro’s best bets

From Mott Haven to Hunts Point, the nabes attracting the most investment in the borough gh

BY KERRY MURTHA evelopers and investors are pouring an increasing amount of capital into commercial and residential real estate projects in the Bronx, looking beyond the portions of Brooklyn and Queens where prices have skyrocketed, to gamble on what some hope is the next outerborough hot spot.

With easy commutes to Manhattan, lower prices than other boroughs, and development sites ripe for the picking, sources said “frontier” neighborhoods like Mott Haven, Hunts Point and Port Morris are generating new interest at all levels from developers, as well as hoteliers, retailers and restaurateurs looking to tap new markets.

D

An example is the Chetrit Group’s $32 million purchase of 101 Lincoln Avenue in the South Bronx in December. The developer plans to combine the 133,000-square-foot property, now home to a warehouse, with two adjacent sites to build at least six residential towers. The block is within the boundaries of the Lower Grand Concourse Waterfront Project, a strip along the Harlem River that borough leaders hope will eventually house 4,000 residential units.

On the commercial side, Midtownbased financial services firm Perella Weinberg and Washington-based real estate investment firm Madison Marquette shelled out $114 million in September to purchase the BankNote Building in Hunts Midtown-based Perella Weinberg and Washington-based Madison Marquette paid $114 million in September for the BankNote Building in Hunts Point.

The borough recently saw its first two luxuryboutique hotels open in the Melrose neighborhood, the Opera House (pictured) and the Umbrella.

East Fordham Road

Grand Concourse

The Hub Water front project Mott Haven

THE SOUTH BRONX Hunts Point

in September. The two corner properties at 305-307 and 309-315 total more than 30,000 square feet and hold an additional 53,932 buildable square feet. Tenants of the existing two-story retail units include Planet Fitness, Metro PCS, the Vitamin Shoppe and Subway.

“The Bronx has much to offer,” said Greta Pryor, a broker with Charles Rutenberg, who has a nonprofit client negotiating for a 100,000-square-foot parcel near Yankee Stadium. “It’s diverse, land is available and you get a lot for your money.”

It’s clearly a bargain. With land prices ranging from $45 to $50 per buildable square foot, the Bronx is considerably cheaper than Manhattan, downtown Brooklyn and Queens neighborhoods like Long Island City, according to figures provided by Ariel. (See related story, page 66.) While prices haven’t budged much in the past five years, the numbers show that development interest is increasing.

Last year alone, dollar volume increased by 88 percent, to $130 million in the neighborhoods of Hunts Point, Melrose, Mott Haven, Morrisania and Tremont.

Over 40 transactions took place, comprised of 73 properties with 2 million buildable square feet.

“There are incentives to invest here,” added Hirschfield. “The land, infrastructure and added push from the city, state and local governments are enticing developers.”

Gentrification underway?

The dollar volume of investment sales in the Bronx last year rose above $2 billion, a 39 percent increase from 2013, and a 55 percent jump from 2012, according to Ariel Property Advisors. While still a tiny fraction of what was spent in other boroughs, the increases reflect momentum.

“Development has been driven by a number of large lots that offer a tremendous potential that you just don’t see in other parts of the city,” said Scot Hirschfield, Ariel vice president.

76 April 2015 www.TheRealDeal.com

Point, one of the most architecturally distinctive office properties in the Bronx.

The firm bought the building from Taconic Investment Partners, which paid $32.5 million for it in 2007 and shelled out an additional $37 million to refurbish the landmarked property, which had once turned out foreign currencies and other financial documents.

Retail development is also on the rise. A prime strip along East Fordham Road was sold to the Harbor Group for $34.6 million

Neighborhoods like the Hub, a major retail center located in the Melrose area in the heart of the South Bronx, where East 149th Street and Willis, Melrose and Third avenues converge, are reaping the benefits of the renewed interest.

“This area is the next frontier,” said Adelaide Polsinelli, a broker with Eastern Consolidated, which is handling leasing at at least two retail properties along the Third Avenue strip. “This is where all the action is.”

Bronx Bri Bricks, riic cks ks, the first privately financed condo in Mott Haven, sold out shortly after launching in July.

In a little more than a year, Old Navy, The Gap and Planet Fitness moved in, along with two new boutique hotels, the borough’s first.

In September, the 56-room Umbrella Hotel opened its doors at 681 Elton Street.

Developed by Bronxite Manny Chadha of AMG Elton, the luxury lodging boasts a rooftop bar and cigar lounge. Guests pay between $129 and $159 a night.

The Umbrella’s debut followed the 2013 opening of the Opera House Hotel. The converted century-old theater, where the Marx Brothers and Harry Houdini once performed, stands on East 149th Street and Bergen Avenue.

Next door to the Opera House Hotel, a large, new retail complex is targeted for the neighborhood. The Triangle Plaza Hub, a $35 million 88,000-square-foot building, is set to house a Fine Fare Supermarket, Metropolitan College and a Boston Market restaurant. The former municipal parking lot is being developed by Triangle Equities.

The developer has held several retail and office properties in the Bronx since the 1980s, but the Triangle Plaza is one of the largest. “With a population of 1.4 million, the demographics are strong in the area, and retail demand is reflected by the number of commercial corridors cropping up,” said Lester Petracca, president of Triangle Equities.

Affordable housing is also on the Hub’s horizon. La Central, a $345 million project consisting of 985 units, is being built by Continued on page 128

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THE COMPLETE OFFERING TERMS ARE IN AN OFFERING PLAN AVAILABLE FROM THE SPONSOR. FILE NO. CD13-0265. 303 DEVELOPMENT PARTNERS, LLC C/O CB DEVELOPERS, LLC, 161 CHRYSTIE STREET, 2ND FLOOR, NY NY 10002. EQUAL HOUSING OPPORTUNITY.

We Are Pleased To Welcome

ADRIENNE BERMAN To Our Firm

Adrienne Berman Licensed Associate Real Estate Broker 445 Park Avenue, New York, NY 10022 aberman@bhsusa.com t: 212-452-6212 c: 646-298-5017

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

We Are Pleased To Welcome

WILLLIAM ‘DOUG’ EICHMAN To Our Firm

Willliam ‘Doug’ Eichman Licensed Associate Real Estate Broker 445 Park Avenue, New York, NY 10022 deichman@bhsusa.com t: 212-452-6289 c: 917-741-9046

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

We Are Pleased To Welcome

ANISA M. SAROOP To Our Firm

Anisa M. Saroop Licensed Associate Real Estate Broker 445 Park Avenue, New York, NY 10022 asaroop@bhsusa.com t: 212-452-6283 c: 212-851-6971

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

We Are Pleased To Welcome

MARSI GARDINER To Our Firm

Marsi Gardiner Licensed Real Estate Salesperson 445 Park Avenue, New York, NY 10022 mgardiner@bhsusa.com t: 212-452-6282 c: 619-851-3844

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

Rosabianca suspended for mishandling client funds Court finds prominent real estate attorney refused to cooperate with an investigation

BY TESS HOFMANN uigi Rosabianca, a prominent real estate attorney who specializes in representing ultra-high-net foreign buyers, was suspended from practicing law last month after a Manhattan court found there was evidence to suggest he mishandled client funds and refused to cooperate with an investigation.

The decision to suspend Rosabianca, reached by the Appellate Division of the Supreme Court, First Department on March 12, came after four separate clients complained to the court’s Departmental Disciplinary Committee, which handles attorney misconduct, and Rosabianca failed to respond to any of the allegations.

Most recently, in March 2014, a client claimed that Rosabianca represented him in the sale of his apartment, but Rosabianca failed to promptly remit the sale proceeds and refused to provide accounting records for the disbursement.

The year before, a mortgage company claimed that Rosabianca took out a $1.76 million mortgage while acting as his own attorney, title closer, and agent, and that he failed to record the mortgage and secretly obtained a separate $500,000 mortgage, forcing the company into a subordinate mortgage position.

And in 2011, two complaints against Rosabianca claimed that clients had trouble getting escrow funds back

L

from him. In one case, a client’s $25,000 check bounced due to insufficient funds. In another, Rosabianca took longer than promised to return $8,350. According to the

Lawyer Luigi Rosabianca was suspended from practicing last month.

Departmental Disciplinary Committee, an investigation spurred by one of the complaints revealed that Rosabianca had intentionally converted and misappropriated the client’s funds on multiple occasions.

Rosabianca, founder of law firm Rosabianca & Associates, was featured in a New York magazine article

last summer about foreign buyers of Manhattan real estate.

“Sometimes they come in with wires,” Rosabianca told New York about his foreign clients. “Sometimes they come in with suitcases.”

The story, published June 29, 2014, described him as the founder of Wire International Realty, a brokerage that caters to foreign buyers. Last month, however, Rosabianca told The Real Deal that he is no longer affiliated with Wire, and has no management or ownership of the firm, though they previously shared office space.

He declined to comment on the court’s decision to suspend him from practicing law.

In an April 2014 press release from Wire, Rosabianca was identified as a principal and broker of record for the firm, and was quoted as saying, “Over the past few years, Wire International Realty has experienced great transactional success in the U.S. with Americans and foreign nationals alike.”

Neither Rosabianca & Associates nor Wire International Realty was specifically mentioned in the Appellate Division’s decision, which focused on Rosabianca as an individual attorney.

Representatives from the Departmental Disciplinary Committee were not available to comment.

Rosabianca is suspended until the committee’s proceedings are concluded, at which point it could potentially recommend to the court that he be disbarred. TRD

Shaking off a bad rap in Brooklyn Wave of new projects rising as the Fort Greene stretch of Myrtle Avenue gentrifies

BY CLAIRE MOSES cluster of development projects is set to transform Brooklyn’s Myrtle Avenue, which was once known as “Murder Avenue,” but is now undergoing rapid gentrification.

Myrtle Avenue — an eight-mile corridor that cuts through multiple neighborhoods in Brooklyn and Queens — is slated to get close to 1,200 new residential units in the coming years, divided among roughly 10 new projects, according to an estimate by the Myrtle Avenue Brooklyn Partnership. The wave of new development, including projects from John Catsimatidis’ Red Apple Group and Madison Realty Capital, will also add more than 50,000 square feet of retail space.

New retail is what the area desperately needs, according to Meredith Phillips Almeida, executive director of the Myrtle Avenue Business Improvement District. While there are a number of businesses in the area already, she said, residents want more food establishments, apparel stores and services such as gyms and Laundromats.

The BID is also working on a new 25,000-square-foot pedestrian plaza in the area.

An Associated supermarket will open in Madison Realty Capital’s 504 Myrtle Avenue, one of two rental buildings developed by Madison and the location of the former Pratt Station Post Office.

Madison, which also just bought a $45 million office building at nearby 93 Ryerson Street, close to the Brooklyn Navy Yard, is particularly keen on the area, the firm’s cofounder Josh Zegen said.

Catsimatidis is also encouraged by what he sees happening in the neighborhood. “It’s a win-win area,” Catsimatidis told The Real Deal. Red Apple has yet to sign a retail tenant at its project, but interest has been strong, he said.

A

80 April 2015 www.TheRealDeal.com

“Brooklyn has really come around,” he said. “All we have to do is bring back the Brooklyn Dodgers.”

Coming soon to the area: Four buildings from Red Apple Group Red Apple developed the Andrea at 218 Myrtle Avenue, the first of four buildings across from MetroTech Center, which will include residential units as well as a supermarket.

Dattner Architects designed the 95-unit building.

Catsimatidis is building three other buildings, at 81 Fleet Place, 86 Fleet Place and 180 Myrtle Avenue.

A 45-unit building at 134 Vanderbilt Avenue

Madison Realty Capital expects to complete the rental building at 490 Myrtle Avenue in the next few months.

134 Vanderbilt Avenue All Year Management is developing a 45-unit building at this location, which used to house a Gulf gas station. ODA Architecture’s Eran Chen is designing the project, which will have roughly 41,000 square feet of residential space.

490 and 504 Myrtle Avenue Madison Realty Capital is bringing more than 200 units to the area. Madison is planning to complete 490 Myrtle Avenue in the next couple of months and launch rentals there. The developer is also building a new tower at the site of the former Pratt Station Post Office at 504 Myrtle Avenue.

525 Myrtle Avenue This is the former location of Myrtle Car Service and will house a seven-story mixed use building with 22 units.

Manhasset Homes is the developer.

531 Myrtle Avenue Greystone is bringing a five-story mixed-use residential building to this former White Castle site. The building will include 27 luxury apartments as well as 6,000 square feet of retail space. www.TheRealDeal.com March 2010

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Holding out in Hudson Yards Widespread development on the Far West Side may prompt big offers, but some property owners have reasons to balk at selling

BY RICH BOCKMANN mall property owners and New York City developers have been facing off since that adage about location in real estate was coined. And every once in a while, those contests of wills turn into lasting stalemates.

Manhattan is dotted with famed and notso-famous locations where independent owners refused to sell. P.J. Clarke’s original restaurant at Third Avenue and 55th Street, and Smith & Wollensky a few blocks south at Third and 49th, are among the most celebrated, but there are any number of less remarkable properties where holdout owners refused the advances of deep-pocketed developers.

They may soon be joined by a new generation of holdouts spawned amid the recent land grab and development boom on the Far West Side.

“There are instances where the property owner doesn’t want to sell to the developer at any price. The property may be in the family for many generations and there is an emotional attachment,” said Jason Meister, broker and vice president at commercial brokerage Avison Young. There are also many cases where the property owner looks for a bigger payout than the developer is willing to offer, he added, and as a result, construction goes on around the holdout.

“What is most interesting about holdouts is how they gain their leverage. The battles over these holdouts have been set in many instances by zoning regulations that require large lot development,” Meister added. “As a result, small, well-located holdout lots become extremely valuable to a developer looking to maximize development.”

But still, some refuse to sell.

That was the case near Hudson Yards, with the Related Companies’ Abington House, the Robert A.M. Stern-designed, 320,000-squarefoot apartment tower that covers almost all of the entire eastern end of its block between the High Line and 10th Avenue.

Legacy holdouts

S

Almost all, that is, save for a roughly 8,000 square-foot walk-up at the corner of 29th Street and 10th Avenue. The property, with a retail storefront on street level and apartments above, has been owned for more than 40 years by members of the Lambros family.

Related’s partner on the project, Abington Properties, had since 1996 owned most of the parcels that made up the development site.

The two exceptions were the Lambros’ plot on the corner and another fronting about 50 feet along 10th Avenue in the middle of the block.

Steve Ross’s firm was able to buy the mid-block parcel in 2006 for $10 million.

But a spokesperson for Related said the Lambros family would not entertain a sale of their site, and by 2012 work had begun on the red-brick tower that would eventually rise 33 stories over its neighbor.

Members of the Lambros family could not be reached for comment.

82 April 2015 www.TheRealDeal.com

Long before owners got balky on the Far West Side, these buildings defied development going on around them:

The five-story walkup holdout on 29th Street and 10th Avenue, left, is dwarfed by the neighboring Abington House. Right: Scores, a 28th Street strip club, is sandwiched between a new rental building and two development sites that will soon house an 11-story mixed use building and Related’s Zaha Hadid-designed condo.

Today the small walk-up is oddly married to its neighbor. It is as tall as Abington House’s setback, and for a time, even hosted a sign advertising the rental office for Related’s property on its 29th Street facade.

designed condo.

Gans did not return calls seeking comment. Sources said he had been asking a premium for the property, which no developer appeared willing to meet.

There are many cases where the property owner looks for a bigger payout than the developer is willing to offer.

Hard-core holdout

Overplayed hand?

Just a block to the south, another property stands as a colorful reminder of West Chelsea’s not-too-distant history as one of Manhattan’s grittier neighborhoods.

In the middle of 28th Street, running block-through to 27th Street, Scores strip club sits squat and defiant between a new rental building and two buzzing construction sites. The property, at 526 West 28th Street, is owned by Scores owner Robert Gans.

To its immediate west, a team made up of Ekstein Development Partners, RD Management and L&M Development partners built a pair of mixed-use buildings on both ends of a block-through site. On the 28th Street side, the rental building, branded as +Art, climbs 13 stories in the air, rising well above its neighbor and sporting units that feature Sub-Zero appliances and rooftop cabanas.

On the 27th Street side stands a relatively modest five-story mixed-use apartment building, which the partners sold for $27.5 million in 2012. The new owner, Tavros Capital, was shopping a majority stake in the building earlier this year for $50 million.

To Scores’ immediate east, Harlan Berger’s Centaur Properties is building an 11-story, 96,000-square-foot mixed-use building on a block-through site the company bought in 2013 for $45 million. One lot closer to the High Line, Related is building its Zaha Hadid-

Further north in the greater Hudson Yards area, development is not as advanced as it is in West Chelsea, but holdouts are already starting to be conspicuous.

On West 38th Street between 10th and 11th avenues, for example, Weinberg Properties owns an oddly shaped lot wedged between the sunken Amtrak line running up the West Side, and a construction site. That site will soon be home to a 30-story rental building being developed by the Imperial Companies, a partnership between Michael Fascitelli, the ex-CEO of Vornado Realty Trust, and his former colleague at the REIT, Eric Birnbaum.

Weinberg bought the low-lying building, which runs block-through, in 1980 and rents it to a pair of auto body shops. A source said the company was approached by Imperial about selling, but turned down a substantial offer.

Both parties declined to comment.

That refusal may have been Weinberg’s last opportunity to get a true market offer for the property, which is subject to condemnation by the city to make way for the second leg of Hudson Park and Boulevard, the midblock greenway, which is planned to run up to Times Square. While this spur is not yet completely funded, concerns that the site could be targeted in coming years for a park could hamper prospects for a future sale. TRD

1) Macy’s ‘shopping bag’ – The Kaufman Organization owns a 5-story building at the corner of Broadway and 34th Street that Macy’s built its Herald Square flagship around in 1930. An amended 1948 lease running through 2021 shows Macy’s pays Kaufman $2.4 million per year to rent the property, which is wrapped in an ad for the store.

2) 30 Rock bookends – Two former townhouses hog the corners at either end of 30 Rockefeller Center along Sixth Avenue. Sol Goldman owned the building at the northern end of the block until 1970. The southern structure housed pubs until 1979, and is now home to an outpost of Magnolia Bakery.

3) P.J. Clarke’s – Tishman Realty built the 46-story skyscraper at 919 Third Avenue in the early 1970s, and the landmark eatery remains at the base of the building today at the corner of 56th Street.

4) Smith & Wollensky – The Durst Organization built the 29-story 805 Third Avenue in 1980, but this steakhouse still stands at the corner of 49th Street.

5) 567 Seventh Avenue – This four-story building is sandwiched in between a nearly 500,000 square foot office building and a 21-story tower near Times Square.

The building last changed hands in 2013 for about $7.5 million, and now houses a bakery.

Compiled by Rich Bockmann www.TheRealDeal.com January 2014 35 PHOTOS FOR THE REAL DEAL BY JUAN ZIELASKOWSKI

ALL BUILDING REPRESENTATIONS ARE ARTIST RENDERINGS. THE COMPLETE OFFERING TERMS ARE IN AN OFFERING PLANS AVAILABLE FROM SPONSOR. 15 HUBERT: FILE NO. CD14-0240, SPONSOR: TRIBECA M CORP, 97-77 QUEENS BLVD, REGO PARK, NY 11374 51 JAY: FILE NO. CD14-0159, SPONSOR: 201 WATER STREET LLC, 850 THIRD AVENUE NYC 10022 388 BRIDGE STREET: FILE NO. CD13-0272 SPONSOR: 384 BRIDGE STREET, LLC, 277 PARK AVE, NYC 10172 429 KENT AVE: FILE NO. CD13-0264 SPONSOR: 421 KENT DEVELOPMENT LLC, 150 EAST 52ND ST, NYC 10022. 19 PARK PL: FILE NO. CD130284 SPONSOR: ABN REALTY LLC, 420 MADISON AVE NYC 10017 498 WEST END AVE: FILE NO. CD130041 SPONSOR: 498 WEST END AVENUE LLC, 97-77 QUEENS BLVD, REGO PARK, NY 11374 540 WEST 49TH ST: FILE NO. CD130077 SPONSOR: FPG CLINTON ACQUISITION, LLC, 45 MAIN ST BROOKLYN, NY 11201 23 W 116TH ST: FILE NO. CD130101 SPONSOR: WEST 116 OWNERS LLC, 1865 PALMER AVE, LARCHMONT, NY 10538 21 WEST WATER ST: FILE NO. CD140057 SPONSOR: WATER STREET DEVELOPMENT AT SAG HARBOR LLC, 275 7TH AVE NYC 10001 THE ORLEANS: FILE NO. CD13-0269 SPONSOR: ORLEANS REALTY, L.L.C., 100 W 80TH ST NYC 10024 200 WATER: FILE NO. CD140293 SPONSOR: 200 WATER PROPERTY OWNER LLC, 520 MADISON AVE NYC 10022. EQUAL HOUSING OPPORTUNITY.

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Jerry Larkin, the senior vice president for leasing at Brookfield Properties.

DAY IN THE LIFE OF:

Jerry Larkin

The Brookfield Properties leasing bigwig on the ‘Titanic’ theme song, his bearded dragon lizard and being part of a posse of die-hard Rangers fans

erry Larkin oversees all leasing in New York and Boston for the mega-commercial landlord Brookfield Property Partners. The Toronto-based firm owns nearly 20 million square feet of office space in New York, including the four-building, 8.5 millionsquare-foot Brookfield Place office complex, where it has been on a leasing tear in the last 18 months. The complex, which had large blocks of empty space to fill when some of its biggest tenants shrunk or relocated, has signed some of the biggest and most valuable leases in the city. Meanwhile, the firm is leasing up the soon-to-rise 1 Manhattan West, the centerpiece of Brookfield’s planned 7 millionsquare-foot Manhattan West project on the Far West Side. Larkin, 55, started out as an analyst at Olympia & York, then moved into leasing representation at the Paramount Group and NatWest. He joined Brookfield in 1997 as vice president of leasing. The vibrant Oakland, N.J., resident and father of four (three of his kids are in college), is also a diehard Rangers fan and spends weekends in Greenville, New York, snowmobiling, ATVing and clearing fields on his tractor.

J

5:30 a.m. My cousin, who lives 20 minutes away, comes over and we work out to a tape called “10-Minute Torchers.” It’s a lot of squats, push-ups and asymmetrics.

7 a.m. I hop on a train to Hoboken and take the ferry across the river to Brookfield Place.

The last couple of weeks on the ferry have sort of been like “Titanic.” I have the [movie’s] theme song going through my head because of all the icebergs. For breakfast, I have a couple cups of coffee and a scone from Olive’s or Hudson Eats.

8 a.m. We have a team meeting to discuss 84 April 2015 www.TheRealDeal.com

what deals we’re working on, and strategize on how we’re going to lease space. We then meet with our marketing team to talk about promotional materials and events.

from CBRE, JLL, Cushman & Wakefield and Newmark Grubb Knight Frank — weekly or biweekly. We talk about rents, deals going on and who’s in the market [for office space].

10 a.m. I spend a lot of time on the phones

4 p.m. Part of the day is spent updating my

and reading documents or pushing the deals uphill to try to get them completed. The guys who work for me are doing the lion’s share of the space tours and the presentations. I’ll join in if it’s a good-sized tenant. I recently gave a tour to Susan MacGregor Scott at Citigroup.

When she was the head of real estate at Bank of America, she gave us early access to quite a bit of space [at Brookfield Place, then known as World Financial Center] and allowed us to start construction sooner.

fearless leaders, Ric Clark, Dennis Friedrich and Paul Schulman, on what’s going on, and getting their input and approvals if necessary.

12 p.m. Downtown, my go-to lunch spots are North End Grill and Sushi of Gari, where I usually get the “Tuna of Gari,” eight pieces of tuna, each prepared differently. In Midtown, I go to Koi at the Bryant Park Hotel or STK in the Grace Building, which we own. I take tenants, brokers or prospective tenants there. I recently had lunch with [JLL’s] Mac Horner, who represents some of our existing tenants.

1 p.m. Once or twice a day, I’m up to Midtown and back. I take a car service or the subway. Over the last year and a half, our main focus was Brookfield Place. Right now, our biggest project is Manhattan West. We’re seeking out smaller tenants — ones that would take one or two floors. Five Manhattan West attracts the TAMI [technology, advertising, media and information technology] tenants, and 1 Manhattan West will most likely attract traditional tenants.

We’re talking to everyone.

3 p.m. We also have agents on all our buildings, so we meet with those guys — teams

Larkin’s ferry from Hoboken plied through the icy Hudson this winter.

Sushi is a favorite lunch.

6 p.m. Brookfield has season tickets to the Rangers, and I get to 15 or 20 of their home games a year at Madison Square Garden. The seats are about 14 rows off the ice. We bring tenants, prospective tenants and brokers. The best thing about our seats is the wives and the girlfriends sit right behind us. When we bring anyone for the first time, they say, ‘Wow, that’s a lot of pretty girls behind you.’ I know all the hockey fans in the brokerage community — Peter Riguardi from JLL, Josh Kuriloff from C&W, Matt Van Buren from CBRE and Peter Shimkin from NGKF. A lot of these guys have their own tickets, so we’ll meet in between periods and grab a beer.

7:30 p.m. If I’m home after work, my wife usually makes a chicken dish. But my preferred dinner is peanut butter and jelly and a glass of milk.

A big Rangers fan, Larkin attends 15 to 20 games at Madison Square Garden each season.

The family pet is a bearded dragon lizard.

8 p.m. I watch any kind of hockey game if the Rangers aren’t playing. I’ll root for any team, except the Devils and the Islanders. We hang a 4-by-8-foot Rangers banner in the window over the entrance to my house. Also, we have a bearded dragon lizard [as a pet].

We feed it mealworms and water. We used to give it a salad, but it doesn’t like it anymore.

10:30 p.m. I check my emails before going to bed. Want me to tell you what I do with my wife? I kiss her goodnight.

By Mark Maurer

PHOTOGRAPH OF JERRY LARKIN FOR THE REAL DEAL BY TOBIAS TRUVILLION

NEIGHBORHOOD DIVE

THE NEXT RENAISSANCE? Development, and gentrification, ramps up in East Harlem

BY KERRY MURTHA ast Harlem, also called Spanish Harlem and El Barrio, has struggled over the years with just about every measurable quality-of-life measure. But things are changing for this neighborhood in the northeastern corner of Manhattan. While it’s still one of the

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TOP DEVELOPMENTS Developer Ian Bruce Eichner is building Harlem’s largest tower at 1800 Park Avenue.

The 32-story, 320-foot structure will include 682 residential units, 30 percent affordable, and 63,000 square feet of retail space on the first two floors. The $415 million building, whose renderings have been likened to a “sci-fi castle,” is being designed by ODA Architects.

Rendering of 1800 Park Avenue

poorest districts in the city, with a median income at least $20,000 lower than other city neighborhoods, it’s getting a financial shot in the arm as a wave of new development moves in.

The predominantly Latino community has lagged behind the revival of the rest of Harlem, but as prices rise in those

The Sigety family has placed 1532 Madison Avenue, a parking lot at the corner of East 104th Street, on the market for $15 million.

It’s being dubbed a 215 East 99th Street perfect home for a new tower that could possibly house a school, hospital, stores or highpriced residential condos. Denham Wolf Real Estate Services is marketing the property, which has 50,000 square feet of building potential.

After sitting abandoned for 15 years, a former public school building at 215 East 99th Street, between Second and Third avenues, is being converted by the nonprofit ArtSpace to 89 units of affordable live/work housing for artists and their families. The 19th century structure is five stories tall, with a steeply pitched

Signs of Change

Retail Scene

Trendy restaurants like those found in hipper neighborhoods such as Williamsburg and Bushwick are opening along Lexington Avenue between 98th and 116th streets, earning this area the mantle of El Barrio’s “restaurant row.” There’s the East Harlem Cafe at 1651 Lexington Avenue and the ABV Wine Bar, where patrons can sit at communal tables and enjoy quirky treats like foie gras fluffernutter.

The gentrification of retail along 125th Street, the main commercial thoroughfare, was touch-and-go for a while, but as more residential units are built, commercial developers are willing to invest in the neighborhood. Though the corridor is still dotted with nail salons and barbershops, change is on the horizon. On the border of East Harlem, at Lenox Avenue and 125th Street, developer Jeff Sutton is building a 39,000-square-foot Whole Foods, Burlington Coat Factory and American Eagle, scheduled for completion this year. At 5 West 125th Street, between Fifth and Lenox avenues, a new 30,000 -square- foot Bed Bath & Beyond is also opening later this year. Retail rents range from $40 for a second floor space to as much as $150 for ground floor digs.

areas, the revitalization trend is traveling east. Now East Harlem boasts several large-scale projects that are adding to the skyline, while beautification efforts are creating public spaces and spiffing up local retail corridors, where national retail chains like Whole Foods and the Burlington Coat Factory, as well as new boutique restaurants, are setting up shop.

roof. The exterior of the building includes copperclad cupolas and decorative terra cotta, much of which will be restored as part of the $52 million makeover.

Artists are expected to move in by year’s end.

HAP Investment Developers recently purchased 2211 Third Avenue for $13 million from Tahl Propp Equities and plans to build a 10 -story, 83,000-square-foot residential building with 93 rental apartments and 12,000 square feet of retail. The project is being designed by Karl Fischer Architects, and is slated for a 2016 completion.

Greystone Property Developers acquired four adjacent parcels of land on 125th and 126th streets, where it plans to develop 75 residential units

Demographic changes from 2000 to 2010: Population: 126,307, down 0.9% from 2010, up 1.7% from 2000 Median household income: $32,677, flat from 2010, up 53% since 2000 White Collar: 76% Blue Collar: 24%

Least Expensive Recent Sales

26 East 125th Street

165 East 104th Street, 5A

2,310-square-foot, three-story commercial building, sold for $7.05 million

505-square-foot, one-bedroom condo, sold for $240,000

2162 2nd Avenue

2132 2nd Avenue, 3E

6,200-square-foot, four-story mixed-use building, sold for $2.65 million

585-square-foot, one-bedroom condo, sold for $390,000

167 East 106th Street

319 East 105th Street, 4C

7,328-square-foot multi-family, sold for $2.37 million

751-square-foot, two-bedroom condo, sold for $421,000

86 April 2015 www.TheRealDeal.com

Rendering of 2211 Third Avenue

Price Trends

$500,000 Average price for a one-bedroom condo, up from $476,000 last year. That’s 45% below the $725,000 average for all of Manhattan.

5% Jump in average price for a two-bedroom condo, to $925,000, from $880,000 last year.

$1,700 A Commercial Broker’s Take “Critical mass change hasn’t yet taken place as much as change in small pockets.

But there are development opportunities, and the retail portion of East Harlem is beginning to take shape,” said Brad Cohen, senior director of retail leasing, Eastern Consolidated.

A Residential Broker’s Take Most expensive recent sales:

and 6,000 square feet of retail space. The developers purchased the properties at a bankruptcy court auction for $11.5 million last year. CEO Jeff Simpson said there will be an 80/20 mix of affordable housing and a slew of amenities. He said they will break ground in the next couple of months. Completion is scheduled for the beginning of 2017.

“We are going to see more luxury rental units in the future, as developers look to stretch out their investment opportunities in the area, as opposed to the quick buy and sell of condos,” said Makeba Lloyd of MNS Real Estate Impact.

Average monthly rental price for a onebedroom, up from $1,500 last year.

104% Gap between average one-bedroom rental in East Harlem and the $3,475 overall average in Manhattan.

$2,500 Average monthly rental price for a twobedroom, up from $2,200 last year.

On the Market

327 East 101st Street

327 East 101st Street, a 29,556-squarefoot multi-family rental, for $19.95 million 1775 Madison Avenue, #3B , a one-bedroom co-op, for $120,000 TRD

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NYC luxury market sees greatest price surge worldwide U.S. dominates list of top growth markets in annual Knight Frank Wealth Report

BY TESS HOFMANN alues in New York City’s luxury market rose more in the past year than values in competing global markets, according to the annual wealth report from global property consultancy Knight Frank.

The Prime International Residential Index, which measures the performance of prime real estate in the world’s top luxury cities and second-home markets, showed that the prices of New York luxury product

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pounds ($2.95 million) slowed due to a new “stamp duty,” or purchase tax, limiting the value increase there to just 5.1 percent.

Overall, U.S. luxury real estate had a stellar 2014, increasing in value almost 13 percent nationwide, while worldwide values rose 2 percent and top European cities saw just 2.5 percent growth.

Other top performers were Bali, Indonesia, and Istanbul, Turkey. In both markets, luxury prices increased 15 percent.

Overall, U.S. luxury real estate had a stellar 2014, increasing in value almost 13 percent nationwide, while worldwide values rose 2 percent. increased by 18.8 percent during 2014, topping the list of locations.

Of the 10 markets where luxury values appreciated the most, four are in the U.S.: Aspen ranked second, with 16 percent growth; San Francisco sixth, with 14.3 percent growth; and Los Angeles 10th, with 13 percent growth.

The report noted that the threat of a piedà-terre tax didn’t appear to discourage ultrahigh-net-worth individuals from buying second homes in New York, but price growth for London properties valued over 2 million

Jakarta, 2013’s top-ranked city, slipped to 12th place in 2014, with growth of 11.2 percent, which the report says is typical of the luxury market slowdown in many Asian cities last year.

Dubai, a frontrunner in 2013 with 17 percent growth, slowed to 0.3 percent growth, partially due to the Central Bank of the United Arab Emirates’ mortgage cap. Chinese government policies aimed at controlling values also held back growth in the biggest luxury markets, including Shanghai (0 percent), and Beijing (-0.5 percent). TRD

Top 20 Prime International Residential Index growth markets RANK

LOCATION

WORLD REGION

ANNUAL CHANGE

1

New York

North America

18.80%

2

Aspen, Colorado

North America

16%

3 (tie)

Bali, Indonesia

Asia

15%

3 (tie)

Istanbul

Middle East

15%

5

Abu Dhabi, UAE

Middle East

14.70%

6

San Francisco

North America

14.30%

7

Dublin

Europe

13.40%

8 (tie)

Cape Town, South Africa

Africa

13.20%

8 (tie)

Muscat, Oman

Middle East

13.20%

10

Los Angeles

North America

13%

11

Auckland, New Zealand

Australasia

12.10%

12

Jakarta, Indonesia

Asia

11.20%

13

Sydney

Australasia

11%

14

Tel Aviv, Israel

Middle East

10.30%

15

Bengaluru, India

Asia

10.10%

16

Amsterdam

Europe

10%

17

Miami

North America

9.80%

18

Berlin

Europe

9%

19 (tie)

Washington, D.C.

North America

8.70%

19 (tie)

Johannesburg

Africa

8.70%

Source: Knight Frank Wealth Report

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WH AT TH E Y ’ R E READING NOW

Real estate pros share picks for books about energizing careers, improving writing and being a young boss How do you foster creativity and wisdom?

To find out, The Real Deal asks leaders in the industry what they’re reading.

Garret Lepaw Sales and leasing director, Town Gramercy What are you reading right now or what did you finish most recently?

“The Millionaire Real Estate Agent,”

by Gary Keller. It’s a practical guide laying out the fundamental principles of how to take your real estate business to the next level.

What spurred you to read the book?

I initially read the book to jumpstart my real estate career. I only wish that someone had given me a copy when I first started in the business over a decade ago! I picked it up again to re-read when I started in my position with Town back in September.

Has anything in it stuck with you? Would you recommend it to others?

I gave a copy of the book to every agent in my office, and ... one to every new agent. I’m using it not only as a teaching guide for new agents to get them started down the path to success, but also as a tool for veteran agents to help them take their business to the next level and beyond. One of the most important principals that stuck with me is the concept that every agent’s real estate business is a real business and it must be treated accordingly. It sounds basic, yet we often forget that core simple truth. The other concept that really stuck with me, and I can’t remember who said this (perhaps it was “The Great One,” Wayne Gretzky) “Without a goal, you cannot score.” This book encourages the real estate professional to have the right mindset to set aggressive, yet attainable goals with a systematic approach to blow beyond what we think are our own limitations and limits.

Generally, I feel the quality of written correspondence has been on the decline in recent years, even in a business setting. A lot of the work-related emails I receive read like paragraph-long text messages! I heard an interview with the author on NPR. It got my attention, as a lot of the discussion resonated with me.

What has stuck with you? Would you recommend the book to others?

One of the main points is that all words should have meaning. I am definitely guilty of using unnecessary words when writing, and constantly tell myself to “get to the point already!” Many clients I correspond with have very busy schedules and appreciate communication, that while professional, is still direct. After reading “The Sense of Style,” I find myself re-reading emails before sending to make sure they say what they need to say, nothing more. The ability to craft descriptive, flowing sentences that read beautifully is another ‘lost art’ I’m working on, thanks to reading this book. It’s an intense read. I would recommend it to anyone who wants help to master the art of direct written communications.

Dana Moskowitz President, EVO Real Estate Group What are you reading right now?

“Becoming the Boss: New Rules for the Next Generation of Leaders,” by Lindsey Pollak.

What spurred you to read that book?

I thought it was an interesting topic and relevant to my role at EVO. Also, many of the decision makers and leaders of companies we deal with are facing generational shifts in their leadership roles.

Jodi Stasse Managing director of new developments Citi Habitats What did you finish most recently?

I just finished reading “The Sense of Style: The Thinking Person’s Guide to Writing in the 21st Century,” by Steven Pinker.

What spurred you to read that book?

90 April 2015 www.TheRealDeal.com

Has anything in it stuck with you?

I just started reading this, so I have a ways to go, but so far, there was an interesting topic about how to deal with comments and questions others make regarding your age/experience (I face this all the time) and the best ways to answer them. I am currently in the chapter about managing your personal brand and “filling your tank” with knowledge from other industries that will make you a more well-rounded leader.

Compiled by Andrea Cetra www.TheRealDeal.com March 2010

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n an effort to keep homes in parts of Manhattan that were increasingly being dominated by ofďŹ ce towers, the city approved a key zoning change 45 years ago this month.

The change allowed, for the ďŹ rst time, commercial skyscrapers to include residential space above the ofďŹ ce portion of the buildings.

The city Board of Estimate, which controlled budget and land-use decisions, signed off on the plan despite opposition from Manhattan Borough President Percy Sutton and several of his counterparts in other boroughs, who cited concerns that the move would increase commercial development at the expense of residential.

The new zoning regulation covered 58th Street to Mayor John Lindsay and Manhattan Lower Manhattan.

Borough President Percy Sutton Mayor John Lindsay supported the proposal, noting that under the previous rules, residential buildings could be demolished to create ofďŹ ce towers, whereas this rule would encourage developers to replace those residential units as high-ďŹ&#x201A;oor apartments.

I

1944: HOUSING VACANCY DROPS TO NEW LOW he vacancy rate for modern apartment units in Manhattan hit its lowest level ever as the nationâ&#x20AC;&#x2122;s economy boomed and the wave of soldiers returning home from World War II increased, 71 years ago this month.

Less than 1 percent of more than 320,000 recently built apartment units in Manhattan were vacant, according to a survey conducted by the Real Estate Board of New York. In more than 64,000 apartments in high-rise apartment buildings included in the survey, A â&#x20AC;&#x153;modernâ&#x20AC;? apartment building in 1942 only 619 units were available.

The survey results, which excluded â&#x20AC;&#x153;old lawâ&#x20AC;? tenements and what were then described as slum buildings, stood in stark contrast to the vacancy rate during the Depression. In 1932, the analysis found the vacancy rate topped 17.7 percent. And in 1942, the rate was 9.8 percent.

The lack of available apartments led the city to declare a housing emergency in 1946. The emergency status was never lifted, because the vacancy rate has remained below 5 percent.

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1913: WOOLWORTH BUILDINGS OPENS he Woolworth Building in Lower Manhattan opened as the worldâ&#x20AC;&#x2122;s tallest skyscraper, 102 years ago this month.

The neo-Gothic tower at 233 Broadway was designed by architect Cass Gilbert for the F. W. Woolworth Company, one of the pioneers of the ďŹ ve-and-dime store model. The 60-story skyscraper, dubbed â&#x20AC;&#x153;The Cathedral of Commerce,â&#x20AC;? cost $13.5 million and was paid for in cash.

President Woodrow Wilson helped inaugurate the tower on opening day, April 24, by pressing a button in Washington that turned on the interior lights and external ďŹ&#x201A;oodlights from afar.

At 792 feet tall, the skyscraper surpassed the Metropolitan Life Tower, at 1 Madison Avenue, as the tallest building in the world.

Early tenants in the building, in addition to Woolworth, included Irving Bank.

The Woolworth building remained the tallest in the world until the opening of 40 Wall Street in the Financial The Woolworth Building District in 1930.

It was the ďŹ rst ofďŹ ce tower to use a retail arcade in its base. That model was picked up by other iconic skyscrapers such as the Chrysler and Empire State buildings.

The tower was designated a city landmark in 1983. Today, its upper ďŹ&#x201A;oors are being converted to luxury residential apartments. Compiled by Adam Pincus

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92 April 2015 www.TheRealDeal.com

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Mini-revolution in Midtown

CetraRuddy tower will bring architectural distinction to drab neighborhood he designers over at CetraRuddy are nothing if not pluralistic.

Their latest project, an irregularly shaped tower at 242 West 53rd Street that looks like a mod pepper shaker draped in postmodern lace, is worlds apart from what is perhaps their best and best-known achievement to date, One Madison.

That building, completed in 2010, was initially reviled for the audacity with which it seemed to dominate Madison Square Park. By now, however, New Yorkers, many of whom did not initially appreciate the stern geometric rectitude of its mostly modernist idiom, have come around, and it is a welcome part of the Manhattan cityscape.

At 242 West 53rd Street, however, the same architectural firm has channeled a spirit that is more mod than modern, with elements of postmodern techno design thrown in for good measure, something rare, if not unprecedented, for the firm.

Developed by Algin Management, the new building will rise on the former home of the fabled Roseland Ballroom, which stood in the spot for more than half a century, and welcomed to its stage stars from Elvis Presley to Lady Gaga. The new arrival will reach about 60 stories, and will contain 426 one- and two-bedroom condo units, with two duplexes. The duplexes are among a trio of penthouses on the 58th floor. The plans also call for an 86-car garage and two swimming pools. There will be retail at street level and multiple outdoor terraces, including two that are tucked in on the third floor, between the base of the building and the point from which the tower springs upward.

CetraRuddy’s new tower will look very different from most of the other fare in this rather commercial part of Midtown.

It stands nestled between a setback tower on a base, a nothing of a building to its east, and a white-brick residence from the 1960s, a drab remnant of pallid midcentury modernism, with its predictable, relentlessly rectilinear masses. And while a few newer buildings in the area have gone through a variety of postmodern poses, if the truth be told, it has been some time since anything of architectural distinction arose in this little corner of New York. That is not the case, by any means, on 57th Street, but this stretch of Midtown has been plagued by mediocrity for generations.

Perhaps the best way to describe the new CetraRuddy building is that it looks like a Downtown project, the sort of thing that graces the High Line and the Meatpacking district, but not, until now, Midtown West.

Very reasonably, therefore, the new

T

94 April 2015 www.TheRealDeal.com

tower seems intent upon declaring its independence from the buildings that flank it, as well as from all the other drab and unimaginative midcentury structures that surround it. At every point, the designers at CetraRuddy seem intent upon denying and challenging the ingrained expectations of the pedestrian.

Obviously, such rebellion against

case, since the ground floor is flush with the adjoining buildings. But the next floor up, with its slightly loopy, post-industrial design, is cantilevered beyond the streetline in such a way as visually to muscle aside the two adjoining structures.

The curtain-walled base, about five stories tall, is surrounded by an emphatic white trim that looks like so much

John Cetra, the architect of 242 West 53rd Street, with his wife and partner, Nancy Ruddy.

modernism is hardly news these days: It has been going on for nearly 40 years.

Still, it is nice to remember how dull the building stock of Manhattan once was, and to take comfort in the thought that, whatever else might be said of it, our architecture is rarely dull these days.

The new building is intended to stand out, to draw attention to itself as it rebels against its terminally drab, midcentury neighbors. A tower on a base, it seems to make a point, at street level, of disrupting the street line. This is not actually the

stretched plastic. Indeed, the whole building gleefully revels in the impression that it is fashioned, perhaps some time in the ’70s, from plastic. The defining feature of the tower itself is its web or lattice or filigree of window surrounds, cast in the same shade of white that was used at the base, but now forming a striking pattern that resembles brickwork.

Yet even here, despite the initial appearance of regularity, one sees more and more subtle variations and mini-rebellions the longer one looks.

As the eye ascends, and especially at the summit, this apparent regularity becomes especially precarious. Part of the cause of this is the way in which the tower itself is irregularly formed, its four sides conceived as concavities that cause the building to bulge at the corners and slightly subside toward the center.

But even these pockets of subsidence are irregular, in that they can appear out of nowhere, at any time, on the surface of the building. Although the building has a base that is visually distinct from the rest of the building, the top of the structure intentionally denies the viewer any sense of finality or summation. It merely trails off into the ether.

From the renderings, the interiors appear to offer similarly mod details, such as the winnowing flow of the balcony above the lobby of the building, the fanshaped convolutions of the ceiling over the gym, and the liquescent walls of blue glass that surround the lower, indoor swimming pool.

Returning to One Madison, I was struck, when it started to rise, that its excellence was apparent to many New Yorkers: But the far bigger story was the possibility that celebrated Dutch architect Rem Koolhaas might be designing, for the same developer, a smaller building behind it. The Koolhaas building, of course, never came to pass. But it always seemed to me an injustice that One Madison was given short shrift, mainly because its architects were not imported stars, but merely local New York talent.

Yet CetraRuddy, in its phlegmatic way, has been designing excellent buildings for years, and while it is duly respected in the profession, it deserves more respect from that part of the public that cares about architecture. Over the past few years, it has enhanced the Manhattan skyline and streetscape with such tasteful additions as the new Lincoln Square Synagogue on Amsterdam Avenue, near 70th Street, with its walls of undulating glass, as well as the exciting cantilevered volumes at the Georgica, a pre-crash construction condo building, at 305 East 85th Street.

Even a simple intervention like the glass walls that surround the entrance to one of the buildings in Peter Cooper Village is a model of discretion and good taste.

While 242 West 53rd Street is not the most noisily inventive new building planned for Manhattan, in subtle, humble and tasteful ways, it seems on course to achieve that highest goal of so much recent New York architecture, the goal of achieving that definitive, authoritative oddity that we associate with an iconic building. TRD

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Q&A

Garden State, beyond the Gold Coast Prime New Jersey suburbs get boost as more Wall Streeters and Brooklynites flood in, while office market sees uptick

BY ANDREA CETRA rokers selling multimillion-dollar penthouses and Midtown Manhattan buildings aren’t the only game in town — or in the outskirts of town. The New Jersey suburbs are gaining ground.

In this month’s Q&A, The Real Deal talked to residential and commercial brokers about the prime suburban markets in New York City’s shadow.

On the residential side, that includes both Bergen County, where a slew of celebrities live in sprawling gated mansions, and Essex County, home to Wall Streeters and media types who have flocked to towns like Montclair, Maplewood, South Orange, Summit and Short Hills for their easy commutes to Penn Station.

Like New York City, the Garden State’s popular towns are starved for inventory and seeing well-priced homes move fast. But unlike the city, there is not enough new development to keep pace with demand.

As a result, “more people are looking at resale homes as knockdowns than ever before,” said Dennis McCormack, a broker with Prominent Properties Sotheby’s International Realty, who’s handled some of the priciest sales in Bergen County and currently has two

$12 million-plus Alpine listings.

“If a house is an older home on a good piece of land, buyers aren’t giving the house any credence; they look at it as a piece of property,” said McCormack, who noted that resale prices are flat over last year.

Similarly, in Essex County, buyers and developers are pouncing on any piece of land of a half an acre or more, shelling out as much as $3 million before putting a shovel in the ground. Nonetheless, buyers are still wary of overpaying for existing homes.

On the commercial front, the real estate game is more spread out, encompassing cities like Newark and Jersey City, as well as suburban office park locations dotting the metro area.

And while New Jersey recently suffered a loss when car giant Mercedes announced that it would flee to Georgia to save money, brokers insist the commercial market is going strong.

While commercial brokers noted that Manhattan-based companies are not likely to pack up to save rent money, Brooklyn companies and those located in other boroughs are increasingly making the leap.

For more on the biggest Jersey real estate players, the hottest areas and the predicted real estate run-up, we turn to our panel of experts.

RESIDENTIAL

What’s happening with appraisals and mortgages these days?

Appraisals are difficult, because the market is so strong [and they are surpassing the prices of closed deals]. As a result, sellers are asking [buyers] to remove their mortgage contingency, but also, at a minimum, to remove their appraisal contingency. By July or September, we’ll have comparables. Homes with close and everyone will see the high prices ... so the appraisals will have some data.

B

Elaine Pruzon Agent, Keller Williams—Short Hills How is overall sales activity doing in your area, and how much is that up or down by compared to each of the last few years?

I do Short Hills, Summit, Livingston and Maplewood. The market in those towns is spectacular and has been for several months. What I mean by that is that any home that is priced [well] in this market should have multiple bids. … There is a large demand and a small supply, probably because [many owners] opted not to put their houses on the market because of the bad winter.

What else is going on with residential prices in your area?

Prices have escalated. It’s definitely a seller’s market. It’s difficult to navigate right now for buyers. They can’t really afford to take their time, which is tough.

In NYC, the new development market gets tremendous interest. What is happening with new development in your area?

About 50 percent of my business is buyers from New York, specifically young people moving here from the city and looking for new construction. I can’t keep [new construction] on the market. Interestingly, there’s also been a little boom with older homes that in the last five years suffered from the new-construction takeover, especially in Short Hills. Builders are starting to build very modern. It’s not Frank Lloyd Wright modern — it’s chic modern. That is a game changer because the builders were lagging behind there.

96 April 2015 www.TheRealDeal.com

How is the luxury market holding up compared to the rest of the market?

It’s doing very well. It’s the combination of the [strong] stock market and very low interest rates. The luxury market in Short Hills is probably $2 million and up, and that market is thriving … People are also paying enormous amounts of money for land.

They’ll pay $3 million for a piece of land and they’ll build their own house on it. People are starting just to buy anything that’s an acre plus. Before, people would buy smaller properties. Unfortunately, there’s not much land around here. When something comes on, everybody fights for it.

Who are the most active buyers in your area these days?

If 50 percent of my clients come from New York, 40 percent are from Wall Street.

Wall Streeters and young couples coming in from New York are flooding into Short Hills, Summit, Maplewood and Livingston.

They are [attracted to the area] because the commute is good and they want space.

How quickly are properties selling now?

If priced properly, a property sells within the first 30 days.

What are the biggest challenges to selling homes right now?

I could tell you probably over $4 million in my neck of the woods in Short Hills is challenging, but tomorrow, I’ll [probably] get an offer on [one of those homes].

What’s the residential inventory like?

Inventory is low. That’s another thing fueling the markets. That’s probably going to turn around in the next 30 to 60 days. A lot of people are waiting until what they think is spring to put their house on the market. But there are so many buyers that [they] should do it earlier. It’s what I call standing alone. I like to list something when there’s no competition.

Dennis McCormack Broker, Prominent Properties Sotheby’s International Realty— Northern Bergen County How is residential sales activity doing in your area?

The market remains price sensitive, and I would say compared to last year, activity is flat.

What else is going on with residential prices in your area? Has the market fully recovered from the downturn?

[Prices are also] flat from last year. The market hasn’t made a full recovery. There are certain categories that have done better than others. For instance, land sales are very strong. They have outpaced the highs of 2007, but resales have not.

What’s happening with new development in your area?

There’s been very little speculation that has gone on within the high end, but new construction is always a buyer’s first choice.

The problem is we don’t have enough of it.

How is the luxury residential market holding up compared to the broader market?

The luxury market remains a price-

sensitive market, but if something is priced competitively, it sells. In that luxury market, typically the newer homes sell for more money than resales. If a home is renovated, that will sell before something that’s older.

Who are the most active buyers?

Foreign buyers remain more active buyers.

What are the biggest challenges to selling homes right now?

Selling a house with deferred maintenance.

If a home is not maintained properly, it is not easy to sell and it sells for a lot less.

What’s the residential inventory like and how does that compare to recent years?

In Northern New Jersey, new construction has not kept up with the demand. There aren’t as many builders that have speculated luxury homes as there have been in the past, so the inventory of new construction doesn’t exist. There is supply, but it’s not an abundance of supply.

What are the most surprising trends in today’s residential market?

There are more people looking at resale homes as knockdowns than ever before.

People building their own homes is the trend. So if a house is an older home on a good piece of land, buyers aren’t giving the house any credence, they look at it as a piece of property. Before, more people would renovate, but now more people are knocking down, because the larger buyers demand quality, and it’s not there. There is only so much patchwork you can do on an older house.

Which towns are performing best in your area?

The towns with the better schools. The buyers for the larger homes are coming from New York, and a big driving force is the high price of private schools. Thus, they www.TheRealDeal.com September 2014 83

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Q&A tend to go to towns with the better school systems, including Alpine, Tenafly, Closter and Ridgewood.

Victoria Carter Associate, Weichert Realty—Short Hills How is overall residential sales activity doing in your area?

I cover Millburn, Short Hills, Summit, Maplewood, South Orange, Montclair and Chatham. Sales there are up about 10 to 15 percent, maybe even 20 percent against last year.

What is going on with prices?

Prices are up — I would say between 5 to 7 percent. [In] my areas, where there are very urban and popular transition towns, I would say we are reaching 2005 prices.

They have fully recovered from the downturn in the lower price range.

How is the luxury market holding up?

The luxury market is holding up relatively well. It’s recovering slower than the under-$1 million market, but it is recovering. There are more buyers, particularly in affluent neighborhoods like Short Hills and Summit, where the median price points are higher.

Who are the most active buyers, and how does that differ from the recent past?

Most of them are young families coming from New York, Brooklyn, Jersey City and Hoboken. We do have some relocation clients and some expats coming back from Asia and Europe. We have a large number of foreign buyers.

There is also a big Asian and Indian population, particularly in Short Hills.

They are definitely Wall Streeters in Summit and Short Hills. Maplewood and Montclair usually attract more of the advertising, communications, television, and marketing industries.

How quickly are properties selling in your area?

Quickly. The average amount of time is running between 40 and 60 days. It was about 50 to 70 last year, so it’s maybe 20 percent faster. Anything that’s not priced right is sitting on the market. Even in the best of markets, buyers continue to be savvy, and they’re not interested in overpaying.

What are the most surprising trends you’re seeing today?

I think we are at the precipice of a run up in real estate values. The economics are favorable to everyone that was, I guess, born between 1980 and 1995. That generation is just stepping into the real estate market and starting to buy homes.

98 April 2015 www.TheRealDeal.com

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Richard Marchisio President/principal Lee & Associates—New Jersey What’s going on with commercial leasing activity these days and how does that compare to the last few years?

We have seen a rise in all sectors of commercial leasing in New Jersey over the past several years. Industrial leasing activity is clearly the “hands-on” favorite food group of all the sub-sectors of the market. Retail is perhaps the second most active sector, and suburban office space, because of less-than-stellar job growth, is lagging somewhat.

What are prices like for commercial leasing and sales these days?

Average asking rental rates are increasing across all sectors of commercial real estate, even within the suburban office market to a degree. Industrial sale prices are approaching record highs, in some cases trading in excess of $100 per square foot. Well-located office buildings are in demand as well. Retail centers with solid anchor tenants are seeing a rise in value, too.

Notwithstanding any form of commercial product that can be repurposed into residential multi-family, [which] is very hot — perhaps the hottest sector of all.

New Jersey has long competed with NYC to attract office and industrial tenants.

Has the state gained/lost an edge recently?

New Jersey has clearly gained an edge. The new [state-run] Grow NJ benefits programs are very attractive. New York may be finding it hard to compete. New Jersey has been ramping up its programs. We recently represented Wenner Bread Products, who will move the majority of their operations from Long Island to New Jersey in early summer. The company will create hundreds of new jobs, and was awarded a maximum benefit of $30 million over 10 years.

On the flip side, earlier this year Mercedes announced plans to relocate to Georgia.

Is New Jersey losing ground to states outside the metro area?

There will always be companies like Mercedes that can find a cheaper place to do business. In the Northeast, you can’t control that. We live in an expensive area to do business in. I wouldn’t say New Jersey is losing any ground. The world has changed.

With technology, physical location is not as critical as it used to be. But if you need to be in the metro area … you have to pay what the market supports.

What other big issues are affecting New Jersey commercial real estate right now?

We are land constrained. To develop new buildings in New Jersey, there are not many choices, unless you move out into the rural areas. So the choices are to develop brownfield sites, reposition existing buildings or tear down and start from scratch. There is too much red tape to go through just to put a shovel into the ground.

We know that both Newark and Jersey City have seen new office building development. What’s going on with office construction in those areas and others in metro New Jersey?

Suburban office product is suffering a bit.

Many companies that want to stay here are looking for amenities, such as commuter rail, restaurants, shopping and other conveniences within walking distance.

If you own a suburban office building or park, you need to try to create some of the amenities that one would have in a [central] setting, but it’s not so easy to do.

Are lenders/investors more or less willing to make debt and equity investments than they were a few years ago?

For financially sound borrowers, money is available. Interestingly, for industrial business purchasing buildings for their own use, [federal] loan programs are of great interest, and many of the name-brand banks are jumping into the game. For professional buyers of industrial real estate, equity is everywhere. There is more money out there to be had than there is product to invest in.

Who are the biggest commercial developers in the New Jersey metro area and are there any new players on the scene?

On the office front, Mack-Cali is a major player, and interestingly, it’s entered into the multi-family arena via its purchase of Roseland Properties. There have been mixed views on that play, but I think it was a smart move. When it comes to industrial, everyone is either here already, or wants to be. The largest players include Prologis and KTR, and then there are more local players like Russo Development in the Meadowlands area, and other firms like Sitex Group that have made significant entry into New Jersey.

Office rents have been steadily rising in NYC. Has New Jersey benefited from that?

It has always been amazing to me how difficult a decision it is for a NYC-based office tenant to make a move to New Jersey.

Office space prices in NYC are among the highest in the nation. But if you’re a Manhattan-based company paying X per square foot, and then the price goes up even higher, you just accept it as the cost of doing business. It takes extraordinary motivating factors for a company to move to New Jersey just to save money. Today, a cool work environment is as much a benefit to a new hire as health plans, wages, a 401(k) match and other monetary perks. When a new grad gets hired by

Google today, what do they talk about?

They talk about the free, gourmet food … the sushi! Even the horrific events of 9/11 did not open the floodgates to New Jersey.

A few companies came over, like American Express, but several years later, they went back. The office space moves that you see taking place along the waterfront in New Jersey are in part back-office operations, not company headquarters.

What sorts of companies are looking at commercial space in New Jersey right now?

Many Brooklyn-based industrial, because they are being priced out. Industrial companies in the boroughs, as opposed to office tenants in Manhattan, will make the move.

How does the influx of residents on New Jersey’s Gold Coast affect the region’s commercial market?

The influx is positive, for the economy, and for all sectors of commercial real estate, however, it must be kept in perspective.

Many of the people moving across the river to New Jersey to live are still going back across the river each day to work. It’s an affordability thing.

Dudley Ryan Senior vice president, CBRE—Newark What’s going on with commercial leasing activity in New Jersey, and how does that compare to the last few years?

The New Jersey commercial market continues to see vast improvement, but there continues to be strong competition for tenants both within the state and with [outside] markets. In early 2014, the state was still recovering from the downturn and the market was locked. The velocity in the market has been increasing quarter-to-quarter.

What factors are influencing the amount of commercial construction in New Jersey these days?

A combination of state incentives and local and national economic growth have been primary drivers of construction activity. We haven’t yet seen a “boom” in office building, but we’re getting closer to that point and can expect an influx in construction in the near term.

TRD recently reported that there are almost 9,000 residential units being built along New Jersey’s Gold Coast. How does the influx of residents affect the region’s commercial market?

The influx of residential development absolutely impacts the commercial sector. This development helps facilitate job creation in New Jersey, which has clear trickle-down benefits for commercial businesses. TRD www.TheRealDeal.com July 2013 65

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

SOUTH FLORIDA REPORT

Halpern launches sales JMH Development, the New York firm founded by Jason Halpern,

The five-story property is the first in Miami designed by Thomas Juul-Hansen. In New York, the

A rendering of Three Hundred Collins and Jason Halpern, right.

last month launched sales of Three Hundred Collins, a 19-unit luxury condo in Miami Beach’s South of Fifth neighborhood.

Danish designer-architect did the interiors of One57, and is the architect on 11 Beach Street in Tribeca, 505 West 19th Street and the Naftali

Group’s 210 West 77th Street.

The project will include one- to four-bedroom units, with four duplex condos and three penthouses, priced at $1.2 million to $9 million.

One Sotheby’s International Realty is marketing the project.

JMH paid $13 million for the site. Construction will begin by the end of this year, with expected delivery in mid-2017, Halpern said.

Porsche tower man caves Some developers advertise spa-

cious outdoor living spaces. Developer Gil Dezer is touting something a little more secluded — man caves.

Dezer’s 60-story Porsche Design Tower Miami will have 12,000 square feet on its third floor, housing six private garages, each able to fit four to nine cars.

The caves, intended for residents who want a museum experience for their vehicles — or a space to set up a bar and living room and smoke cigars, reflect a nationwide high-end garage/lounge construction trend.

“It’s for guys who love their cars — to have a place to put them and hang out with their friends,” said Dezer, president of Dezer Development.

Luxury amenities like balcony The Porsche Design plunge pools and Tower will house a robotic car six private garages. elevator have already brought attention to Porsche Design Tower.

The 132-unit tower in Sunny Isles Beach will be complete in June 2016.

LeFrak, Soffer team up Creating a South Florida partnership that unites two real estate dynasties, Richard LeFrak, chairman and CEO of LeFrak, and siblings Jeffrey Soffer and Jackie Soffer, principals of Turnberry Associates, entered into a joint venture to develop BisRichard LeFrak cayne Landing as a master planned community.

The 183-acre site, on Biscayne Boulevard in North Miami, is the largest undeveloped parcel of land east of the thoroughfare in South Florida. It is zoned for 4,390 residences and more than 1 million square feet of commercial space.

They did not disclose financial terms. Development costs could reach $1 billion.

At a recent real estate conference in Miami, LeFrak called the massive development, which adjoins Oleta River State Park, the “last great thing I have in me.”

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“It’s designed as a community for people who live here,” he said, “not for people who come for three weeks of the year.”

Biscayne Landing is a former landfill that languished for years after an attempt to develop the site fell apart early last decade.

Turnberry Associates has overseen and developed 785 acres of land over the last 50 years.

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

?2=<?A Auctions of properties in working class neighborhoods, like the house on the far right, are sparking concerns about gentrification in New Orleans.

Toluca Lake, California

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

Miley Cyrus’s childhood sixbedroom, seven-bath home is being listed for $5.995 million. The actress/ singer’s Tuscan-style home, where she spent most of her childhood years, is 8,700 square feet and rests on a property of roughly 1 acre.

NEW ORLEANS

A

n online auction for tax-adjudicated properties has generated concerns about gentrification in the Crescent City. The 1,700 properties put up for auction were turned over to the city for non-payment of taxes within the past five years, NOLA.com reported. The properties are a mix of abandoned homes and empty lots.

The majority are in the city’s working class neighborhoods, some of which were flooded after Hurricane Katrina.

While the auction was seen as a step in the right direction

CHICAGO The Willis Tower in Chicago

Blackstone Group is buying the nation’s second-tallest office building, Chicago’s Willis Tower. The private equity and real estate investment giant struck a deal valued at $1.3 billion for the 110-story tower, formerly known as the Sears tower, according to USA Today. That’s a record for an office tower outside of New York. The price works out to roughly $342 per square foot for the 3.8 million-square-foot building. The sellers include New York–based investors Joseph Chetrit and Joseph Moinian, along with American Landmark Properties of Illinois. The group paid a then-record $840 million for the tower in 2004. Blackstone plans to invest up to $150 million in the tower, according to the Wall Street Journal. The funds will go toward upgrading retail space and the tower’s observation deck, which pulled in about $25 million in admissions last year.

DALLAS Apartments under construction in Dallas

More new rental units are under construction in the Dallas–Fort Worth area than anywhere else in the 102 April 2015 www.TheRealDeal.com

for neighborhoods with blighted houses and overgrown vacant lots, critics say at least some of the properties should be reserved for affordable housing. Housing prices in the city have skyrocketed, increasing 58 percent over the rate of inflation since 2000. If all 1,700 properties were purchased and developed, it would increase the residential property market by 1.5 percent. Another 1,300 adjudicated properties could go up for auction after the city works out property records issues.

country. An industry report found that the apartment market contributes more than $25 billion per year to the local economy, the Dallas Morning News reported, including $2.4 billion from apartment development in 2013. The region’s job market is also getting a boost from an expanded rental industry, which supports 239,000 construction and operations-based jobs. The North Texas region, the report found, comes in fourth for having apartments with the highest economic total in the country. New York tops the list at $111.5 billion; Los Angeles at $63.1 billion; and Chicago at $29.8 billion.

LAS VEGAS A home for sale in Las Vegas

Price growth for existing homes in Las Vegas has slowed in the past few years, and industry pros are seeing a worrisome trend: Ignored, overpriced listings. The median sales price of single-family homes last month in Southern Nevada has climbed to $205,000, up 8 percent in the past year, the Las Vegas Sun reported. In February, 1,965 singlefamily homes sold, up 9.5 percent from January, but down 2 percent from the prior year. Meanwhile, the number of untouched listings was up 16 percent from February 2014, with 7,313 single-family homes for sale without offers.

Investors had flocked to the region after the economy crashed when homes were cheap, but have been pulling back in recent months. Now, brokers say, sellers who were emboldened by the price run-up are asking too much.

Compiled by Andrea Cetra

Seattle The 1,522-square-foot home where Kurt Cobain spent his teenage years is on the market for $400,000. Homes in the area normally list much lower, at around $100,000, but the singer’s home is, as the listing states, “a once in a lifetime opportunity to own a piece of rock history.”

Bel-Air, Los Angeles Mariah Carey and ex-husband Nick Cannon listed their 13,000-square-foot estate for $9 million. The threeacre, seven-bedroom and seven-fireplace property includes a home cinema, basketball court, putting green and pool with a mosaic with the letters “MCN” in the middle.

Atlanta The modest home where John Mayer lived before he was famous was listed for $469,000. The 1,224-squarefoot bungalow in the Peachtree Hills neighborhood, which dates to 1928, has a vintage fireplace, two bedrooms and one full bathroom. The guitarist occupied the digs when he was a doorman at a local club and worked at a Pier 1 store.

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Deal Sheet summary

The Deal Sheet, on pages 106 to 118, covers transactions from 2/14/15 through 3/13/15.

Please submit future deals to deals@therealdeal.com.

Overview Property sales

Financing

Leases (# of deals)

Leases (square feet)

Deals

46

Transactions

12

Office

58

Office

950,528,000

Dollars

$1,973,700,000

Aggregate value

$642,400,000

Retail

51

Retail

229,223,000

Total

109

Total

1,179,751,000

Sales By dollar volume (in millions)

By type

Development site Hotel

1

12

3

15

Development site

5 20

Mixed-use

.

3 8

Other Retail

Industrial

2

Office

.9 290

Retail

Multi-family

4

5

7

27

4

Office

106.6

Multi-family

Hotel

11.7

Mixed-use

702

.2

3

Office leases Office leases by industry Industry

Office leases sf, by industry Number of deals

Industry

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

Broker

Leased square feet

Advertising/Marketing

2

Advertising/Marketing

17,923

Savills Studley

144,597

Design

6

Design

38,468

CBRE

115,918

Fashion

3

Fashion

10,346

Cushman & Wakefield

85,749

Financial

10

Financial

271,264

Colliers International

78,000

Food & Beverage

1

Food & Beverage

33,560

Sivin

68,960

Media

6

Media

195,523

ABS Partners Real Estate

41,616

Other*

25

Other*

373,266

Cushman & Wakefield

34,408

Technology

5

Technology

10,178

Newmark Grubb Knight Frank

22,386

M.C. O’Brien Inc.

22,180

JLL

20,000

Retail leases Top tenant reps for retail leasing, by sf

Retail leases by industry Food & Beverage

Cushman & Wakefield

16,633

Other

Winick Realty Group

14,225

Accessories

DLL Real Estate Ltd.

11,600

Discount

ABS Partners Real Estate

10,640

Educational

RKF

10,600

Health & Beauty

SCG Retail

8,460

Sinvin

6,480

Financial

9

5

Fashion

4

9

19

2

Other 1

Accessories

00

0 7,

3

Educational Health & Beauty Financial

0

11,60

Discount

2

57

1 ,0

42

25,085

,2

Fashion

Newmark Grubb Knight Frank

Food & Beverage

2

10,065

34,000

51

37,000

Miyad Realty, LLC

46 ,2 50

Gluck Realty

104 April 2015 www.TheRealDeal.com

Retail leases sf, by industry 4,018

Leased square feet

8,050

Broker

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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 2/14/15 to 3/13/15. Please submit future deals to deals@therealdeal.com.

Office leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

280 Park Ave

100,000

PJT Partners / Evan Margolin, Savills Studley

Vornado Realty Trust and SL Green Realty / Peter Turchin, Mary Ann Tighe, Eric Deutsch, Sam Seiler, Gregg Rothkin, CBRE

The bank signed a lease.

350 Fifth Ave

78,000

HNTB Corporation / Sven Sykes, Tyler Owens, Mark Friedman, Colliers International

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

The infrastructure consulting firm signed a 10-year lease.

350 Madison Ave

59,000

Bank Leumi USA / Brian Gell, Joan Meixner, Brett Shannon, CBRE

RFR Realty / Mitchell Konsker, Alexander Chudnoff, Dan Terkowitz, Diana Biasotti, Matt Polhemus, JLL; Oliver Katcher, RFR Realty

The Israeli bank signed a lease to occupy the third, fourth and sixth floors.

330 Hudson St

47,000

TED / Scott Bogetti and Sacha Zarba, CBRE

Beacon Capital Partners / n/a

The group, run by nonprofit organization Sapling Foundation, signed a lease.

92 Third Ave

42,000

Cowork.rs / n/a

n/a / n/a

The office space provider signed a lease.

119-125 West 24th St

36,000

AlleyNYC / n/a

Kaufman Organization / n/a

The office space provider signed a lease.

560 Lexington Ave

34,408

Vodafone / William Fressle, Cushman & Wakefield

Rudin Management Co. / Thomas M. Keating and Kevin P. Daly, Rudin Management Co.

The telecommunications company signed an expansion lease to occupy the entire eighth and ninth floors.

200 Lafayette St

33,560

Chobani / Christopher Owles and James Costello, Sinvin

200 Lafayette LLC / Paul Amrich, Neil King, Patrice Meagher, CBRE

The Greek yogurt maker signed a 10-year lease to occupy the sixth and seventh floors. The reported asking price was $85 per square foot.

601 Lexington Ave

31,400

Apax Partners L.P. / Stephen Berliner and Daniel O. Horowitz, Savills Studley

n/a / Andrew Levin and Peter Hansen, Boston Properties

The private equity investment group signed a 10-year renewal lease.

55 East 52nd St

31,000

BlackRock / Donald DiRenzo Sr., Cushman & Wakefield

Fisher Brothers and Soho China / Marc Packman, Fisher Brothers

The financial planner signed an eight-year expansion lease to occupy the entire 27th floor.

875 Third Ave

30,000

JPB Foundation / David Rosenbloom and Emily Weber, Cushman & Wakefield

Eastgate Realty / Paul Glickman and Diana Biasotti, JLL

The grant-making nonprofit signed a 15-year lease. The reported asking price was $86 per square foot.

30-30 47th Ave (Queens)

22,275

Transel Elevator and Electric / John Brod, Ben Waller, Steven Hornstock, Gregg Schenker, Joseph D’Apice, ABS Partners Real Estate

Atlas Capital / Harold Kesseler and Jordan Gosin, Newmark Grubb Knight Frank

The elevator company signed a 10-year lease.

711 Third Ave

20,000

Niche Media / Scott Panzer and Kirill Azovtsev, JLL

SL Green Realty / Gary Rosen and Howard Tenenbaum, SL Green Realty

The publisher signed a five-year lease to occupy the entire fifth floor.

The reported asking price was $55 per square foot.

387 Park Avenue South

19,000

Citi Habitats / Chris Mongeluzo, Newmark Grubb Knight Frank

TF Cornerstone / Matt Leon, Newmark Grubb Knight Frank; Chip Sealy, TF Cornerstone

The residential brokerage signed a lease to occupy the fourth floor.

136 Madison Ave

18,500

Peter Pennoyer Architects / David Rosenbloom and Emily Weber, Cushman & Wakefield

136 Madison Associates LP / Andrew Roos and Michael Cohen, Colliers International

The architecture firm signed a lease.

151 West 26th St

16,820

Social Code, LLC / Simone Lillian, Sinvin

Abner Properties Company / Allen J. Gurevich, Newmark Grubb Knight Frank

The social media company signed a 10-year lease to occupy the ninth floor.

2-15 Borden Ave (Queens)

16,000

Brooklyn Studios / M.C. O’Brien Inc.

Kaplon-Belo Associates Inc. / M.C. O’Brien Inc.

The film studio signed a lease.

7 World Trade Center

13,000

Permasteelisa Group / Howard Kesseler and Jordan Gosin, Newmark Grubb Knight Frank

FXDD / Scott Weiss and Caroline Kingsbery, Savills Studley

The contracting firm signed a sublease to occupy the 32nd floor.

One Grand Central Pl

12,923

Athlon Sports Communications, Inc. / n/a

Empire State Realty Trust / Fred Posniak, Empire State Realty Trust; William Cohen, Jonathan Tootell, Julie Christiano, Newmark Grubb Knight Frank

The media and advertising agency signed an expansion lease.

183 Madison Ave

9,918

ClearSide, Inc. / Michael Hirsch and Sacha Zarba, CBRE

Tishman Speyer Properties / Rob Weller, Tishman Speyer Properties

The tenant signed a four-year lease to occupy part of the 17th floor.

527 Madison Ave

8,600

Clarion Capital Partners, LLC / Stephen Berliner, Savills Studley

Wunderlich Securities / Derrick Ades, Brian Hay, Timothy Hay, Meredith Maher, Pat Gamble, CBRE

The tenant signed a three-year sublease.

20 West 22nd St

7,865

TOTO USA / Mark Tergesen and Robert Kempner, ABS Partners Real Estate

20 West 22nd Street Associates, LLC / Mark Tergesen, Robert Kempner, Jason Fein, Robert Finkelstein, Dean Valentino, ABS Partners Real Estate

The plumbing manufacturer signed a lease to occupy showroom and office space.

159 West 25th St

7,500

Magnetic Collaborative LLC / Michelle Stone, Sinvin

159 West 25th Street LLC / n/a

The design company signed a 10-year lease to occupy the seventh floor.

The reported asking price was $42.50 per square foot.

42 Broadway

7,138

Select Safety / Gregg Schenker, Keith Lipstein, Jonathan Cohen, Jay Kreisberg, Joseph D’Apice, Robert Finkelstein, ABS Partners Real Estate

The Lawrence Group / n/a

The safety equipment supplier signed a six-year lease to occupy part of the third floor.

To view more deals visit our website: www.TheRealDeal.com 106 April 2015 www.TheRealDeal.com

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OfďŹ ce leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

200 Park Avenue South

6,149

Good Apple Digital / n/a

n/a / John Gols, Alan Friedman, Charles Conwell, Gregg Schenker, Earle Altman, Steven Hornstock, ABS Partners Real Estate

The boutique media agency signed a lease.

463 Seventh Ave

5,866

Knoles & Carter / David Levy, Adams & Co.

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

The outerwear manufacturer signed a ďŹ ve-year expansion lease to occupy the eighth ďŹ&#x201A;oor. The reported asking price was $48 per square foot.

501 Seventh Ave

5,360

Reunited LLC / n/a

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

The tenant signed a renewal lease.

19-21 West 36th St

5,200

Resolution Digital / n/a

n/a / Andrew Udis and Ron Zimmerman, ABS Partners Real Estate

The imagery agency signed a three-year renewal lease. The reported asking price was $39 per square foot.

19-21 West 36th St

5,000

World Media / n/a

n/a / Andrew Udis and Ron Zimmerman, ABS Partners Real Estate

The advertising agency signed a two-year renewal lease. The reported asking price was $39 per square foot.

22 Little West 12th St

4,900

Anderson Global Macro / Scott Bennett, Prime Manhattan Realty

The Jones Group / Prime Manhattan Realty

The tenant signed a ďŹ ve-year sublease to occupy part of the 22nd ďŹ&#x201A;oor.

510 Madison Ave

4,597

J Goldman & Co. LP / Ken Ruderman, Savills Studley

Boston Properties / Paul Amrich, Christie Harle, Neil King, CBRE

The tenant signed a seven-year expansion lease.

253 Church St

4,530

Anyway MGMT / Sam Reznitsky, Miyad Realty

Century 21 Department Stores / Margie Sarway, Sinvin

The public relations company signed a 10-year lease to occupy the second, fourth and ďŹ fth ďŹ&#x201A;oors. The reported asking price was $43 per square foot.

915 Broadway

4,148

Retail Capital Holdings / Elizabeth Juviler, Rice & Associates

n/a / Carol Sacks, Jay Caseley, Alex Kaskel, ABS Partners Real Estate

The tenant signed a ďŹ ve-year lease to occupy part of the 10th ďŹ&#x201A;oor.

350 Fifth Ave

3,719

Ease Entertainment Services, LLC / Zachary Cilman and Barry Zeller, Cushman & WakeďŹ eld

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

The tenant signed a lease.

915 Broadway

3,386

Privilege Underwriters / Noel Flagg and Alex Smith, Newmark Grubb Knight Frank

n/a / Jay Caseley, Carol Sacks, Gregg Schenker, Steven Hornstock, Alex Kaskel, ABS Partners Real Estate

The insurance company signed a seven-year lease.

821 Broadway

3,250

Somo Global Inc. / James Costello, Sinvin

821 Broadway LLC / n/a

The technology company signed a three-year lease to occupy the sixth ďŹ&#x201A;oor.

The reported asking price was $74 per square foot.

915 Broadway

3,244

Samsung Everland / David Cohen, Avison Young

n/a / Carol Sacks, Jay Caseley, Alex Kaskel, ABS Partners Real Estate

The South Korean amusement park operator, a subsidiary of Samsung Group, signed a ďŹ ve-year lease to occupy part of the ďŹ fth ďŹ&#x201A;oor.

110 Greene St

2,850

CIOT / James Costello, Sinvin

Big Greene, LLC / n/a

The design company signed a three-year lease to occupy the third ďŹ&#x201A;oor.

The reported asking price was $70 per square foot.

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

350 Fifth Ave

2,530

Smaato, Inc. / David Stockel, Cushman & Wakefield

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

The tenant signed a lease.

99 Hudson St

2,500

Tribeca Venture Partners / Randy Kornblatt and Trisha Etienne, Sinvin

NYCRC / Jon Chodosh and Sarah Cassell, Chodosh Realty Services

The venture capitalist signed a five-year lease to occupy the 15th floor.

The reported asking price was $68 per square foot.

120 Stuyvesant Pl (Staten Island)

2,500

CAMBA / M.C. O’Brien Inc.

Stuyvesant Place LLC / Gateway Arms

The Brooklyn-based nonprofit signed a lease.

297 Livingston St (Brooklyn)

2,500

Sylvan Learning / M.C. O’Brien Inc.

Estate of Sylvia W. Shulman / Ingram & Hebron

The SAT Prep company signed a lease.

121 West 27th St

2,480

Leather Resource of America, Inc. / Simone Lillian, Sinvin

Sara’s New York Homestay LLC / Phil Katz, Katz NYC LLC

The fashion company signed a three-year lease to occupy the 10th floor.

The reported asking price was $39.68 per square foot.

220 East 23rd St

2,250

IU & Bibliowicz Architects, LLP. / n/a

Elk Investors Inc. / Ron Zimmerman, Andrew Udis, Ian Weiss, ABS Partners Real Estate

The architecture firm signed a five-year lease. The reported asking price was $46 per square foot.

501 Seventh Ave

2,243

Mode & Beyond, Inc. / n/a

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

The tenant signed a lease.

853 Broadway

2,170

Media IQ / Mark Tergesen, Jay Caseley, Ian Weiss, ABS Partners Real Estate

The Feil Organization / n/a

The analytics company signed a one-year lease to occupy the entire 12th floor.

145 West 45th St

2,168

M. Castedo Architect, P.C. / Audrey Novoa, ABS Partners Real Estate

n/a / n/a

The architecture firm signed a seven-year lease.

137 Varick St

2,134

JAM Branding / n/a

Trinity Hudson Holdings LLC / Randy Kornblatt and Trisha Etienne, Sinvin

The tenant signed a three-year lease to occupy the sixth floor. The reported asking price was $45 per square foot.

47 East 19th St

2,000

Keaton Row / Jonathan Isbitt, Sinvin

Lo Mid Range Cattle Corp. / n/a

The personal stylist signed a lease.

122 East 42nd St

1,839

Jessie Smith Noyes Foundation, Inc. / n/a

Overbrook Foundation / Michael Affronti and Silvio Petriello, CBRE

The tenant signed a six-year sublease to occupy part of the 25th floor.

915 Broadway

1,794

The People’s Operator / David Firestein and Taryn Brandes, The Shopping Center Group

n/a / Carol Sacks, Jay Caseley, Alex Kaskel, ABS Partners Real Estate

The mobile phone network provider signed a three-year lease to occupy part of the 13th floor.

515 Madison Ave

1,352

US Orthotics / n/a

n/a / Martin Mcgrath, Newmark Grubb Knight Frank

The tenant signed a lease. The reported asking price was $52 per square foot.

20 West 22nd St

1,350

A/O Production, Inc. / n/a

20 West 22nd Street Associates / Jason Fein, Robert Finkelstein, Gregg Schenker, Steven Hornstock, Earle Altman, ABS Partners Real Estate

The production company signed a five-year lease.

37-39 East 28th St

1,328

Augmented Reality Concepts, Inc. / Helen Demetrious and Ina Donath, Capstone Realty Advisors

n/a / Jack Cohen, Skylight Leasing

The software company signed a lease.

20 West 22nd St

1,204

Floren Shieh Productions / n/a

20 West 22nd Street Associates / Jason Fein, Robert Finkelstein, Gregg Schenker, Steven Hornstock, Earle Altman, ABS Partners Real Estate

The production company signed a five-year lease

2275 Coleman St (Brooklyn)

1,180

Barristers Title Agency LLC / M.C. O’Brien Inc.

Kings Plaza Associates LLC / M.C. O’Brien Inc.

The title agency signed a lease.

257 West 38th St

900

Dotalign / Gaelle Ferret, Bertwood Realty

Chez LLC / Abe Bichoupan, Bertwood Realty

The software developer signed a five-year lease.

Retail leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

2085 Broadway

25,085

Bloomingdale’s / George Graf, Newmark Grubb Knight Frank

Stahl Real Estate and Peter Malkin / Gene Spiegelman and Michael O’Neill, Cushman & Wakefield

The department store signed a 15-year lease to occupy three stories.

29 Jay St (Brooklyn)

20,000

Gelsey Kirkland Academy of Classic Ballet / Michael Rouzenrouch, Miyad Realty, LLC

n/a / Peter Forman

The ballet school signed a lease.

200 Riverside Blvd

14,000

NYC Elite / Michael Rouzenrouch, Miyad Realty, LLC

Extell Development / Carol Richardson, Extell Development

The gymnastics center signed a lease.

243 St. Marks Ave (Brooklyn)

11,600

Lightbridge Academy / David Latman, DLL Real Estate Ltd.

DNA Real Estate LLC / Andrew Clemens and Benjamin Weiner, RIPCO

The educational academy signed a lease.

392 Jersey St (Staten Island)

10,000

Family Dollar / Gluck Realty

n/a / Gluck Realty

The discount store signed a lease.

888 Jamaica Ave (Brooklyn)

10,000

Family Dollar / Gluck Realty

RW Real Estate Group, LLC / Gluck Realty

The discount store signed a 10-year lease.

252 West 37th St

9,800

District Tap House / Richard Smith, Winick Realty Group

Eretz Group / Nicholas Mok, Eretz Group

The restaurant signed a lease to occupy space on the ground floor, mezzanine and basement.

724 Second Ave

9,750

NYU Langone Medical Center / Mark Mandell, Cushman & Wakefield

Equity Residential / Hal Shapiro and Kenneth Hochhauser, Winick Realty Group

The medical center signed a lease.

415 Soundview Ave (Bronx)

9,000

Family Dollar / Gluck Realty

n/a / Gluck Realty

The discount store signed a lease.

1385 Sutter Ave (Brooklyn)

8,000

Family Dollar / Gluck Realty

n/a / Gluck Realty

The discount store signed a lease.

245 Fifth Ave

6,200

FRAME Denim / n/a

n/a / Christel Engel, Colliers International

The fashion brand signed a lease for a showroom.

162-164 East 116th St

5,600

Popular Community Bank / Josh Augenbaum, Augenbaum Realty

Urban Scape, LLC / Josh Augenbaum, Augenbaum Realty

The bank signed a lease.

110 April 2015 www.TheRealDeal.com

DE L I VER IN G CU TTING E D GE FINANC IAL STRUCTURING $125,350,000

$112,000,000

$29,600,000

126 Units Multifamily

80 Units Condominium

45,413 SF Retail

Brooklyn, NY

New York, NY

Braintree, MA

$29,000,000

$18,000,000

$10,300,000

376,400 SF Retail Portfolio

50 Units Multifamily

321 Keys Hotel Portfolio

Southeast Region

Brooklyn, NY

Southeast Region

Investment Sale & Acquisition Financing

Debt Construction Financing

Debt Construction Financing

Debt Refinancing

ONE FIRM. C A P I TA L

S A N

B O S T O N | F R A N C I S C O & L O S

Debt Acquisition Financing

JV Equity

F U E L E D B Y I N N O VAT I O N .

N E W Y O R K | M I A M I A N G E L E S O F F I C E S O P E N I N G A C K M A N Z I F F. C O M

S O O N

Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

1000 Avenue of the Americas

5,000

Chick-fil-A / Jeremy Ezra, RKF

1000 Sixth Avenue LLC / Jack Terzi, JTRE Holdings

The fast food chain signed a lease for its first free-standing location in New York City.

60 East 11th St

4,890

Momo Holdings / Mark Tergesen, Ian Weiss, Jay Caseley, ABS Partners Real Estate

n/a / Mark Tergesen, Ian Weiss, Jay Caseley, ABS Partners Real Estate

The restaurant signed a five-year lease.

21 West 38th St

4,465

Horsemouth / n/a

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

The financial planner signed a five-year lease for the entire 14th floor.

355 Greenwich St

4,100

Maison Kayser / Davie Berke and Paul Berkman, JLL

n/a / Lee Block and Melinda Miller, Winick Realty Group

The bakery signed a lease.

95 Fifth Ave

4,000

Bonobos Guideshop / Justin Fantasia, RKF

KLM Equities Inc. / Beth Rosen and Richard Gelber, RKF

The men’s clothing brand signed a lease for a flagship store.

17 East 71st St

3,733

The Row / Sara Fabian, Cushman & Wakefield

Acadia Realty Trust / Stuart Ellman, Judson Realty

The luxury fashion brand founded by Mary-Kate and Ashley Olsen signed a long-term lease for its flagship store. It will occupy the lower, ground and second floors.

73 Wooster St

3,703

Moschino / Joel Isaacs and Marc Simon, Isaacs & Company

EPIC 387 LLC / Christopher Owles and Max Talpalar, Sinvin

The fashion company signed a 10-year lease. The reported asking price was $225 per square foot.

464 West Broadway

3,375

Seraphine / Sarah Shannon, Sinvin

Weisman Associated Limited Partnership / Gary Alterman, Brandon Berger, RKF

The fashion company signed a 15-year lease. The reported asking price was $204.18 per square foot.

246 West 48th St

3,250

Lantern / Dean Valentino and Andy Udis, ABS Partners Real Estate

Northeast Vantage LLC / Ron Boricoro, CBRE

The organic and nonprofit restaurant signed a 15-year lease.

97 Second Ave

3,145

Hou Yi Spicy, Inc. / Cody Pan, TM Realty & Management

97 2nd LLC / Steve Rappaport, Sinvin

The restaurant signed a 15-year lease. The reported asking price was $104.23 per square foot.

875 Third Ave

3,100

Starbucks / David Firestein, SCG Retail

Eastgate / Mike O’Neill, Cushman & Wakefield

The coffee chain signed a lease in the former Qdoba space.

1290 Amsterdam Ave

3,000

Big Belly Roti / n/a

n/a / Andrew Stern, Jackie Totolo, Ariel Schuster, Gary Alterman, RKF

The restaurant signed a lease.

120 Second Ave

3,000

Uni K. Wax Center / Adam Goldschmidt, AG Consulting

120 Operating, LLC / Mark Tergesen, Dean Valentino, Robert Kempner, ABS Partners Real Estate

The waxing service store signed a 10-year lease. The reported asking price was $100 per square foot.

181 Smith St (Brooklyn)

2,600

El Milagro / n/a

n/a / Nicole Liebman, Cushman & Wakefield

The furniture, antique, and jewelry store signed a lease.

508 Greenwich St

2,500

Houseman / Dean Valentino and Mark Tergesen, ABS Partners Real Estate

508 Greenwich LLC / James Famularo and Ravi Idnani, Eastern Consolidated

The restaurant signed a 10-year lease.

1165 Elton St (Brooklyn)

2,452

Andrew D. Walcott / M.C. O’Brien Inc.

Gateway Elton Street I, LLC / M.C. O’Brien Inc.

The restaurant signed a lease.

320 8th Ave

2,400

Bean & Bean / Josh Singer and Adam Heller, The Heller Organization; Adrian Berger, Corner Commercial Real Estate

Chelsea W26 LLC / Josh Singer and Adam Heller, The Heller Organization; Adrian Berger, Corner Commercial Real Estate

The boutique café group signed a lease.

400 West Broadway

2,350

Repetto / Eric Le Goff, Sarah Fabian, James Downey, Cushman & Wakefield

SF Acquisition, LLC / Christopher Owles and Sarah Shannon, Sinvin

The dance apparel company signed a 10-year lease. The reported asking price was $348.48 per square foot.

28 Greenwich Ave

2,290

Mah Ze Dahr Bakery / Anita Grossberg, Douglas Elliman

14 L Pierre Associates / Josh Siegelman, Winick Realty Group

The bakery signed a lease.

31-07 Steinway St (Queens)

2,250

Zale Delaware Inc. / Tyler Bennett, Winick Realty Group

BLDG Management / Tyler Bennett, Winick Realty Group

The jewelry store signed a lease.

475 West 57th St

2,175

Starbucks / David Firestein, SCG Retail

Duane Reade / Kelly Gedinsky, Winick Realty Group LLC

The coffee chain signed a sublease from Duane Reade Express.

31-00 47th Ave (Queens)

2,175

Stolle Pie Shops / Aaron S. Fishbein, Winick Realty Group

Jamestown LP / Dave Tricarico, Cushman & Wakefield

The Eastern European café chain signed a 10-year lease for its first U.S. location.

50 Third Ave

2,000

Taste Wine Co. / n/a

Ira Z. Fishman and Nathan Halegua / Ira Z. Fishman, Nathan Halegua, Robert Frischman, EVO Real Estate Group

The wine-tasting program and retail store signed a 10-year lease.

The reported asking price was $150 per square foot.

2133 86th St (Brooklyn)

1,800

Visionworks / Richard Senior and Isaac Shabot, RIPCO

86th Street Realty Associates / Richard Senior and Isaac Shabot, RIPCO

The optical store signed a 10-year renewal lease.

253 36th St

1,700

By Boe / Bertrand de Soultrait, Bertwood Realty

1-10 Bush Terminal Owner LP, Industry City / n/a

The jewelry and accessories store signed a lease for a new showroom location.

636 Hudson St

1,700

Marisa Perry / Christopher Owles and Jonathan Isbitt, Sinvin

Gidina partners, LLC / Jay Gilbert, Newmark Retail

The jewelry store signed a 10-year lease.

2937 Broadway

1,600

Sweetgreen / Jacqueline Klinger, David Firestein, Taryn Brandes, SCG Retail

Excelsior Associates / David Alani, InLine Realty

The restaurant signed a lease.

1378 Madison Ave

1,585

Starbucks / SCG Retail

16 East 96th Street Apartment Corporation / Faith Hope Consolo and Joseph Aquino, Douglas Elliman

The coffee chain signed a 10-year lease that will incorporate Teavana Fine Teas + Tea Bar. The reported asking price was $350 per square foot.

150 Amsterdam Ave

1,562

Spruce & Bond / n/a

n/a / Peter Whitenack and Robert Cohen, RKF

The hair-removal service signed a lease.

1262 Broadway (Brooklyn)

1,418

Sprint / Jeremy Scholder and Dean Rosenzweig, CBRE

262 Broadway Equities LLC / Andrew Clemens and Benjamin Weiner, RIPCO

The cellular store signed a lease.

432 East 13th St

1,100

Kaito Corporation / Masa Ikeda, ICS/Taichi Realty

M&E 432 East 13th LLC / Steve Rappaport, Sinvin

The restaurant signed a lease.

185 Mulberry St

1,000

A Détacher / Jonathan Isbitt, Sinvin

Park Lane Management Corp. / Nir Gilboa, Nolita Group

The fashion company signed a five-year lease. The reported asking price was $102 per square foot.

317 Bleecker St

1,000

Spruce & Bond / Beth Rosen and Ben Zack, RKF

n/a / Beth Rosen and Ben Zack, RKF

The hair-removal service signed a lease.

178 West Houston St

850

Mirai Create Inc. / Victor Nezu, Nezu Properties

348 East Realty LLC / Steve Rappaport, Sinvin

The hair salon signed a 10-year lease. The reported asking price was $202.53 per square foot.

112 April 2015 www.TheRealDeal.com

TOWN RESIDENTIAL

IS PLEASED TO WELCOME KAREN GASTIABURO & DOROTHY SEXTON “I am passionate about the future and know that with the robust foundation and forward thinking vision of TOWN Residential, WKH )LQDQFLDO 'LVWULFW RI´FH DQG Representatives are poised for success.”

KAREN GASTIABURO Sales Director Town Financial District 88 Greenwich Street O: 646.588.4310 kgastiaburo@townrealestate.com

“I look forward to helping the Representatives utilize TOWN’s innovative tools to build their business while achieving incomparable results for their clients.”

DOROTHY SEXTON Managing Director Town Fifth Avenue 730 Fifth Avenue O: 646.300.6030 desxton@townrealestate.com

Town Residential LLC ("Town") is a licensed real estate broker and a partnership of Buttonwood Residential Brokerage LLC and Thor Equities, LLC. Town Greenwich Street LLC and Town Fifth Avenue LLC are licensed real estate brokers and subsidiaries of Town. O: 212.398.9800

Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

266 Elizabeth St

800

BucketFeet / Jason Greenstone, Gene Spiegelman, Michael O’Neill, Alisa Amsterdam, Cushman & Wakefield

n/a / n/a

The footwear brand signed a lease.

1010 Rutland Rd (Brooklyn)

675

My Health & Me NP in Family Health PLLC / n/a

Rutland Corners, LLC / M.C. O’Brien Inc.

The nurse practitioner signed a lease.

673 Madison Ave

600

Aaron Basha / Joshua Strauss and Ben Zack, RKF

n/a / Joshua Strauss and Ben Zack, RKF

The jewelry store signed a lease.

432 Third Ave

450

Birch Coffee / Kyle Allen, Synapse Retail

Gramercy Management / Geoff Bailey and Rachel Kim, SCG Retail

The coffee chain signed a lease.

22 East 65th St

405

Le Labo / Sarah Shannon, Sinvin

L&M 65th Madison LLC / n/a

The fragrance store signed a 10-year lease. The reported asking price was $987.65 per square foot.

Buys Address

Size

Buyer / Representative

Seller / Representative

Notes

Manhattan, Brooklyn and Queens multi-family portfolio

32 bldgs

A&E Real Estate / Aaron Jungreis, Rosewood Realty Group

Dermot Company / n/a

The 32-building portfolio sold for $360 million.

9 Crosby St

270-key

Sapir Organization / n/a

German American Capital Corporation / n/a

The hotel sold for $205 million.

163 East 61st St, 165 East 61st St, 1030 Third Ave

39-story

Trump Plaza Owners Inc. / n/a

The Ruth Associates / n/a

The land under the multi-family building sold for $185 million.

257-271 South St

256-units, 236,065 sf

L+M Development Partners and Nelson Management Corp. / Shimon Shkury, Victor Sozio, Jesse Deutch, Ariel Property Advisors

Starrett Corporation / Shimon Shkury, Victor Sozio and Jesse Deutch, Ariel Property Advisors

The multi-family building sold for $115 million.

40 West 25th St

12-story, 130,000 sf

Jowa Holdings / n/a

Brickman Real Estate and DivcoWest / Doug Harmon, Kevin Donner, Adam Spies, Eastdil Secured

The office building sold for $106 million.

15 East 30th St

370,000 sf development site

JD Carlisle / n/a

Rabina Properties / n/a

The development site sold for $102 million.

138 East 12th St

85-units, 55,000 sf

Wafra Residential Value Invest / n/a

YYY Third Avenue LLC / Andrew Scandalios, Eric Anton, Jose Cruz, HFF

The mixed-use building sold for $98.3 million.

27 West 24th St

11-story, 125,000 sf

n/a / Barry Berkowitz and Garett Stoffels, Newmark Grubb Knight Frank

Kaufman Organization / Woody Heller and Will Silverman, Savills Studley

The office building sold for $92 million.

114 April 2015 www.TheRealDeal.com

2 UP TO 330,000 SQ FT OF CLASS A OFFICE SPACE Direct access to Penn Station via concourse Connected to the East Coast’s largest dark fiber hub, offering the most broadband capacity at the lowest cost in the market In the heart of New Jersey’s “Billion Dollar Triangle” of sports, entertainment and arts; including The Prudential Center, Red Bull Stadium, NJPAC and the Ironbound section’s famous Portuguese and Spanish Restaurants

DUDLEY RYAN 973.437.2083 | dudley.ryan@cbre.com

Buys continued Address

Size

Buyer / Representative

Seller / Representative

Notes

41 Flatbush Ave (Brooklyn)

230,000 sf development site

Quinlan Development Group and Building & Land Technology / Andrew Sasson and Ben Tapper, Eastern Consolidated

Prudential Real Estate and Extra Space Storage / n/a

The development site sold for $89.4 million.

200 East 62nd St

11,000 sf

Acadia Realty Trust / Gary Trock and Michael Kadosh, CBRE

O’Connor Capital Partners / Gary Trock and Michael Kadosh, CBRE

The retail space and garage sold for $51 million.

355 West St, 358 West St

53,250 buildable sf development site

Ian Schrager / n/a

Weinberg Properties / n/a

The two development sites sold for $48.5 million.

230 East 44th St

14-story, 164-units, 135,315 sf

Dalan Management and RWN Real Estate Partners / Daniel Rahman, Venture Capital Properties

Uri Mermelstein / John Stewart, Cole Schotz

The 99-year ground lease sold for $47 million.

29 Ryerson St (Brooklyn)

215,000 sf development site

Madison Realty Capital / n/a

Chaim Miller / n/a

The development site sold for $45 million.

1711-1751 Fulton St

4 bldgs, 6-story, 283-units

Bushburg Properties / Aaron Jungreis, Rosewood Realty Group

E&M Associates / Aaron Jungreis, Rosewood Realty Group

The four mixed-use buildings sold for $38 million.

146-150 10th Ave

3 bldgs, 48-units, 25,875 sf

Hidrock Realty / HPNY

Lyclear Realty Corp. / HPNY

The three mixed-use buildings sold for $35.5 million.

893 Broadway

4-story, 17,500 sf

Cholla LLC / Adelaide Polsinelli, Eastern Consolidated

Warman Enterprises LLC / Adelaide Polsinelli, Eastern Consolidated

The mixed-use building and the leasehold for the Hotel Verite sold for $35 million, or $2,000 per square foot.

2417 Third Ave (Bronx)

8-story, 175,000 sf

Hornig Capital Partners and Savanna / Jaber and Ruben Martinez, DY Realty

Madhatters Realty / Jaber and Ruben Martinez, DY Realty

The office building sold for $31 million.

146 West 28th St

7-story, 28,250 sf

Eunhasu Corporation / n/a

Sovereign Partners / n/a

The mixed-use building sold for $30.5 million.

121-133 Hudson St

33,500 sf

Centurion Realty / n/a

Greystone / n/a

The retail condo sold for $30 million.

28 East 14th St

5-story, 11,875 sf

Forest Town Realty / Julie Kang, Keller Williams NYC

Ultimate Realty / James Nelson, Cushman & Wakefield

The mixed-use building sold for $29.5 million, or $2,484 per square foot.

163 Front St

10-story, 58,500 sf, 98,280 buildable sf

Howard Hughes Corp. / n/a

American International Realty / n/a

The office building sold for $24 million.

261 Broadway

13,800 sf

n/a / n/a

n/a / Ofer Cohen, Edan Cohen, David Chernoff, Nissim Oron, EPIC Commercial Realty

The retail condo sold for $22 million, or $1,600 per square foot.

351 Broadway

4-story, 5-units, 14,445 sf

Toll Brothers City Living / Alan S. Cohen, ABS Partner

TNS Development Group / Alan S. Cohen, ABS Partner

The office building sold for $21 million.

497 Broome St

5,700 sf

John Dee Corp. / Brian Segall and Chris Masi, RKF

n/a / Brian Segall and Chris Masi, RKF

The mixed-use building sold for $18.7 million.

167 Mott St

7-story, 17,600 sf

n/a / Khashy Eyn and Julien Kabla, Platinum Properties

AD Real Estate, Inc. / Khashy Eyn and Julien Kabla, Platinum Properties

The mixed-use building sold for $17 million.

11 East 30th St

6-story, 5-units, 9,810 sf

1130 Empire Holdings, LLC / D&Z Sasson Inc.

E.S.A. Holding Corp. / 3JM Realty, LLC

The mixed-use building sold for $8.9 million, and the development rights sold to Madison 30 31 Owner LLC for $4.5 million.

511 West 181st St, 2486 Valentine Ave (Bronx)

2 bldgs, 6 and 5-story, 44,012 sf, 58-units total

n/a / Lynda Blumberg, Besen & Associates

Wimbledon Building I Lp and 35 11 Realty Lp / Amit Doshi and Luca Capin, Besen & Associates

The two mixed-use buildings sold for $8.3 million

767-771 3rd Ave (Brooklyn)

2-story, 44,000 sf

n/a / n/a

n/a / Brian T. Leary and Jacob Tzfanya, CPEX

The warehouse sold for $8.2 million, or $187.50 per square foot.

142-144 Decatur St (Brooklyn)

4-story, 23-units, 15,520 sf

DeCatur Residences LLC / Michael Guttman, Rosewood Realty Group

142-144 DeCatur Residences LLC / Michael Guttman, Rosewood Realty Group

The multi-family building sold for $8 million.

1345-1349 Amsterdam Ave

3 bldgs, 5-story, 31-units, 18,630 sf, 6,120 sf of air rights

1345 Amsterdam Avenue LLC / Peter Vanderpool and Lazer Sternhell, Cignature Realty Associates

1345 Amsterdam Ave. Owner LLC / Peter Vanderpool and Lazer Sternhell, Cignature Realty Associates

The three mixed-use buildings sold for $7.7 million.

355-357 West 39th St

2 bldgs, 2 and 4-story, 10-units, 8,406 sf

n/a / Bob Knakal and Stephen P. Palmese, Cushman & Wakefield

n/a / Bob Knakal and Stephen P. Palmese, Cushman & Wakefield

The mixed-use building sold for $7.4 million.

2505 and 2509 Hoffman St (Brooklyn)

2 bldgs, 5-story, 50-units, 35,624 sf total

n/a / Aaron Jungreis, Rosewood Realty Group

Bsp Hoffman / Aaron Jungreis, Rosewood Realty Group

The multi-family building sold for $6.2 million.

1356-1358 St. Nicholas Ave

5-story, 14,809 sf, 17-units

n/a / Shalini Mehra, Besen & Associates

1356-1358 St. Nicholas Ave LLC / Amit Doshi, Besen & Associates

The mixed-use building sold for $6.1 million, or $412 per square foot.

469 West 153rd St

19-units

n/a / Sylvia Spielman, GFI Realty Services

n/a / Shawn Sadaghati and Yisroel Pershin, GFI Realty Services

The multi-family building sold for $4.6 million.

108 Calyer St (Brooklyn)

4-story, 8-units, 7,020 sf

n/a / Jake Blatter, Rosewood Realty Group

108 Calyer Street LLC / Mike Kerwin, Rosewood Realty Group

The multi-family building sold for $4.6 million.

516 12th St (Brooklyn)

6-units

n/a / Derek Bestreich, Lucien Sproviero, Adam Lobel, Marcus & Millichap

n/a / Derek Bestreich, Lucien Sproviero, Adam Lobel, Marcus & Millichap

The multi-family building sold for $3.8 million.

7 Harrison St

1,973 sf

Yoon Chang / Roxanne Betesh, Sivin

Harrison Street Residences LLC / David Tricarico, Cushman & Wakefield

The retail condo sold for $3.6 million.

190 Morgan Ave (Brooklyn)

14,875 sf

n/a / Jakub Nowak and James McGuckin, Marcus & Millichap

n/a / Jakub Nowak and James McGuckin, Marcus & Millichap

The warehouse sold for $3.5 million, or $318 per square foot.

414 East 94th St (Brooklyn)

4-story, 28-units, 25,632 sf

n/a / Aaron Jungreis and Raphael Toledano, Rosewood Realty Group

n/a / Aaron Jungreis, Rosewood Realty Group

The multi-family building sold for $3.4 million.

546 East 182nd St (Bronx)

5-story, 25-units

n/a / n/a

n/a / Paul V. Shkreli, Village Home Realty, LLC

The multi-family building sold for $2.8 million, or $112,000 per unit.

175-42 Hillside Ave (Queens)

40,000 buildable sf

n/a / n/a

n/a / Michael A. Tortorici, Daniel Wechsler, Marko Agbaba, Victor Sozio, Ariel Property Advisors

The development site sold for $2.8 million.

14-23 Broadway (Queens)

13,620 buildable sf

n/a / n/a

n/a / Daniel Wechsler, Michael A. Tortorici, Howard Raber, Marko Agbaba, Victor Sozio, Ariel Property Advisors

The development site sold for $1.9 million.

1517 White Plains Rd (Bronx)

5-story, 19-units, 13,280 sf

n/a / Amit Doshi, Besen & Associates

Mcw Holdings LLC / Richard Torres, Besen & Associates

The multi-family building sold for $1.8 million, or $138 per square foot.

605 West 179th St

4-story, 3,648 sf, 17,838 buildable sf

n/a / Lev Kimyagarov and Robert M. Shapiro, Cushman & Wakefield

n/a / Lev Kimyagarov and Robert M. Shapiro, Cushman & Wakefield

The mixed-use building sold for $1.3 million, or $356 per square foot.

116 April 2015 www.TheRealDeal.com

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Buys continued Address

Size

Buyer / Representative

Seller / Representative

Notes

227 Clarkson Ave (Brooklyn)

11,139 sf

n/a / n/a

n/a / Yona Edelkopf, Baruch Edelkopf, Mike Rybinskov, EPIC Commercial Realty

The development site sold for $1.3 million.

290 North 6th St (Brooklyn)

2-story, 3-units 1,500 sf

n/a / Matthew Garcia, Besen & Associates

Michael Fornaro / David Davidson, Besen & Associates

The multi-family building sold for $1.1 million.

Financing Address

Size

Borrower / Representative

Lender / Representative

Notes

535 Fifth Ave, 545 Fifth Ave

2 bldgs 36-story, 13-story

Moinian Group / Drew Anderman, Meridian Capital Group

Morgan Stanley / n/a

A $310 million CMBS loan was arranged for the two office buildings.

80 Lafayette St

17-story, 317,500 sf

Corigin Real Estate Group / n/a

Prudential Mortgage Capital Company / n/a

A $161.3 million, 10-year loan was arranged for New York University’s largest dorm.

41 Flatbush Ave (Brooklyn)

230,000 sf development site

Quinlan Development Group and Building & Land Technology / Keith Kurland, JLL

Annaly Capital Management / n/a

A $103.6 million loan was secured for the development site.

201 East 79th St

165-unit co-op

201 East 79th Street Tenants Corporation / n/a

NCB / n/a

An $8 million first mortgage and a $1 million line of credit were arranged for the cooperative.

319 East 50th St

112-unit co-op

319 East 50th Street Owners Corp. / n/a

NCB / n/a

A $3.5 million first mortgage was arranged for the cooperative.

12 West 17th St

11-unit co-op

12 West 17th Street Tenants Corp. / n/a

NCB / n/a

A $1.4 million first mortgage and a $500,000 line of credit were arranged for the cooperative.

9 Jones St

7-unit co-op

Jones Street Owners Corporation / n/a

NCB / n/a

A $1.2 million first mortgage was arranged for the cooperative.

30 Bond St

6-unit co-op

30 Bond Street Owners Corp. / n/a

NCB / n/a

A $1.2 million first mortgage was arranged for the cooperative.

525 West 238th St (Bronx)

69-unit co-op

Fieldston Garden Apartments, Inc. / n/a

NCB / n/a

A $1 million third mortgage was arranged for the cooperative.

14 Jay St

7-unit co-op

14 Jay Street Owners Corp. / n/a

NCB / n/a

A $500,000 first mortgage was arranged for the cooperative.

161 9th Ave

8-unit co-op

161 Ninth, Ltd. / n/a

NCB / n/a

A $400,000 first mortgage and a $100,000 line of credit were arranged for the cooperative.

164 Prospect Pl (Brooklyn)

4-unit co-op

164 Prospect Place Housing Corp. / n/a

NCB / n/a

A $300,000 first mortgage was arranged for the cooperative.

Other Deals WeWork inks 240K sf lease at 85 Broad Street WeWork has leased 240,000 square feet at 85 Broad Street.

The office space provider’s deal at the 1.1 millionsquare-foot, former Goldman Sachs building near Stone Street is the first major lease of the year, according to the New York Post. Asking rents for the space — WeWork inked a lease for the 16th through 18th and 28th through 30th floors — Miguel McKelvey and Adam Neumann, WeWork ranged from the $50s to the mid $60s, according to the Post. Goldman Sachs sold the building to MetLife in 1985 for $74.4 million, according to the newspaper. Last year, Beacon Capital Partners bought a stake in the property for an undisclosed amount. Miguel McKelvey and Adam Neumann’s WeWork was valued at $5 billion in December. The provider of office suites opened its first Midtown outpost last year, when it signed 125,000 square feet at the Durst Organization’s 205 East 42nd Street.

Dolce & Gabbana takes space in Soho firehouse Dolce & Gabbana has bagged a third Manhattan location, at 155 Mercer Street in Soho. The Italian luxury fashion house already has stores on Madison and Fifth avenues, and will occupy all four floors of its new space, a 15,000-square-foot former firehouse owned by Joseph Sitt’s Thor Equities. The rents were not disclosed, but ground-floor rates in the Soho neighborhood have been estimated at up to $800 per square foot, the Wall Street Journal reported. Sitt, who owns 30 properties in the neighborhood, told the newspaper that he has been vying to create ultra-luxury shopping corridors on Mercer, Wooster and Greene streets, with less exclusive retailers on 155 Mercer Street Broadway and Prince and Spring streets. Alongside Dolce & Gabbana on Mercer are luxury retailers Tory Burch, Balenciaga and Versace. “Our vision was to create an outdoor urban shopping environment as opposed to a mall in Soho, to be a southern outpost to be able to serve people from Wall Street all the way up to Midtown,” Sitt said.

HFZ pays $575M for Extell’s UWS rental building Ziel Feldman’s HFZ Capital Group paid $575 million for Extell Development’s the Belnord, a rental building on the Upper West Side. HFZ and Extell entered into contract in December, as first reported

by The Real Deal. The 13-story building, located at 225 West 86th Street and built in 1909, includes 218 rental units, according to the Wall Street Journal.

The price is more than $1,000 per square foot, or $2.64 million per apartment. Extell’s Gary Barnett, 225 West 86th Street together with a group of investors that also included Property Market Group’s Kevin Maloney, paid $15 million for the property in 1994. In the 1930s, the building was foreclosed on by lenders, the newspaper reported. Later on, the landlord and the tenants of the building entered decades of lawsuits and housing complaints. Half of the building’s tenants went on a 16-year rent strike. Separately, HFZ is developing two condominium conversions on the Upper West Side. It’s unclear what Feldman’s plans are for this latest acquisition.

Bloomberg inks lease at SL Green’s 919 Third Avenue Bloomberg LP is expanding into 919 Third Avenue, where it inked a lease for 150,000 square feet of office space. The 47-story building, owned by SL Green, is near Bloomberg corporate headquarters at 731 Lexington Avenue and expansion space that it took several years ago at 120 Park Avenue. The financial media and reporting company is just the latest in a string of moves to Third Avenue, where rents are relatively low.

Bloomberg’s rents will be in the mid $50s per square foot, Crain’s reported, a bargain compared to other Michael Bloomberg midtown neighborhoods, where rents reach the mid $80s. Test preparation company Kaplan recently signed on to take 80,000 square feet at 750 Third Avenue. (The deals in this section were announced after the deadline for the Deal Sheet.)

To view more deals visit our website: www.TheRealDeal.com 118 April 2015 www.TheRealDeal.com

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Binder in a bind After eviction, legal woes and agent exodus, Bellmarc Group left licking its wounds

BY CLAIRE MOSES n less than two years, Neil Binder’s partnership and franchise agreement both very publicly fell apart amid a raft of accusations and lawsuits. Several Bellmarc Group offices were shuttered, including one from which the brokerage was evicted, and numerous agents have fled.

These are tough times for Binder, the founder of one of Manhattan’s largest residential brokerages. But for all his current woes, the Bellmarc head said he isn’t ready to walk away.

In an exclusive interview with The Real Deal, Binder said he’s looking for a new partner and is focused on rebuilding his brand.

“The events that took place had a serious adverse effect on the company,” Binder said, describing the breakup of his partnership with Larry Friedman and Anthony DeGrotta as “an earthquake.” But, he added, “I believe that there are a tremendous number of people in this company who believe in me, and I believe in them.”

I

While Binder called it an “apology” payment, sources said the payment allowed DeGrotta and Friedman to get out of their non-compete agreements.

The two, now at Keller Williams, declined to comment for this story.

Binder denied all of the allegations.

Coldwell pulls the plug Bellmarc is still in a dispute with Coldwell Banker, which sued the firm claiming nonpayment of franchise fees, and moved to cut all ties.

A spokesman said Coldwell Banker Real Estate terminated its franchise agreement with Bellmarc “due to the brokerage’s continued failure to meet its contractual obligations.” Binder claims he stopped paying the fees because Coldwell didn’t provide promised referrals and leads. “My beef with

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Things weren’t always this grim.

In November 2012, Binder reached a deal with Friedman and DeGrotta to absorb their rental brokerage, AC Lawrence Real Estate, which they founded in 2005. The hope was the new Bellmarc Group would be a major player in rentals and sales.

The combination gave Bellmarc clout in the rental market, while giving AC Lawrence the backing of a well-respected residential sales firm.

Just a few months later, in June 2013, national powerhouse Coldwell Banker said it was taking another shot at New York City through a franchise deal with Bellmarc.

Coldwell sank a big chunk of money into the brokerage, and the number of agents ballooned to about 550.

Trouble, however, started brewing swiftly.

Initially, Binder planned to hand over daily operations to his two partners. Entering his early 60s, Binder wanted to focus on writing and being the face of the company.

But instead of letting DeGrotta and Friedman run the show, Binder stayed involved because he thought the duo had their own agenda. He disagreed with AC Lawrence’s aggressive growth trajectory and worried that new rental brokers weren’t being adequately trained. “I didn’t agree with their culture,” Binder said.

Tensions boiled over in August 2014, when DeGrotta and Friedman sued Binder, accusing him of embezzlement and using the firm as his personal “piggy bank.”

The suit was settled in November. As part of the agreement, DeGrotta and Friedman relinquished interest in the company and paid Binder $25,000.

Neil Binder

them is substantial,” he said, “and I’m going to bring them to court.”

The combined troubles have resulted in an agent exodus. In addition, one former Bellmarc broker claimed that Binder still owes him thousands of dollars, and said he wasn’t hopeful about receiving the money. Binder “just laughs in your face,” the broker said.

“With a guy like this, you can’t win.”

The broker also described shouting matches, inappropriate behavior and fighting over the course of “two months of war,” as the AC Lawrence partnership unraveled.

“It almost came to a fist fight.”

Binder downplayed the conflict, insisting there were no screaming matches, but admitting, “I do have a tendency to speak loudly.”

He acknowledged a few people are waiting for checks, but said they had broken “fiduciary responsibility” to the firm, and accused them of bad mouthing Bellmarc to landlords.

And there are other problems, including a suit from Bellmarc’s former phone service provider, Broadview Networks, claiming the brokerage owes close to $1 million.

But Binder promised he’s not going anywhere and is looking for a new partner.

“I’ve had people telling me I’m going under for 35 years,” he said. TRD www.TheRealDeal.com March 2010

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Kushners launch startup to link investors, deals ‘Cadre’ investment platform lures big backing from Fascitelli, Farkas, SL Green

BY HITEN SAMTANI ared and Joshua Kushner, the backers of some of real estate’s hottest tech startups, are now stepping into the ring themselves.

The brothers last month launched Cadre, a real estate investment vehicle that aims to connect institutional investors with opportunities in gateway markets.

J

worth of deals, though he would not provide any specifics on those deals.

Revenue will come through transaction fees and other fees, Williams said.

Williams, an alumnus of Goldman Sachs’ technology and media group and the Blackstone Group’s real estate private equity division, is overseeing daily operations.

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“We’re looking to provide greater access to thoroughly institutional deal flow,” Ryan Williams, co-founder and CEO of Cadre, told The Real Deal. Through the platform, investors can take a crack at specific deals rather than put their money into funds or real estate investment trusts, which don’t allow them to cherry-pick transactions.

Cadre raised $18.3 million in its Series A round, led by Thrive Capital, the venture capital firm founded by Joshua Kushner, and General Catalyst Partners, a venture firm whose investments include Snapchat

product at mobile payments company Square, is leading product development.

The Kushners are strategic advisors.

Jared is the CEO of Kushner Companies, a major NYC landlord, and owner of the New York Observer. Joshua’s investments through Thrive include Warby Parker, Instagram, and real estate startups Hightower, 42Floors, Honest Buildings and Compass. He is also a co-founder of Oscar, the health insurance startup whose playful cartoon ads are all over the subways.

For now, investments made through

The platform enables investors to choose specific deals, rather than put money into funds or REITs that don’t allow them to cherry-pick transactions. and Airbnb. Some of New York real estate’s biggest players, including former Vornado Realty Trust CEO Michael Fascitelli, Island Capital Group’s Andrew Farkas, and SL Green Realty, the city’s largest commercial landlord, also bet on the startup.

The founders began working on the venture in the fall, and secured a $250 million backstop from a large family office. Though Cadre has been in “stealth beta mode,” Williams claimed investors, including family offices and sovereign funds, already used it to close $50 million

the platform will likely be of the proven, income-producing variety, a person familiar with the company said.

It’s been a prolific couple of years for real estate tech startups. A new hopeful sprouts up seemingly every other week, in fields ranging from leasing to market intelligence, and from financing to visualization. Money, of course, has a lot to do with it — since 2012, investors have poured more than $800 million into the space. But there’s also a sense that for an industry that’s long relied on the old-boy network, it’s time. TRD www.TheRealDeal.com March 2010

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Hamptons

from page 60

replacing American pub Barrister’s, which shut down in 2013 when longtime owner Michael Ferran sold the building to a company called M&D Realty for $4 million.

Capri Hotel, Southampton Los Angeles-based attorney-tothe-stars Mark Geragos picked up this 29-room boutique hotel for $4.7 million in February. Geragos is planning to renovate and to tap a new restaurant operator for this season, though he has not yet released details.

Whoever it is will have big shoes to fill, as previous

operators have included Nobu and BLT Steak. Celebs like Howard Stern, Robert De Niro and Donna Karan have all been spotted dining there in the past. Brown Harris Stevens’ Anthony Cerio and Mitchel Natter represented the sellers, a trio of hotel developers.

Dune Deck in Westhampton is reportedly being incorporated into a larger resort nearby.

Dune Deck, Westhampton

Ron Burkle

The Dune Deck Beach Resort, a one-time Westhampton hotspot, reportedly sold last month to Discovery Land CEO Michael Meldman for nearly $19 million, in what several brokers believed to be a direct deal with

Medallion Financial Corp.’s Alvin and Andrew Murstein. The sale price is about 27 times the $700,000 the Murstein brothers paid for it in 2010. Meldman is backed by billionaire Ron Burkle, actor George Clooney, and businessman Rande Gerber. According to the New

York Post, he is partnering with the trio on a 500-acre luxury golf club and residential community near the resort in East Quogue, and Dune Deck will become part of that project. The hotel itself will reopen to guests after renovations, which are expected to take a year or two. TRD

Who to watch in the upcoming season The fresh faces and familiar names making waves in East End real estate

BY TESS HOFMANN ike New York City, the Hamptons real estate world has its own cast of colorful characters. Power players like developers Joe Farrell and Michael Davis — responsible for a slew of multi-million dollar spec homes — are without a doubt still on the scene. And top-level brokers like Corcoran’s Tim Davis and Susan Breitenbach and Sotheby’s International Realty’s Harald Grant remain as active as ever. Here are some of the newbies and some more familiar faces, who have big or controversial projects in the works this season.

L

JBialsky Jay Bialsky, a frequent collaborator with Bespoke and the head of his eponymous development company, called JBialsky, is making his name at the top of the Hamptons luxury market by building spec homes in highly coveted locations.

Bialsky, 48, started the firm more than 20 years ago and has steadily increased its prestige, though the core team has remained small, with six employees. So far his track record is strong: He’s fetching around $20 million per project. Bialsky’s

Bespoke Real Estate This boutique East End brokerage, launched by brothers and former Corcoran agents, Zach and Cody Vichinsky, 30 and 28 respectively, is the first outfit in the area to exclusively represent for-sale properties worth over $10 million. In addition, the brokerage only lists rental properties worth over $200,000 per season.

The firm, which took a group of reporters on a property tour last month, launched in September from an office in Water Mill. The brothers say they use an approach that emphasizes technical land analysis. They also use stylized images captured by a photographer they poached from Architectural Digest.

While some area brokers believe this exclusive approach is effective, 124 April 2015 www.TheRealDeal.com

an environmental review. Collé bought the property in 2006 for $26 million from cosmetics magnate Ronald Lauder and originally planned to build a single mansion on the 40 acres. The homes will sit on lots ranging from a half acre to 2.5 acres, with the rest of the land remaining as reserve. TRD

others doubt that a new firm can thrive while turning away mid-range business.

CORRECTIONS A N D C L A R I F I C AT I O N S Jeffrey Collé

pipeline includes two homes to be built on the former Wooldon Manor property.

One is asking $30 million and is located at 20 Gin Lane, the other is at 24 Gin Lane and listed for $25 million. On Parsonage Lane in Sagaponack, the developer is mid-construction on three adjacent modern homes, together constituting a “compound” on 10 acres of reserve asking $59.9 million. His largest project to date is a nine-home Water Mill subdivision called Atlantic Green that was completed in 2001.

Estates by Jeffrey Collé

Zachary and Cody Vichinsky

A well-established Hamptons’ developer who has worked with clients including Alec Baldwin, Donna Karan and Billy Joel, Collé has been back in the news battling with the East Hampton planning board over his subdivision at 55 Wainscott Hollow Road. The project, which will include seven new construction homes, is finally moving forward pending

The March magazine story “Who’s Preet Bharara coming after next?” incorrectly identified the real estate law firm hired by Leonard Litwin and “Developer 2.” The company is Goldberg & Iryami, not Weitz & Luxenberg. *** The March magazine story, “For the love of leasing,” omitted a large deal brokered by Cushman & Wakefield, thus undercounting the firm’s total amount leased in 2014. The correct total was 9.3 million square feet. *** The March magazine story, “Hitting the sweet spot” incorrectly stated the number of units at 540West. The project on West 49th Street being built by Fortis Property Group and Wonder Works Construction Corp. has 110 units. *** The March magazine Q&A, “Lending in a volatile time” incorrectly stated Matthew Hackett’s title at Equity Now. He is operations manager. *** The March “Development Updates” column omitted Related Sales as marketing the Carnegie Park development on the Upper East Side with Corcoran Sunshine. *** A photo of State Sen. Jeffrey Klein was incorrectly identified in the March table of contents.

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Boom vs. bust from page 51 there were 35 properties sold for $10 million or more, compared with just four a decade earlier, in the fourth quarter of 2004.

In the last year, Miller Samuel began charting an even loftier category of apartments priced at $30 million and up. â&#x20AC;&#x153;Youâ&#x20AC;&#x2122;ve got this new price point that has been created,â&#x20AC;?

Miller said. â&#x20AC;&#x153;It represents a tiny sliver of the overall market, but itâ&#x20AC;&#x2122;s the most visible.â&#x20AC;?

In 2014, the average price of luxury co-ops and condos topped $7.3 million, up 64.4 percent from $4.5 million in 2005.

While some of the price acceleration reďŹ&#x201A;ects an uptick of international demand, land and construction costs have also escalated. â&#x20AC;&#x153;They have to build based on the cost of land,â&#x20AC;?

Miller said.

Todayâ&#x20AC;&#x2122;s land prices demand larger apartments with bigger price tags to generate return. â&#x20AC;&#x153;Developers are paying much more for the land, so they need to get more money [out of the project] to justify the expense,â&#x20AC;? said Richard Anderson, president of the construction industryâ&#x20AC;&#x2122;s trade group, the New York Building Congress.

It may seem counterintuitive, but the resurgence of the ultra-luxury market is a byproduct of the ďŹ nancial crisis. â&#x20AC;&#x153;The market before was all about leverage,â&#x20AC;? said Miller. â&#x20AC;&#x153;Risk was ignored.â&#x20AC;?

These days, fueled by low interest rates, investors in the U.S. and around the world are looking to invest in hard assets. â&#x20AC;&#x153;When you see declines in oil prices, and political instability around the world, people look for safe investments and

Manhattan real estate offers that,â&#x20AC;? said Heym. â&#x20AC;&#x153;It doesnâ&#x20AC;&#x2122;t have a day where it drops 5 percent like the stock market would.â&#x20AC;?

The tech factor + the foreign ďŹ xation A massive inďŹ&#x201A;ux of foreign buyers, along with the growth of the tech sector in Manhattan, has also changed the landscape for the current boom. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s your typical supply and demand equation,â&#x20AC;? said Halsteadâ&#x20AC;&#x2122;s Kliegerman. â&#x20AC;&#x153;If demand increases because of the introduction of a new demographic or buyer, that causes the market to strengthen, because you have a greater pool to pull from.â&#x20AC;?

The boom of the 1990s and early 2000s was driven by the expansion of the ďŹ nancial services sector.

This time around, companies ranging from Twitter to Facebook to Google are part of the economic mix in a serious way. Thatâ&#x20AC;&#x2122;s adding both ofďŹ ce tenants and residents to the market. â&#x20AC;&#x153;Theyâ&#x20AC;&#x2122;re coming, being fairly well paid, and so New York is a much more diversiďŹ ed economy than 10, 15 years ago,â&#x20AC;? said Baruchâ&#x20AC;&#x2122;s Frame. â&#x20AC;&#x153;As long as the sectors that formed the economic base â&#x20AC;Ś perform well, itâ&#x20AC;&#x2122;s hard to imagine a catastrophic change in real estate. I donâ&#x20AC;&#x2122;t think weâ&#x20AC;&#x2122;ll see the 1970s againâ&#x20AC;? when the city faced bankruptcy, crime was rampant and residents ďŹ&#x201A;ed to the suburbs.

As hard as it may be to believe, the Great Recession that began in 2008 was only the fourth-worst recession in the past century, according to an analysis by TRD in 2010.

To be sure, New York City shed roughly 65,000 jobs

between January 2008 and April 2010. But by comparison, the city lost 551,900 jobs during the 70s recession, 195,700 jobs during the savings-and-loan crisis in the 80s, and 113,700 jobs after the World Trade Center attacks.

And Denham said the fact that Wall Streetâ&#x20AC;&#x2122;s ďŹ nancial ďŹ rms have just started to show job growth indicates that the economy is more diversiďŹ ed and employment numbers will â&#x20AC;&#x153;stay robust going forward.â&#x20AC;?

But in addition to the tech sectors, the inďŹ&#x201A;ux of foreign money has also changed the real estate game drastically.

Global economic and political factors are pushing wealthy foreigners into New York real estate, which they see as a safe investment and a place to park cash.

Of course, without that pool of buyers, the market could take a hit. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re charting new ground here because of foreign money. Itâ&#x20AC;&#x2122;s that rush to take money and put it into a stable economy,â&#x20AC;? said high-proďŹ le broker Richard Steinberg, who left Warburg Realty last month for Douglas Elliman. â&#x20AC;&#x153;The boom is going to last much longer,â&#x20AC;? he predicted.

But if world events turn, all bets could be off. â&#x20AC;&#x153;Maybe there is this constant stream of foreign buyers buying these places,â&#x20AC;? said Stijn Van Nieuwerburgh, director of the Center for Real Estate Finance at New York Universityâ&#x20AC;&#x2122;s Stern School of Business. â&#x20AC;&#x153;I just have a basic question of where these people are going to keep coming from,â&#x20AC;? Van Nieuwerburgh said. â&#x20AC;&#x153;It is a bubble, if you ask me. Have we built enough housing for the masses? Probably not.â&#x20AC;? TRD

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The South Bronx from page 76 BRP Development Corp., Hudson Companies, Common of the highest rents in the borough. A one-bedroom new developments, restaurants, rehabbed buildings and Ground, Comunilife, The Kretchmer Companies and ELH fetches around $1,700 a month, a two-bedroom around an easy commute to Manhattan.”

Management. The development will spread across five $2,000. Recently, the apartment complex, on the corner Douglas Elliman broker Charles Brophy was more buildings bordered by Bergen Avenue, Brook Avenue and of Bruckner Boulevard and Lincoln Avenue, had its tempered in his assessment: he thinks activity in the South East 149th Street. It will also house a YMCA and 40,000 rooftop upgraded with new pagoda-shaped garden Bronx is slowly picking up. “I wouldn’t go as far as to say it’s square feet of retail space. Construction is slated to begin trellises and funky furniture, where residents can sit to going to be the next Wililamsburg. But the Bronx is set for later this year and be completed in 2018. enjoy the sweeping views of the Bronx, Manhattan and growth,” he said. “The borough has one of the highest rates Some say these projects have the potential to remake the Harlem River. of unemployment, and with additional retail and potential the South Bronx into a draw for people priced employers moving into the South Bronx, more out of Manhattan, Brooklyn and even Queens. people will be populating the area.”

“There is an insatiable appetite for housing Other neighborhoods are also benefiting and young people will always flock to an edgy from the growing interest in the borough. Along neighborhood,” said Steven Hornstock of the Grand Concourse, New Rochelle-based Manhattan-based ABS Partners, which owns developer Goldfarb Properties plans 184 luxury properties along the Harlem River Waterfront. rentals. The amenities there will include a 24A case in point is the first-ever privately hour doorman and a fitness center — add-ons financed condo building in the gritty Mott more typically found in Manhattan and Brooklyn Haven neighborhood. Local brokers say not neighborhoods than in the South Bronx. And the SCOTT HIRSCHFIELD, ARIEL PROPERTY ADVISORS long ago, developers and residents would have nearby New Deal-era Bronx General Post Office, bypassed this section of the borough. But when a former What’s more, the menus of a burgeoning restaurant recently purchased by Youngwoo & Associates and the print shop was converted last July into the Bronx Bricks, scene along Bruckner Boulevard provide hints to the Bristol Group for $19 million, will soon house new retail an 11-unit condominium complex on 140th Street, the changing nature of the neighborhood. At the Mott Haven and eateries. building sold out within a few months. Prices ranged from Bar & Grill, specialties include quinoa black bean burgers On City Island, Manhattan-based developer Greystone $395,000 for a studio and up to $789,143 for a three- and Israeli salads; a restaurant called Ceetay offers Asian recently launched a waterfront 43-unit condo building. bedroom loft (which broke a South Bronx record with a fusion food; and a soon-to-open coffee shop nearby will It’s the first residential development there in more than 15 $900,000 listing). double as a tapas bar. years. Prices are estimated to start at $478,000.

There are hints that gentrification is already taking hold “I think Mott Haven has all the makings of the next “”The Bronx is finally getting its piece of the economic in this neighborhood.

Williamsburg,” said Marlene Cintron, president of the pie,” said Cintron. “We’re not going to stop until every Lofts in the nearby Clocktower building boast some Bronx Overall Economic Development Corp. “There are neighborhood in this borough benefits.” TRD

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China from page 22 $300 million, Swills said. The investors snacking on the lobster were prime targets.

He’s planning another Asia road trip for this spring.

Min Chan, a lawyer, and a broker with City Connections Realty, said meeting in person clearly helps, but noted that you “can’t just breeze into town three times a year and expect to succeed.”

She said real estate presentations — often hosted by brokers based in China working on behalf of a New York player — are usually followed by epic meals.

These meals, she said, can have 12 courses, “and you can’t really tell if they are lunches or dinners” since they unfold over several hours.

Chan, who lives in New York but has family in China, noted that it’s not uncommon for those multi-course banquets to take place every night during a business trip to China.

“You have to be willing to drink a lot and try a lot of interesting food. It’s such a cultural shock for a lot of people, even for me, and I’m Chinese,” said Chan, who’s setting up an EB-5 regional center, which is a for-profit group that pools funds through the program. Such centers market development projects, essentially selling securities to interested investors.

While the alcohol flows freely, Chan will usually skip it in favor of fresh melon juice. “I’m terrified of going to these banquets,” she added. “But if you don’t go, you don’t give them face time.”

Of course, developers are also interested in pitching their finished New York products to buyers in China.

To that end, so-called “migrant agents” will often host presentations on behalf of New York developers in their

offices. And, they also typically roll out the red carpets to do so.

While EB-5 is enormously popular, some have grown frustrated with the long time lapses that often accompany EB-5 investments, Chan said.

As a result of those concerns, Chan said she’s seen a slight drop-off in EB-5 interest. So some real estate brokers are going back to the basics and selling finished products: New York condos.

Indeed, a few months ago, an agent in Beijing who Chan works with transformed her office to accommodate private seminars.

Now high-net-worth buyers can relax in large white leather couches in front of a stage where presentations are given about the latest Midtown high-rises, before being wined and dined at a fancy restaurant. “It’s a very impressive set-up,” Chan said. TRD

the suit, which seeks $1 million in compensatory damages.

Corcoran CEO Pam Liebman referenced the competition from Compass during a March 5 interview with TRD. “I’m a big believer in what we’re doing here and we have traditionally had more top brokers than any other firm,” she said. “So if I was doing a startup, who do you think I’d go after? I’d start at Corcoran.”

In the suit, Corcoran alleges that former Soho manager Gene Martinez lured nearly 30 managers and sales agents to Compass, and used confidential information to bring listings and business opportunities with him. Adding insult to injury, Martinez told Corcoran he was going to work for Compass’ Miami office. It turned out, he was planning to work in its New York office, located less than two miles away, the suit states. (According to Compass’ website,

Martinez is now director of sales and business development for Miami and Washington, D.C.) As for Brennan, he is the former senior managing director of Corcoran’s Park Slope office. His departure, and the move of two others from the same office, poses a threat to the firm’s Brooklyn business, Corcoran said.

Despite a provision in Brennan’s termination agreement not to solicit Corcoran employees, Corcoran caught Brennan doing that very thing, the suit states. The suit adds that Brennan and Martinez shared information with Compass that led to Compass hiring 28 Corcoran agents.

Corcoran said Brennan admitted in his resignation email that he downloaded information from the firm’s computer that was not entirely personal.

Hiten Samtani contributed to this report.

Meeting migrant agents

Corcoran vs. Compass from page 38 to prevent Martinez from working for Compass. “There is not a chance in hell that I would issue that TRO,” the judge said.

In a statement, Corcoran said the firm does not comment on ongoing litigation.

In a follow-up statement, Compass said, “No agents should feel trapped by the threat of being sued just for exercising their independence and deciding to change firms.”

In a similar suit filed last year, Compass was sued by Citi Habitats, which claimed someone from Compass hacked into Citi Habitats’ proprietary listings database and used information to poach top brokers.

“Compass has simply shifted its focus from Citi Habitats to Corcoran and launched a larger scheme of misappropriation, breaching contracts and unfair competition in an effort to take down Corcoran’s New York operation,” according to

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from page 46

Justin Kitrosser, 34, and Jared Seeger, 32 Co-founders, Knightsbridge Park n the world of new development marketing, it is becoming increasingly important for sellers to get noticed online, a notion that Justin Kitrosser and Jared Seeger, co-founders of the digitalmarketing firm Knightsbridge Park, have seized upon.

“It’s fascinating, I think a lot of people wonder if with a $9 million apartment, people are actually going to the Internet to find condos,” Kitrosser said. “The answer, somewhat surprisingly, is, ‘Yes.’” In order to deploy a marketing strategy aimed at well-heeled buyers, firms including Douglas Elliman, Corcoran Sunshine Marketing Group, Rudin Development and HFZ Capital have tapped Knightsbridge Park to craft their search-engine optimization strategies, handle online advertising and measure the efficacy of their campaigns.

Part of what Knightsbridge does, Seeger explained, is manage those “creepy ads that follow you around once you visit a site.”

“There are good ways to do it and there are bad ways to do it,” he said, explaining the better method involves limiting the amount of time an ad sticks around.

Kitrosser, who previously worked as a

I

Knightsbridge Park founders Justin Kitrosser, left, and Jared Seeger found a niche in providing digital marketing campaigns for high-profile projects.

marketing director at Elliman and a project manager at Corcoran, and Seeger, who has a background in public relations, founded the company in 2010.

And it appears they’ve filled a void in the market.

Before Knightsbridge was born, no

SELECT LISTINGS

such service existed in the luxury consumer space, Kitrosser said. But, Seeger said, there’s a “sea change” in the industry in the last two years.

“It used to be just early adopters and people who had a digital background and could be convinced,” he said. “Now, clients are seeking us out.”

Knightsbridge has crafted digital campaigns for some of the city’s highest-profile projects, including Rudin Management and Global Holdings’ Greenwich Lane, the Alexico Group and Hines’ 56 Leonard and Macklowe Properties’ 432 Park Avenue.

“Four-three-two is its own animal,” said Richard Dubrow, Macklowe’s head of mar-

keting. “In terms of publicity, there have been 400 articles about it internationally.

[Knightsbridge] helps us see who’s coming to the site, and to a certain extent where they’re coming from. It’s a lot of work.”

Marci Clark, the director of branding and marketing for JDS, said Knightsbridge is “ahead of the curve” when it comes to helping firms have more control of their image online.

“It’s crucial to be deliberate in your online presence and functionality,” she said. “Owning digital space is increasingly important, as more homebuyers utilize online tools in their search, including for multimillion-dollar, ultra-luxury apartments.”

Dana Moskowitz, 34 President, EVO Real Estate Group hen billionaire investor Andrew Farkas’s global commercial real estate network NAI Global was looking for a member in New York City, it chose the EVO Real Estate Group, a tenant-focused brokerage and office-space manager.

The person in charge of integrating EVO into that network is company President Dana Moskowitz. She also oversees a staff of about 25 brokers and runs day-to-day operations at the company, which leases and manages some 4 million square feet of commercial space.

She took the helm of the company in 2013, working with her father, Ira Fishman, and two other partners to rebrand the former Winoker Realty, which they purchased after the sudden death of founder David Winoker.

Jay Olshonsky, president of NAI Global, said the company felt secure knowing Moskowitz was at the helm.

“We were always very impressed with Dana. In particular, we thought she was certainly the next generation of a family-run business,” he said. “There are a lot of issues with succession planning when you’re talking

W

132 April 2015 www.TheRealDeal.com

Dana Moskowitz, president of EVO Real Estate Group, is tasked with integrating her firm into the NAI Global network.

about the aging of commercial real estate.”

Moskowitz said she absorbed commercial real estate while growing up. Her father spent 26 years as a broker at Newmark & Co. before heading to Winoker.

“It was dinner-table talk,” she said. TRD www.TheRealDeal.com 2012 00 PHOTOGRAPH OF MOSKOWITZ BYJanuary TOBIAS TRUVILLION

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from page 60

luxury condo market on fire, new owner Joe Chetrit may have the key: Plans call for residences asking $4,791 per square foot on average, a premium over office prices in the area.

The Chetrit-led investor group, including Clipper Equity’s David Bistricer, beat out 20 other bidders in 2013, paying $1.1 billion for the building. The developers put down a $100 million deposit. They subsequently landed $925 million in financing for the deal from SL Green Realty, plus a $600 million mortgage from Bank of China.

Sony’s three-year lease, which ends next year. By the time Chetrit empties and renovates the building, source noted, the luxury residential market could turn.

But brokers still say they believe the project will be a runaway success.

The building’s commercial space — some 300,000 square feet — gives the developer an extra financial buffer, should the residential market turn. Taking a page from One57, Chetrit is likely to convert the bottom floors into a hotel. At One57, Extell sold the 210-room Park Hyatt hotel to Hyatt

At the time of the sale, Sony negotiated a threeyear lease for an undisclosed sum. But the rent will cover Chetrit’s real estate taxes, the building’s operating expenses and mortgage debt service, according to Robert Ivan- David Bistricer hoe, chair of the global real estate practice at the law firm Greenberg Traurig, which represented Sony in the deal.

Hotels Corporation for $390 million.

At 550 Madison, sources said the retail and hotel components could be worth a combined $400 million to $600 million.

There is precedent for that price range, too. Last year, Vornado and Crown Acquisitions paid $700 million for the retail condo at the St. Regis Hotel. And Harry

“Trophy properties used to have to be an assemblage of a couple of apartments, created by the purchaser. Now, you have developers who are creating trophy properties.”

SHAUN OSHER, CORE Plans call for the building to be converted into luxury condos, a hotel and high-end retail. The residential portion will include 96 apartments, for a total projected sellout of $1.8 billion. The sprawling 21,504 square-foot triplex penthouse will ask $150 million, as TRD exclusively reported. While that price tag has astounded many in the industry, at $6,975 per square foot, it’s actually less on a per-square-foot basis then the penthouse at 520 Park Avenue.

Sources said the project’s break-even price for selling units is close to $3,000 per square foot, making its profit margins “somewhat tighter” than comparable, ground-up developments. Another risk is

Macklowe is in contract to buy the nearly 75,000-square-foot retail space at 432 Park Avenue for $450 million.

“The retail is extremely valuable,” said Faith Hope Consolo, chairman of Douglas Elliman’s retail leasing and sales division.

She said monthly rents on Madison Avenue above 57th Street top $1,800 per square foot, while rents below 57th Street, where the Sony building is located, are roughly $1,000 per square foot. In two years, she said the ground-floor retail at 550 Madison “could easily be $1,500 per square foot.”

“This is a trophy property in one of the best locations in the city,” she said. TRD

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A P R I L Commercial Real Estate Women of New York’s Charitable Fund presents its annual “Spring Cleaning” luncheon in support of Bottomless Closet. The event asks participants to donate used business attire to Bottomless Closet, a nonprofit that provides business clothing, interview training and career support for economically disadvantaged women aiming to enter the business world. Luncheon from 11:30 a.m. to 2 p.m. at Club 101, 101 Park Avenue at 40th Street. Fee: Free for members with prepaid lunch package;$100 for members without prepaid package; $100 for other CREW chapter members and NYBC Council of Industry Women’s Organizations; $120 for nonmembers. Further information, including additional donation locations, and registration: www.crewny.org.

7

CALENDAR 1 2 3 4 5 6 7 8

The American Institute of Architects, N.Y. Chapter, hosts a Sustainable Design workshop in conjunction with DPC Continuing Education. Courses will focus on the use of passive solar energy, LED lighting and designing solar-based LEED buildings. Featured speakers include James Perling of Dow Building Solutions, Arpan Bakshi of Skidmore Owings & Merrill, William Amann of M&E Engineers and Anthony Musso, passive house consultant. 8 a.m. to 5 p.m. Event continues April 10. At the Holiday Inn Midtown, 440 W 57 Street. Fee: $399. Information and registration: www.dpcceinc.com.

9

9

The NYU School of Professional Studies Schack Institute of Real Estate hosts its 20th anniversary REIT Symposium. The event will examine the trends and developments in real estate investment trusts over the past 20 years and where REITs are heading. The keynote speaker will be real estate mogul Samuel Zell and will also feature discussions with Jonathan Gray of Blackstone Group and Barry Sternlicht of the Starwood Capital Group and others. 8: 15 a.m. to 4 p.m. at the Pierre Hotel, 2 East 61st Street. Fee: $795. Information and registration: www.scps.nyu.edu/academics/departments/schack.

11 12 13

15 16 17 18 19 20

The Appraisal Institute, Metropolitan N.Y. Chapter, presents the course “Business Practices & Ethics.” Topics include mortgage lending, litigation, property tax appeals and professional ethics. The instructor will be David Scribner of the Zicklin School of Business at Baruch College. 9 a.m. to 5 p.m. at the Association of the Bar of the City of New York, 42 West 44th Street. Fee: $195 members; $215 nonmembers. Information and registration: www.aimetrony.com.

21

The Cooperator presents, “The Co-op, Condo and Apartment Expo.” Hundreds of products and services will be on display for New York City board members, shareholders, property managers and apartment building owners. At the New York Hilton Hotel, 1335 Avenue of the Americas. Fee: Free with advance registration. Information and registration: www.cooperatorexpo.com.

21

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138 April 2015 www.TheRealDeal.com

The Institute of Real Estate Management hosts a Subway Series outing. The evening at the ballpark will feature a game between the New York Mets and the New York Yankees, along with food and drinks. 5:30 p.m. to 10 p.m.

At Yankee Stadium, 1 East 161st Street, Bronx. Further details and registration: iremnyc.org.

24

10

14

15

The American Institute of Architects, N.Y. Chapter, hosts “Corporate Glory & Heroic Capitalism: The Architecture of Criss and Cross” in conjunction with the National Arts Club. Historian Ann Walker will be the featured speaker. Discussion will focus on the architecture of brothers John and Eliot Cross, who worked to reshape the New York City skyline from the 1910s to the 1940s. 8 p.m. to 9:30 p.m. At the National Arts Club, 15 Gramercy Park South. Information and registration: www.aiany.org.

22

The New York Association of Realty Managers presents its annual gala. Award recipients include Peter Finn of the Realty Advisory Board, which will receive the James F. Berg Peace Prize; Kenneth Lovett, president of the Lovett Group of Real Estate Companies who will be honored as Best Management Company of the Year and Robert Andrzejewski of the Charleston Condominium, who will receive the Residential Manager of the Year award. 7:30 p.m. to 12:30 p.m. At Leonard’s of Great Neck, 555 Northern Boulevard, Great Neck, N.Y. Fee: $315 for members; $450 for nonmembers. Information and registration: www.nyarm.com.

24

The American Institute of Architects, N.Y. Chapter, presents “Edge Living: Micro Units and Live/ Work Spaces.” This is the third in a discussion series led by president Tomas Rossant, called “Dialogues from the Edge of Practice.” This event examines the intersections between architecture, innovation and the responsibilities of the practitioner.

Sponsors include Arup, FXFowle, and Pei Cobb Freed & Partners. 6 p.m. to 8 p.m. At the Center for Architecture, 536 LaGuardia Place. Fee: Free for members and students; $10 for nonmembers. Information and registration: www.aiany.org.

27

The Real Estate Lenders Association hosts its annual “Thomas E. Sasso Memorial Golf Outing.” The full-day event includes a brunch, cocktail hour and dinner with awards. Available sponsorships range from $550 to $15,000. 10 a.m. to 6 p.m.

Westchester Country Club, West Course, 99 Biltmore Ave., Rye, N.Y. Fee: $360 for golf members; $485 for non-golf members; $135 for dinner only. Information and registration: www.rela.org.

27

The Real Estate Board of New York hosts its 71st annual “Sales Brokers Deal of the Year Cocktail Party.” The sales brokers committee will present its Most Ingenious Deal of the Year awards. 5:30 p.m. to 7:30 p.m. At the 101 Club, 101 Park Avenue. Fee: $60 for members and nonmembers.

Information and registration: www.rebny.com.

28

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

LUXE Crown Heights continues to heat up, but at a cost. Brownstoner reports: “Renters upset about insane ConEd Bills to heat Crown Heights luxury building.”

Can’t spare a square: Two UES millionaires, Philippe Delouvrier (right) and Soros Fund Management partner Ravi Yadav, go to court in a battle over inches of property between their neighboring townhouses.

Daily News RE editor Kathy Clarke (left) tweets at NY Post RE reporter Jennifer Keil, accusing Keil of “shamelessly” ripping off her story about $51M Jeff Blau UES townhouse buy.

In Vogue interview, “Ivanka Trump knows what it means to be a modern millennial,” and divulges that the secret to romance is … real estate.

Ivanka lays it on thick for Fredrik Eklund: With ads like this, #TheSell should be called #TheHARDSell

Luxe Downtown Brooklyn building 66 Rockwell Place concludes what amenities renters want most: Book clubs, poker tournaments and cooking classes.

The longest lingerer: 60 Warren Street’s 10,900 sq-ft PH finally sells for $24.5M, after 1,600 days on the market and a $4 million price cut. One reason for the big lag? Seller Edward Bazinet once said “there are no cozy areas” in the glassy pad.

This roof is on figurative fire! Sloping zigzag party in the sky at building slated for Bushwick’s Rheingold Brewery site will have fire pit, outdoor BBQ areas, hiking course, urban farming area and dog run.

Nutty Nest Seekers agent & screen star Ryan Serhant poses nude for Flaunt Magazine in almost comically phallic photo series featuring a strategically placed bowl of nuts, erect candlesticks and an ass shot to rival Kim K’s.

Greenpoint gets hotter --yet more annoying: An entreprenuer is seeking funding for a retail hot sauce tasting room, complete with a hot sauce “sommelier.”

“Words are not my thing. I’m a realtor, not a poet.”

StreetEasy launches brilliant ad campaign

WIN

FAIL

We are family?

Developer Jed Walentas divulges he has called his father “David” since age 2.

We are family? Robert Reffkin, co-founder and CEO of brokerage Compass, divulges his mother, a real estate agent with 16 years of experience, works at competing firm Charles Rutenberg.

“My husband’s idea of a date night somehow always involves me looking at a development site.”

Aural Pleasure: An audiovisual installation called Soundscape New York, at the Museum of the City of New York, combines the actual sounds of iconic NYC interiors, like Grand Central Terminal and the t e Guggenheim, Gugge e , with t visual sua animations projected on a panoramic screen.

Verizon Fios launches campaign #NeverSettle promoting its videochat product featuring a daft realtor in “Flipside Stories” who laments how difficult it is to describe a property to a client.

We are unsure why rebellious real estate brokerage “access property group” eschews all capitalization and most punctuation on its website.

On “A Fine Blog,” Halstead agent Andrew Fine declares Third Avenue between 83rd and 84th NYC’s “healthiest block,” highlighting SoulCycle, Juice Generation, Juice Press, Just Salad and Exceed Physical Culture. The neighborhood Krispy Kreme lasted only a few months, he notes.

Apartments.com gets rebranded, dusts off Jeff Goldblum as spokesperson “Brad Bellflower” and coins word “Apartminternet” in what we can only coin a trifecta of fail.

The Village Voice offers LOL-worthy alternatives to pricey NYC apartments, including: a food cart, yurt, party bus, ambulance and the vestibule at Warren 77 #TheRentIsTooDamnHigh (and so are the Voice writers!)

The despicable trend of Native Advertising hits our industry: IFC comedy series Portlandia, blatantly sponsored by Zillow, dedicates whole episode “House for Sale” to real estate, each skit featuring all sponsored content. #MakeItStop

Highly rated flick “Wild Canaries” namechecks Douglas Elliman when a rent-controlled tenant in a Brooklyn building dies mysteriously and her real estate mogul son is suspected of murder.

LOW RENT 140 April 2015 www.TheRealDeal.com

Genius parody “The Jinx Podcast” and companion Twitter feed @thejinxpodcast launch to poke fun at HBO docu-series and Mr. Bob, with episode titles like “Eyebrows Shmybrows.”

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COMINGS & GOINGS Elliman nabs No. 1 Warburg agent Steinberg

Movers and shakers

ichard Steinberg, who with $100 million in sales a year was Warburg Realty’s top-producing broker, left the firm for rival Douglas Elliman, at a time when changes at the top have created a schism in Warburg’s culture.

Both Warburg and Steinberg characterized the move as amicable, and said it was motivated by Steinberg’s desire to work in markets such as Palm Beach, Florida; Aspen, Colorado; and East Hampton, where the veteran Manhattan-based broker owns homes and Elliman has offices.

“He wants a platform which will allow him to do business in all those markets,” Warburg President Fred Peters said. “I love Richard… but I get it, people’s lives change.”

Steinberg said, “I have the utmost respect for the firm and Fred.”

Though he left on good terms, Steinberg’s departure will hit the 120-year-old firm hard, coming on the heels of internal changes at the firm, including new marketing, branding and technology. Last year, Fred Peters’ daughter, Clelia Peters, joined the firm as director of strategy and innovation, after a stint at Boston Consulting Group. In a March 19 email to staff, Fred Peters gave a nod Richard Steinberg to concerns that his daughter has been a “lightning rod for much of the discomfort.” He added, “What’s going on here is ultimately MY plan, borne out of my perception that the world was changing and we had to change with it or be left behind.”

Warburg agents had more than $1 billion in sales each of the last two years. The firm has roughly 110 agents and four offices, but has seen agent depatures. In the fall, former sales director Robert Doernberg decamped to Brown Harris Stevens, and in recent months, 10 agents followed him.

Fred Peters said the exits reflect both current market dynamics and Warburg’s internal changes. “I have never seen such a period in which there was so much [agent] movement,” he said. “Change shakes people up, and sometimes it shakes people out, and not everybody remains aligned as the vision changes.” By E.B. Solomont

Colliers International hired Frank Lynch to head the firm’s New York City operations as managing director. Previously, he was senior property manager at Tishman Speyer Properties. Lynch will be responsible for business development, the firm’s strategic platform, property Fra F Frank rank Lynch Lyn yn nch ch operations, and implementation of third party management services for New York City properties.

Related Companies named Jennifer Tuhy chief financial officer of Hudson Yards. She joined Related in 2001 and has held positions including a project accountant for Related’s New York development division, a controller for CityPlace and Related Urban and vice president of development.

Jennifer Tuhy Most recently, she served as senior vice president of Related’s accounting and finance functions. Prior to Related, Tuhy worked at Tishman Speyer Properties and PricewaterhouseCoopers.

Savills Studley promoted Jeffrey Peck and Will Silverman to executive managing directors, and David DiPietro to senior managing director. Ralph Cali was promoted to corporate managing director and Lance Leighton and Gabe Marans were named Will Silverman managing directors. David Dwight and Christopher Foerch were made associate directors, and John Harte and Jason Roberts received the title of assistant director.

Heather Kahn joined Boston Properties as vice president of leasing in the New York Jeffrey Peck region. Previously, she worked at Fisher Brothers, where she served briefly as assistant director of leasing, and at Paramount Group, where she was as an assistant vice president of leasing.

Vincent Tuminelli joined Cresa as a principal.

Previously, he was executive managing director at Colliers International Group. Prior to Colliers, he worked at CB Richard Ellis, Cushman & Wakefield and Studley. He has completed over 20 million square feet of real estate transactions over the course of his 30Vincent Tuminelli plus years in commercial real estate.

Brown Harris Stevens tapped 30-year real estate veteran Christopher Infante to work in the firm’s Park Avenue office as a licensed associate real estate broker. Prior to joining the firm, he was a broker at Corcoran, where he also oversaw two sales regions and managed nine offices and hundreds of sales agents.

The Greystone Bassuk Group promoted 40-year veteran Drew Fletcher to executive vice president.

He joined the firm in 2013, after 14 years at Edison Properties, most recently as chief financial officer.

Plaza Construction hired Michael Kalafut as vice president and project executive.

Michael Kalafut Prior to joining the firm, Kalafut served as vice president and project executive for Skanska USA Building.

Previously, he was a vice president/project executive at Lehrer McGovern Bovis from 1988–1997.

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HAP eyes IPO on Tel Aviv Stock Exchange AP Investment Developers hopes to launch an initial public offering on the Tel Aviv Stock Exchange later this year, the latest in a line of New York City developers going to Israel for capital.

HAP is looking to raise $30 million, or roughly 120 million shekels, in an offering slated for the fourth quarter of 2015. The firm issued a draft prospectus last month, as first reported by Israeli newspaper Calcalist.

CEO Eran Polack said the firm was considering a bond offering before Extell Development and Brookland Capital raised a combined $305.5 million last year. That offering marked the first time U.S.-based developers sought funding for domestic projects via the Israeli market.

“Money is flowing [into Israel] from mutual funds and pension funds,” Polack said.

“We have a very good reputation in Israel and have done business there for 20 years.”

HAP has developed more than 20 condominium projects in Israel, he added.

The firm was looking to launch the offering earlier this year, but shareholders decided to wait amid news of the Related Companies and GFI Capital Resources Eran Polack Group announcing plans to seek $200 million on the stock exchange last month.

“We are waiting for the appropriate market time,” Polack said.

H

Polack, Amir Hasid and Nir Amsel launched HAP in the 1990s with investments in Kiev, Budapest, Hungary and later Tel Aviv. In the latter location, the firm is known as HAP Services Israel.

HAP, which frequently collaborates with architect/designer Karim Rashid, is at work on four midsize projects in Manhattan and a $400 million, 42-story residential tower in Jersey City. By Mark Maurer

Jim Gricar out as president of Halstead alstead Property President Jim Gricar left the residential brokerage last month. Sources indicated that his contract was up, but was not renewed.

Gricar announced plans to depart in an email circulated to Halstead agents and staff on March 11. “We’ve had fun, made money and, most importantly, helped thousands of our clients move in or move on,” he said in the note.

Halstead’s higher-ups sent a memo a short time later wishing Gricar well. The missive was sent from David Burris, Kent Swig, Arthur Zeckendorf and William Zeckendorf, co-chairmen of Halstead’s parent company Terra Holdings, as well as Terra COO Alan Kersner.

Gricar was named president in 2013, when Halstead Jim Gricar CEO Diane Ramirez became the firm’s first-ever chief executive officer. Ramirez had been president of Halstead for 14 years, after co-founding the firm in 1984 with Clark Halstead.

Terra Holdings acquired the brokerage in 2001. It also owns New York City brokerage Brown Harris Stevens and Vanderbilt Holdings, a residential mortgage broker.

Halstead is the third-largest brokerage in Manhattan, with more than 720 agents, according to TRD’s most recent ranking, published in May 2014. At that time, Halstead had $666 million in listings.

A Cleveland native, Gricar moved to New York to be an actor in 1989. He joined the Corcoran Group in 1998 and later jumped to Brown Harris Stevens, where he handled a number of deals in Zeckendorf Development’s 15 Central Park West. By E.B. Solomont

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142 April 2015 www.TheRealDeal.com

Also on the move Melanie Gladwell, the former president of business consulting firm 360 Solutions, joined Servcorp as senior vice president of the New York area … Billy Long joined Concierge Auctions in the firm’s Land and Ranch Division … Anisa Saroop was hired by Brown Harris Stevens as a licensed associate real estate broker. She previously worked at Corcoran ... Cathy Tweedy joined Saunders & Associates’ Bridgehampton office from Corcoran. Compiled by Andrea Cetra

Suits with sass WE H E A RD

From “Casablanca” to “The Producers,” real estate lawsuits are cuing the drama

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awsuits often come with their own theatrics, but a spate of recent New York real estate cases has invoked a different kind of

L

drama: Show business.

Take for instance an agreement the brokerage Compass signed with Siras Development to market units at Hudson Rise, a 47-story mixed-used tower in the Hudson Yards area that Siras is building with Kuafu Properties and Blackhouse Development.

In a lawsuit filed late last month against its partner Kuafu, Siras injected a reference to the famous moment in “Casablanca” when Captain Renault professes to be “shocked, shocked to find that gambling is going on in here!” immediately before being handed his winnings.

Siras was referring to an email Kuafu principal, Sang Dai, wrote saying he was “totally shocked” to learn that Siras had hired Compass to market some of the condo units without notifying him.

Additionally, another suit involving 45 John Street recently cited the Broadway show “The Producers.”

A “Casablanca” reference added some color to a recent real estate lawsuit. Right, a suit involving 45 John Street cited the Broadway show “The Producers.”

In that case, Chun Peter Dong, who owns a large stake in the Financial District building, sued his partner, investor Chaim Miller, claiming Miller embezzled a down payment of nearly $14 million and never informed him about a $66 million deal to sell the property.

“The facts recited herein detail the fraudulent escapades of defendants Miller and [partner Samuel] Sprei, who have

Is the North Fork the new Brooklyn?

A rustic vibe and farm-to-table eateries are drawing hipster buyers from Kings County dotted with small vineyards, farm-to-table restaurants and microbreweries — is going through a “Brooklynification.”

“The same things that attracted people to Brooklyn are present in the North Fork,” said Kristopher Pilles, managing partner of East End Luxury, a residential brokerage based in Riverhead.

And that is translating into big business. Last year, the number of home sales in the North Fork surpassed 2005 levels — the height of the real estate bubble — according to a decade-long survey by the brokerage Douglas Elliman. And real estate pros working in the area agree that some of these buyers have a common origin: Brooklyn.

“Brooklyn has become much more desirable, so naturally our more affluent buyers are coming from that area, as well as everywhere else,” Pilles said.

Just as bourgeois-bohemian Manhattanites colonized Brooklyn’s spacious brownstones, educated urban

Noah’s in Greenport is a farm-to-table eatery.

t has been a cold spring but the hunt for second homes on Long Island’s North Fork is hardly chilled.

The low-key alternative to the Hamptons — which is

I

emulated the roles of Max Bialystock and his accountant in the Mel Brooks production, ‘The Producers,’” Miller’s suit said. “Bialystock sold the ownership of a Broadway show multiple times over to unwitting investors.”

Cue the sinister laugh for the next case involving the 75-year-old Sybil Goldrich, who invested money with Morton Olshan, the patriarch of one of New York’s top real estate families, when she was 19. According to Goldrich’s suit, she was among a group that helped Morton purchase six buildings early in his career.

“Mrs. Goldrich is no longer a teenager and … she would like to realize the value of her long-ago investment in the form of a sale profit or steady income from these valuable buildings,” Goldrich’s lawyers stated in the December suit.

The Olshans, the suit claimed, attempted to buy out investors “in a manner evocative of villains in old films like ‘Shane’ and ‘It’s a Wonderful Life,’” by giving investors lowball offers for their ownership stake. By Jennifer White Karp

professionals are shunning the glitzy Hamptons for the North Fork’s small-town atmosphere, where they enjoy local produce served up at farm-to-table restaurants like Noah’s in Greenport and the North Fork Table & Inn in Southold.

The trend was even parodied in HBO’s “Girls.” Last season’s infamous “Beach House” episode helped cement the North Fork’s connection to privileged Brooklynites in the minds of many.

“I can’t believe we’re in the Hamptons,” says Shoshanna, played by Zosia Mamet, as she steps off a bus in the episode’s opening.

“Oh no, this is the North Fork. It’s very different than the Hamptons,” Marnie, played by Allison Williams, fires back.

“It’s, you know, for people who think the Hamptons are tacky, and don’t want to be on a beach that’s near a J. Crew.”

At least in this case, life imitates art. Sheri Clarry, a North Fork-based broker with Corcoran, said her Brooklyn clients regularly bring up the episode. And while she doesn’t think Brooklyn residents are buying second homes because of a TV show, the episode has drummed up interest.

“There are tons of Brooklynites on the North Fork. I call it Brooklyn-on-the-sea,” Clarry said. By Christopher Cameron This story first appeared in Luxury Listings NYC

...and if you’re listing in Brooklyn, mention the “farmer’s market” The must-use terms by borough when putting a property on the market f you are listing a property, don’t underestimate the power of a nearby farmer’s market, French doors or kitchen cabinet space.

In Brooklyn, hipster buyers focus on aesthetics and organic produce. Phrases such as “farmers market,” “exposed brick,” “white oak” and “French doors” hit home, according to real estate listings website StreetEasy, which looked at thousands of listing descriptions to determine which expressions resonate with buyers.

In Manhattan, buyers like phrases such as “kitchen cabinetry” and “pin drop,” while those in the Bronx seems to be more family-minded, with buzz words like “living room,” “dining room” and “eatin kitchen” attracting buyers to new apartments, according to the report, which was written about by Curbed. Queens’ residents seem to be the least picky, as long as they’re close to a subway stop. “Minutes away,” “short walk” and “subway lines” were phrases that helped listings sell quickly in that borough.

Timing is also key when selling an apartment in the city. For example, if a seller is looking to unload a property in Brooklyn, February is the opportune month to list it. In Manhattan and Queens, however, demand is highest in April. By The Real Deal staff

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144 April 2015 www.TheRealDeal.com

Brooklyn’s Grand Army Plaza farmer’s market.

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THE CLOSING

HOWARD LUTNICK Howard Lutnick was thrust onto the national stage when the Sept. 11 attacks killed 658 of his employees, including his brother. The Cantor Fitzgerald CEO became one of the most recognizable faces of 9/11, and rebuilt the financial services firm against all odds. Lutnick took a public beating for cutting off pay to his employees’ relatives after the attacks, but by 2006, the firm had donated $180 million to them. On Lutnick’s watch, Cantor Fitzgerald made a massive move into real estate in 2009, when it launched Cantor Commercial Real Estate, a finance division that originated $10 billion in loans last year. In 2011, Cantor Fitzgerald affiliate BGC Partners purchased commercial real estate brokerage Newmark Knight Frank, as well as assets from Grubb & Ellis, both for undisclosed sums, to form Newmark Grubb Knight Frank.

NAME: HOWARD WILLIAM LUTNICK

BORN: JULY 14, 1961 HOMETOWN: JERICHO, NEW YORK MARITAL STATUS: MARRIED CHILDREN: FOUR You lost both parents to cancer at a young age. What was life like before and after?

My dad was a professor of history at Queens College, and my mom was teaching art at C.W. Post [now Long Island University]. It was sort of a classic academic, suburban youth. And then things changed. My mom was diagnosed 146 April 2015 www.TheRealDeal.com

with breast cancer and later lymphoma. She died at 42.

When [doctors] gave her six months to live, she said, “What are we doing standing here?” She lived like a comet. She would go to India and then come back and start yelling that I hadn’t done my homework. My dad died about 18 months after my mom. He takes me to college [at Haverford in Pennsylvania], and then goes to get his first chemo. The nurse makes a mistake and gives him 100 times the dose and kills him. From there on, the world’s just different.

You were 18. What about the rest of your family?

It’s me, my brother [who was 15] and my older sister.

My extended relatives pull out. They’re afraid ... they’ll invite us over and we won’t leave. At my dad’s funeral, my dad’s brother asked me what I was doing for Thanksgiving.

I said, “Aren’t you worried about how I’m going to eat tonight?” I never spoke to him again.

How did that experience shape you?

It made me resourceful, taught me not to rely on others.

We had to take care of my brother. There was a period of time when I was going to drop out of college. [But] Haverford said [they’d] provide my education for free.

What was your first job?

I was an Eastern-ranked tennis player [in college].

Between my freshman and sophomore years, I taught tennis in California. I still play twice a week.

How’d you land at Cantor Fitzgerald?

Junior year, I worked on Wall Street, at Noonan Astley & Pearce. They bought a company, Telerate, from Bernie Cantor. When it came time to graduate, Bernie Cantor offered me a full-time job.

Why are you interested in real estate?

The biggest markets in the world are bonds, then stocks, then real estate. Interest rates are just irrationally low, so the bond business is under enormous pressure. [But] real estate loves low interest rates.

What is the biggest misconception about you?

When Bernie Cantor went on life support, his wife decided

that she wanted to sell the company. The story that was written at the time was “Young buck pushes out widow and takes company.” You sort of get used to the fact that people will say, “Oh yeah, he’s a tough guy.” I know what they mean. But they didn’t read the court case, which was absurd in every possible way.

What is it like to be the face of Sept. 11?

If I go out to dinner, someone will come up to me and say they know a widow or a family. It’s really incredible.

Isn’t that hard?

To those who have had loss, memory is the most beautiful of your senses. So memory and time takes out the pain.

Do you have regrets?

Sure. I wish we were never in the World Trade Center.

I wish my brother never came to work for me. I wish I never hired all my friends.

Do you get tired of people asking you about 9/11?

Never. Every Sept. 11 … our employees waive their day’s pay and we donate all of the revenue that comes in the door.

We try to make the worst day something extraordinary.

Do you have vices?

I work a lot. Otherwise I’m a boy scout. I have the best wife.

It’s unbelievable that she agreed to marry me.

How did you meet?

On a blind date. She was a Legal Aid attorney in Brooklyn, and a college friend of mine set us up.

What do you carry in your pockets?

A friend gave me a $2 bill for luck. I always have it on the outside [of my billfold]. I generally also have my phone and my glasses. The idea of wearing them down on your nose is such a bummer. You can’t hide. You’re just old.

If you could choose anyone to have dinner with, who would it be?

My dad. I could talk to him about academics, explain who I am. It would be extraordinary. By E.B. Solomont PHOTOGRAPH FOR THE REAL DEAL BY ERIN PATRICE O’BRIEN www.TheRealDeal.com July 2006 00

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