The Real Deal New York

The top 10 real estate stories of 2012

December 31, 2012 01:30PM
By Gabrielle Birkner

From left: WTC,  the cast of MDLNY (top), the dangling crane atop One57 (bottom) and Barclays Center.

In 2012, One57 rose, and Dewey & LeBoeuf collapsed. The World Trade Center topped out, and Manhattan Apartments bottomed out. The Barclays Center brought stars to Brooklyn, and Bravo TV made celebrities of a trio of telegenic brokers. Read on for our choices for the top 10 real estate stories of the year.

Hurricane Sandy packs a punch

A house in the Rockaways, after Hurricane Sandy

The so-called “superstorm” that bore down on New York City in the early morning hours of October 29 killed more than 100 people along the Eastern seaboard — 43 in New York City alone — damaged or destroyed nearly 400,000 homes in the tri-state area, and left millions without power and basic services. Hurricane Sandy also dealt an unprecedented blow to the city’s public infrastructure — causing the longest weather-related shutdown in the history of the subway system. Parts of Staten Island and the Rockaways were among the city’s hardest hit residential neighborhoods. And in Lower Manhattan, Sandy shuttered as much as 35 million square feet of downtown office space. Six weeks on, some 11 million square feet of downtown office remained closed, according to figures compiled by the real estate services firm Jones Lang Lasalle. (Despite the flooding experienced in New York’s coastal neighborhoods, Mayor Bloomberg remains a proponent of developing the city’s waterfront.) Among the most enduring images of the storm: the crane that was being used to build Extell’s luxury residential tower One57 — broken and dangling precariously above Midtown.

One57 rises

One57 rising in Midtown

Not since architect Robert A.M. Stern’s neoclassical tower rose at 15 Central Park West has an apartment building created such a buzz. But One57, the glassy condo tower going up at 157 West 57th Street, is poised to become as instantly iconic as its limestone neighbor. Designed by the Pritzker Prize-winning architect Christian de Portzamparc, the Extell Development project overlooking Central Park has been billed as a “billionaires’ club,” due to the sheer number of building buyers who rank among the world’s wealthiest individuals. In February, Extell launched sales, and there are reportedly now more than $1 billion worth of condominiums currently under contract at One57. The two penthouses — one 11,000-square-foot apartment on the highest floor and another, even larger unit with a glass-screened terrace a few floors below — are both under contract for upward of $90 million, making them the priciest New York City homes ever sold. The building’s first 30 stories will be a Park Hyatt Hotel. The 60 top floors will be luxury condos, which are expected to begin closing late next year. Real estate observers said they do not expect that the high-profile crane collapse at the construction site to deter buyers.

Barclays Center opens

Brooklyn’s Barclays Center

Brooklyn hadn’t had a major league sports team since 1957, when the Dodgers decamped for Los Angeles. The Barclays Center, an 18,000-square-foot SHoP Architects-designed arena that opened in September in Prospect Heights, has changed that. The Nets, the NBA team formerly of New Jersey, opened their season at Barclays as the rebranded Brooklyn Nets. And in October, the NHL’s Islanders announced that they would be moving to the borough, from Long Island, in 2015. The arena, a major component of Forest City Ratner’s long-awaited Atlantic Yards project, gives the city another large concert venue; Jay-Z, Barbra Streisand and Leonard Cohen have all performed there since it opened. And already, real estate brokers have reported the stadium influencing demand for retail space in the surrounding area. Late this year, ground was broken nearby on Atlantic Yards’ first residential tower, which will rise 32 stories and house 181 below-market-rate units and 182 market-rate apartments.  The developer plans to use modular construction on the 11 residential buildings planned for the site.

1 WTC tops out

1 World Trade Center, in the Financial District

For years after the September 11 terrorist attacks, ground zero was little more than a hole, quite literally, in the heart of Lower Manhattan. But the site where nearly 2,800 people died in the worst terrorist attack on American soil is coming back to life. The centerpiece of ground zero’s glassy new towers is 1 World Trade Center, which rises a symbolic 1,776 square feet. The building topped out in August, and its 408-foot spire was lifted to the top of the building in December. Leasing at the World Trade Center complex was generally slower this year than it was in 2011, when the publishing giant Condé Nast signed for 1.1 million square feet at 1 World Trade Center. The most notable World Trade Center lease this year was that of the U.S. General Services Administration, which in July agreed to take 270,000 square feet — a long-awaited deal that brings the 1 World Trade to more than 50 percent full. Read The Real Deal’s comprehensive report on World Trade Center leasing here.

“Million-Dollar Listing New York” premieres

Ryan Serhant, right, with a client on “Million Dollar Listing New York”

The network that transformed housewives into “Housewives” is turning New York real estate agents into celebrities, too. Bravo’s “Million Dollar Listing New York” premiered March 7, and almost immediately made stars of Nest Seekers International’s Ryan Serhant, and Douglas Elliman’s Fredrik Eklund and Michael Lorber. The first season followed the telegenic salespeople as they navigated Manhattan’s luxury real estate market — the demanding clients, the competition for listings and the challenges of selling apartments in a building that is still under construction. The show hasn’t just raised the agents’ profiles; it has increased the demand for their real estate services, forcing them to grow their teams and hire on new agents. Bravo has green-lit a second season of the show. It will star Serhant, Eklund and, for the first time, Keller Williams NYC’s Luis D. Ortiz; Lorber, the son of Elliman Chairman Howard Lorber, will not appear in the second season, sources told The Real Deal.

Manhattan Apartments shuttered

From left, Jerry Weinstein, founder of Manhattan Apartments, Larry Friedman and Anthony DeGrotta, co-founders of A.C. Lawrence

Nearly three decades after it was founded, Manhattan Apartments, long one of New York City’s largest rental brokerages, shut its doors this year. At its peak, the company had some 250 agents. Its closure comes amid financial and legal troubles for the Midtown-based firm, founded and run by the charismatic Jerry Weinstein. By late this year, though, sources told The Real Deal that Weinstein’s company hadn’t paid agents in months and that it “owes millions” to other firms and to its former salespeople. Manhattan Apartments’ remaining agents were offered spots at another rental-focused brokerage, AC Lawrence — a division of the Bellmarc Group. In addition, AC Lawrence took over the 11,000-square-foot lease at the former Manhattan Apartments headquarters, located at 729 Seventh Avenue, near Times Square. AC Lawrence’s decision to take on Manhattan Apartments’ agents and space ends a long-running legal dispute between the two companies over a business relationship gone bad. On Dec. 12, The Real Deal broke the story of Manhattan Apartments’ closure.

666 Fifth Avenue retail trades for $707 million

From left, Jared Kushner of Kushner Companies, Vornado’s Steven Roth and 666 Fifth.

Five years after the Kushner Companies paid $1.8 billion for the office tower at 666 Fifth Avenue, the company in July sold the building’s remaining retail condo to Vornado Realty Trust for a whopping $707 million. That sale came about a year after the Spanish fashion company Inditex paid $324 million for the building’s other retail condo. While the Kushner Companies, which owns 51 percent of 666 Fifth, is thought to have made up to $120 million in the Vornado retail sale, the office portion of the building has accrued operating losses of $200 million, an analysis by The Real Deal showed. In August, The Real Deal published a scorecard of who won and who lost in the Vornado retail deal, as well as a timeline of major developments at the property since its 2007 sale to Kushner.

City proposes Midtown rezoning

SL Green’s 1 Vanderbilt

The Bloomberg administration wants more office towers near Grand Central Terminal. And in a move that could transform the city’s skyline, the Department of City Planning in July unveiled a proposal to rezone portions of Midtown East. Under the plan hailed by the Real Estate Board of New York and viewed with skepticism by some preservationists, developers could build taller and bulkier structures than are currently permitted. Earlier this month, office landlord SL Green unveiled renderings of its planned 1.6-million-square-foot office tower in the neighborhood, called 1 Vanderbilt. As The Real Deal reported, the rezoning would require larger developers to negotiate complex deals with smaller firms in order to assemble parcels with a large enough footprint on which to build.

Domino Sugar factory trades hands

Domino Sugar factory, Williamsburg

Two Trees Management, the firm known for bringing luxury housing and cachet to Dumbo, reached a deal in June to purchase the former Domino Sugar refinery along the Williamsburg waterfront for $185 million. CPC Resources sold the 11-acre property, eight years after it bought it with the intention of building a $1.4 billion mixed-use development that included hundreds of affordable housing units. Two Trees is reportedly seeking major design changes to CPC’s proposal, and the company has yet to say the extent to which its plans would include affordable housing. The developer, which owns or manages some $3 billion in residential and commercial properties, according to Crain’s, recently began meeting with community members to get feedback on the site’s redevelopment.

Dewey & LeBoeuf files for bankruptcy

Former Dewey & LeBoeuf attorneys, now at Venable

In May, hundreds of millions in debt, Dewey & LeBoeuf — once a major force in New York real estate law — filed for bankruptcy. Its Chapter 11 filing marked a dramatic end for the firm, which at its peak employed some 1,400 lawyers, including dozens in its real estate practice. Even before the bankruptcy, there were signs of trouble. Nearly all of its real estate attorneys, including Stuart Saft, the prominent head of its global real estate practice, had left the company for other firms. Dewey’s downfall, sources told The Real Deal, was its practice of recruiting new partners with guaranteed seven-figure salaries; when the economy tanked and transaction volume declined, that payroll proved unsustainable. The firm had nearly 500,000 square feet at 1301 Sixth Avenue; some of that space has since been leased by the law firms Chadbourne & Park and Fragomen.

Other major stories of 2012

Rendering of Hudson Yards

Hudson Yards breaks ground on its first tower; the leather purveyor Coach signs on to become that building’s anchor tenant. … Construction begins at 432 Park, which when completed will eclipse One57 as the city’s tallest residential tower. Ekatarina Rybolovleva, the daughter of a Russian billionaire, closes on Sanford Weill’s $88 million 15 Central Park West apartment18 Gramercy Park marks another success for the developers behind 15 Central Park West. …  In the closely watched Brompton case, an appeals court interprets the Interstate Land Sales Disclosure Act in favor of the Related Companies. … A block from One57 Extell plans another major residential tower, where New York City could get its first Nordstom … New York Attorney General takes legal action against the former National Arts Club head. … Rushmore buyers receive some $15 million in payouts before an escrow agent stops payment. … New York City gets its first $100 million apartment listing.

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