The Real Deal New York

Paydirt: Kushner’s “Wally Edge” bromance, new development hopscotch, transparency’s big fail … & more

The industry news you need to know to start your week, and what’s ahead

September 26, 2016 10:30AM
By Hiten Samtani

From left: Jared Kushner, 45 East 22nd Street, and 100 Barclay

From left: Jared Kushner, 45 East 22nd Street, a screenshot of Rentlogic and 100 Barclay

UPDATED, 2:30 p.m.. Sept. 26: Transparency is apparently overrated: “I’ve never been in the position where I thought providing detailed information about the market is a bad idea,” Gary Malin, president of Citi Habitats’, told TRD at the start of September. He was referring to the firm’s new partnership with RentLogic, a startup that tracks building violations and complaints to help tenants understand the buildings they’re considering renting in.

Having access to one of the city’s largest databases of rental listings — Citi Habitats TRData LogoTINY has about 18,500 — would have put RentLogic well on its way, with founder Yale Fox hoping the move would inspire other brokerages to follow suit.

But landlords in this town are quick to show brokerages who’s boss. To begin with, Citi Habitats decided to only share intel about listings that received good grades, telling the New York Times that he was “an advocate for some of these owners who believe some of this information might be inaccurate.” But even that didn’t fly: Just eight days after the partnership launched, it was dead. Daniel Charles, a spokesperson for the brokerage, told the Gray Lady that landlords were “upset” and made it clear that “‘we don’t want you guys participating in this.”

Admittedly, there were kinks in the process that needed to be worked out. Anyone can call 311 to register a complaint, warranted or otherwise, and trigger-happy tenants can file complaints that appear in the listing data (these complaints do not affect grades unless they are recorded as violations). Moreover, RentLogic’s database, like the Public Advocate’s much-maligned “Worst Landlords” list, doesn’t account for the fact that many violations happened on a previous owner’s watch. But instead of working with the startup to ensure the reports were clear about these flaws, Citi Habitats decided to run for the hills. After all, they know which side their bread is buttered on.

Benchwarming: Back in 2010, developers faced with a tepid luxury market engaged in a frenzy of brokerage-swapping. It became common for developers to replace brokerages on their new developments, a sort of Hail Mary before addressing the real issue: pricing. Six years later, it looks to be happening again, at least when it comes to the city’s two biggest new development marketing firms.

In April, Ben Shaoul’s Magnum Real Estate Group tapped Corcoran Sunshine to market the pricey condos at 100 Barclay, replacing Douglas Elliman. “You want a fresh set of eyes on your product when so much is happening all around you,” Shaoul said at the time. He declined to provide sales figures at the time.

And last week, it was Corcoran’s turn to be benched in favor of Elliman, when Ian Bruce Eichner decided to switch it up at 45 East 22nd Street. Eichner insisted that both sales and foot traffic at the new development, where the current listings are priced at an average of $3,500+ a foot, were robust.  He too, declined to provide specific numbers.  Elliman said the project was over 60 percent sold — mind you, it was already 50 percent sold nearly a year ago — and Fredrik Eklund took to Instagram to trumpet the assignment with one of his signature whimsical posts. “And I can’t wait to show you what we are doing with her, what we will unveil,” he wrote. No word yet on whether that unveiling will include price cuts.

FAR out: The Pfizer HQ at 235 East 42nd Street is a fascinating illustration of the complexities of the Midtown East rezoning. Going by its current floor-to-area ratio of 10, the 650,000-square-foot building is overbuilt by nearly 300,000 square feet. But all the buildings around it have a FAR of 15, and if it were granted that FAR, it’s overbuilt by just over 100,000 square feet. A FAR of 15 for the property would change the mechanics of how much it needs to contribute to the city’s public improvement fund as part of the rezoning proposal. REBNY operatives argue that the Pfizer building should get the FAR bump for free: it’s only fair to put it in line with its neighbors, they say. Check out Katie Brenzel’s story for the full debate and the fuzzy math behind it.

K for vendetta: Kushner Companies CEO Jared Kushner is on the witness list for the Bridgegate trial. Though he may not be called to testify, how he got on the list is fascinating.

New York magazine has a corker of a read on David Wildstein, the star witness in the Bridgegate trial. The piece details the ties between Wildstein and Kushner, who bought Wildstein’s influential and catty politics news website PolitickerNJ in 2007 . Kushner affectionately described Wildstein as “a wild man,” invited him to his wedding to Ivanka Trump, and planned a media empire around him. Wildstein, according to NYMag, also understood how his new boss wanted him to cover Chris Christie, who Kushner had loathed ever since Christie put his father, Charles Kushner, away.

“In 2009,” a former Observer employee told NYMag, “the site [PolitickerNJ] exists to destroy Chris Christie.” There’s more than a little resemblance to that tale and the saga of the “Big Dick Mack” story, a hit piece Kushner commissioned on Richard Mack.

Wildstein, under the moniker Wally Edge, invoked Machiavelli when announcing the sale. Though he was referring to himself, his words could so easily apply to Kushner, a former Democrat who is now Donald Trump’s main man. “Whosoever desires constant success,” Wildstein wrote, “must change his conduct with the times.”

(Read more from Paydirt here.)

This post was updated to clarify the role 311 complaints play in RentLogic’s database.