SouFun Holdings, a Chinese property website based in Beijing, plans to spend $46 million to acquire a former training center of American International Group in Manhattan, with the purchase expected to be completed in the first half of 2011. The training center includes a 250,000-square-foot building at 72 Wall Street, one of a pair of adjoining AIG properties purchased last year by Youngwoo & Associates and Korea-based Kumho Bank. In 2009, Youngwoo and Kumho paid $150 milliion for 72 Wall and neighboring 70 Pine Street. SouFun, which has 65 offices in China, said it will partner with selected universities and colleges in the U.S. to train its expanding management, staff and clients in the former AIG center. [China Knowledge]

Buying and selling loans on distressed properties has become a thriving business in New York’s commercial real estate market. While statistics aren’t available on the volume of distressed real estate loan sales, industry officials say they’re on the rise, the Wall Street Journal reported. The latest example of this is a partnership of California investors who bought a stalled Brooklyn Heights condominium development at 20 Henry Street and is restarting construction after nearly two years of inactivity. Developer Urban Realty Partners defaulted on its loan from Bank of New York and the project’s equity partner, American International Group, collapsed during the financial crisis, sources said. Now a partnership, known as the Canyon-Johnson Urban Fund, bought the loan and took control by cutting a deal with Urban Realty and AIG Bank of New York sold the note at a roughly 25 percent discount to the unpaid loan balance. “During the past three months, activity has become more frenzied,” said David Schechtman, a principal at Eastern Consolidated who brokered the transaction. “Prices have come down but buyers are no longer demanding fire-sale prices.” [Wall Street Journal]

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Embattled real estate developer Kent Swig is set to ink a deal to sell
140 William Street for $11.5 million within the next few weeks, the
Wall Street Journal reported. It was unclear who was buying the
seven-story, 48,000-square-foot building, but experts suggested it
would likely be turned into condos. Though Swig had been hoping to get
$14.2 million for the vacant downtown property, the $239 per square
foot price is better than what other buildings downtown have fetched
recently. Only two buildings in the area changed hands last year, both
owned by American International Group; AIG sold 72 Wall Street for $37
million, or $114 a square foot, and 70 Pine Street for $113 million, or
$103 a square foot. The $11.5 million sale is likely to make only a
dent in Swig’s debt since there are at least $50 million in judgments against him for a variety of failed projects,
and Swig has hinted in the past that he may file for personal
bankruptcy. Most recently, Swig was reportedly in danger of losing 80 Broad Street after one of his lenders foreclosed
on the property last week, because Swig had defaulted on the $12
million loan. [Crain's]

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The Alliance for Downtown New York has come out with a new study on how
to transform the dated Water Street into a more vibrant and
pedestrian-friendly scene. According to the Downtown Express, the study
says leases in many of the street’s office buildings will expire over
the next five years, which puts local businesses and landlords in
jeopardy if tenants opt to move out.
Among the major Water Street tenants are Standard & Poor’s, A.I.G.
and law firm Sullivan and Cromwell. To keep them there, the Alliance
suggests creating more diversity in retail, dining and public spaces in
an effort to be led by the public sector. That includes re-scaling the
streetscape, strengthening its connection to its history and to the
waterfront, realigning public and ground-floor spaces and extending
hours of activity, said Liz Berger, president of the Alliance. [Downtown Express]

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Manhattan-based Kushner Companies is looking to buy AIG’s equity stake in a 17,000-apartment portfolio, according to Bloomberg news, as the insurance giant faces mounting pressure to pay back its $182.3 billion government bailout. Kushner had sold off the collection of apartments in 2007 for $1.9 billion, in what Jared Kushner, son of company founder Charles Kushner and a principal with the firm, described as a “strategic shift” away from suburban property ownership. The sale came on the heels of Kushner Companies’ purchase of 666 Fifth Avenue for $1.8 billion — which, at the time, was the most ever paid for a single building in the country. Kushner has offered between $165 million and $190 million for the equity interest, according to sources close to the deal. The portfolio of properties includes mostly middle-income, suburban apartment buildings in Pennsylvania and New Jersey. [Bloomberg]

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From the May issue: Last month, one of the market’s most reliable indicators showed that Midtown landlords are still suffering — even as brokers claimed the period of steep rent declines in Manhattan was over. The effective rent — a closely guarded slice of data that measures how much office leases are worth when free rent and other landlord concessions are factored in — fell in the first three months of the year in Midtown’s Class A buildings, after rising over the fourth quarter of 2009.
Many brokers saw the decline in effective rents as the last gasp of the recession, but others said prices might fall for the foreseeable future. [more]

Lower Manhattan, the country’s best-performing office market, is struggling to hang on to its title as vacancies mount. Though the Financial District fared relatively well during the commercial property slide, demand is no longer keeping up with increasing inventory. Goldman Sachs, American International Group and Bank of America are among the major tenants relocating, which follows the flight of firms like Lehman Brothers after Sept. 11, 2001. Goldman Sachs is moving to its new West Street building and vacating 2 million square feet offices including 85 Broad Street and 1 New York Plaza. AIG last year sold its 70 Pine Street and 72 Wall Street headquarters. Bank of America, meanwhile, is moving its employees into a new Midtown tower at One Bryant Park, and it remains to be seen what will happen to the World Financial Center offices of Merrill Lynch, which it acquired last year. Cushman & Wakefield expects Lower Manhattan’s vacancy rate to hit 14 percent by late next year — the highest since 1997 — and the 4.4 million square feet of office space planned for the two new towers going up at the World Trade Center isn’t helping that metric. “The amount of space that’s potentially going to come to the market will increase availabilities and put pressure on pricing,” said Kenneth McCarthy, who heads New York-area research for Cushman & Wakefield. [Bloomberg]

The year 2009 was a trying time to be a real estate broker, developer or investor, but it never lacked for news. In the aftermath of the financial crisis, the industry watched in awe — and sometimes horror — as residential sales ground to a virtual halt, condo projects stopped in their tracks, office rents shrank and retail stores disappeared. Buyers at buildings like 22 Renwick sued to get out of their contracts, and some were granted the opportunity to back out of their contracts. Meanwhile, an amazing cast of characters — from Kent Swig to Harry Macklowe to Lev Leviev — publicly fought for survival. There were also glimmers of hope, from the opening of the High Line in June to the expansion of Halstead Property into Connecticut to the sale of Former Lehman Brothers CEO Dick Fuld’s sale 16-room co-op apartment at 640 Park Avenue for $25.87 million, almost $5 million more than he bought it for two years ago. Click here to see The Real Deal staff’s picks for the stories that most altered the New York City real estate landscape in 2009. [more]

It must have been a very bad dream, which lasted the entire year. Yet
it actually happened: little or no activity took place in commercial
real estate in 2009. For those investment sales brokers who were so busy in 2006 and 2007
making mucho dinero, 2009 was a time to travel to Bora Bora for a
vacation since business was nonexistent. A leading sales broker, who preferred to remain anonymous, shared his struggle over the past year. “I was lucky,” he said. “I had one sale during the year. It was the
sale of a retail condominium in the Village. Two years ago I was the
broker of the year at my firm and now I have enough to pay for
Starbucks.” Another senior investment broker didn’t sound any more optimistic. [more]

An AIG joint-venture firm requested a subpoena for CB Richard Ellis vice chairman Darcy Stacom for a videotaped deposition in its $25 million counterclaim against Kushner Cos. The firm, East Coast Residential Associates, wants to depose Stacom in
the case that stems from the 2007 deal in which it purchased 16,800
rental units located mainly in southern New Jersey and Pennsylvania,
for $1.9 billion. According to court documents obtained by The Real Deal, Judge
Martin Schoenfeld has ordered Stacom to appear for the deposition at 10
a.m., Oct. 21. Michael Fazio, attorney for East Coast, told The Real Deal that the subpoena would be served within the next day or two. Kushner Cos., the Florham Park-based real estate developer led by Charles and son Jared Kushner, also the publisher of the New York Observer, originally sued East Coast Residential in 2008, claiming it failed to hire 11 property managers that oversaw the rental properties in the portfolio. [more]