Even as the land sales market has improved in Manhattan overall, the number of developers actively trying to put together sites remains just a handful, far fewer than during the boom. One of the city’s leading professionals in the business, Dov Hertz, an executive vice president at Gary Barnett’s Extell Development, spoke with Insights from The Real Deal about the current number of deals he believed are underway in Manhattan, and about the time someone backed out of a deal to sell air rights.

Hertz leads the acquisitions arm of Extell, one of the most prolific residential developers in the city. He has led or had a hand in Extell’s major assemblages, including two projects still under development, the 34-story International Gem Tower at 50 West 47th Street and the 74-story Carnegie57, at 157 West 57th Street, spanning the mid-block between Sixth and Seventh avenues and 57th and 58th streets. He has also put together sites for completed residential towers, including the 110-unit Lucida, at 151 East 85th Street; the Ariel East and West; and the 22-unit 535 West End Avenue.

In addition, Robert Knakal, chairman of investment brokerage Massey Knakal Realty Services, weighs in on how many sites are being assembled now, and where they are located. [more]

The Real Deal takes an exclusive look at Related Companies’ detailed model of the first three office buildings and retail anchor mall planned for its 26-acre site at Hudson Yards. 

Jay Cross, president of Related Hudson Yards, talks with Insights from The Real Deal in the video above about the rental and sales prices per square foot he is offering to prospective office tenants as the “early-bird special.”

The architectural model includes a rendering of a 2.5 million-square-foot office tower, a smaller 750,000-square-foot office building and a mixed-used high-rise with 1.2 million square feet of office space. All are on 10th Avenue between 30th and 33rd streets.

The model also shows the 500,000-square-foot retail space at the base of the towers. These buildings are expected to be delivered between 2015 and 2017.

In addition, Robert Knakal, chairman of commercial brokerage Massey Knakal Realty Services, says there was a large amount of activity in the Hudson Yards submarket last year, totaling $1.1 billion in commercial sales.
[more]

There were more than $6 billion in note sales in New York City last year, much of it in the form of distressed development sites, investment broker Robert Knakal, chairman of Massey Knakal Realty Services said, based on estimates of his firm’s activity and market research.

“Note sale activity was probably on the order of $6 billion to $7 billion,” in 2010, Knakal said, in an interview for Insights from The Real Deal. (See video above.) He estimated banks, developers and investors lost a total of about $5 billion to $6 billion because of the distressed sales.

Because note sales are private transactions that are not required to be recorded publicly, in contrast to property sales, there is no government or independent database that tracks them.

Total commercial property sales in Manhattan for 2010 was $15.3 billion, according to Eastern Consolidated, up 164 percent from 2009, when it was $5.8 billion.

Several brokers interviewed said they believed the number of note sales grew over 2010.

J.D. Parker, vice president and regional manager for investment sales firm Marcus & Millichap, which focuses on sales below $50 million, said his office’s volume of distressed mortgage transactions grew from just a few in the fourth quarter of 2009 to more than 10 in 2010. His office’s advisory work quadrupled, to reviewing about $200 million in notes in the last quarter compared with about $50 million in the same period in 2009.

“Banks are finally coming to grips with taking the loss,” he said, and more are willing to sell their notes.

Data from Real Capital Analytics indicated there were more note sales in 2010 compared with 2009, based on the number of first mortgage sales that resulted in property sales. But the research company cautioned the numbers were not complete because of the private nature of note sales.

There were 12 such property transactions worth more than $908 million combined in 2010 that Real Capital tracked, compared with one sale in 2009 valued at $35 million.

Some of the 2010 sales included CIM Group paying $305 million for the former Drake Hotel site on Park Avenue and 56th Street, and Savanna Partners acquiring 386 Park Avenue South for $42.3 million. [more]

A development site located inside the Hudson Yards redevelopment area at 431-439 West 37th Street has sold for $18.7 million, according to commercial real estate services firm Holliday Fenoglio Fowler, which represented the buyer, an LLC called Jackson Development. The site will likely be used for a 12-story, 110,700-square-foot luxury residential building, according to the brokerage. It was not immediately clear when Jackson Development will break ground on the site, located between Ninth and 10th avenues. Holliday Fenoglio Fowler was not immediately available for further comment. TRD [more]

Experts say the weak commercial real estate sales market was supported in part over the past year by low interest rates. But that environment began to change two weeks ago when interest rates jumped by nearly a quarter of a point. In this week’s installment of Insights from The Real Deal, Robert Knakal, chairman of Massey Knakal Realty Services, said the rise in interest rates will push real estate prices down. “A buyer is going to have to offer less money if they still want to maintain the rate of return that they need to achieve on that particular property,” Knakal said. And although interest rates were by no means the only factor in selling a property, it is possible higher rates could lead some sellers to pull properties off the market. “If a seller can’t achieve the price that they need to achieve in order to sell,” he said, “they may take the properties off the market.” (Have a comment about The Real Deal’s new Web feature? E-mail Lauren Elkies at le@therealdeal.com.) [more]

In this week’s installment of the new program Insights from The Real Deal, Robert Knakal, chairman of investment sales firm Massey Knakal Realty Services, says he anticipates a rise in distressed asset sales over the next 12 months. That would continue an upward trend that began this year, following a slow 2009 in which few commercial properties that were in default, foreclosure or bankruptcy, traded hands. “In 2009, the volume in the distressed asset area was very low, primarily because banks were simply not in a position to deal with their distressed assets,” he says. “We fully expect that activity in 2011 will be significantly in excess of 2010.” (Have a comment about The Real Deal’s new Web feature? E-mail Lauren Elkies at le@therealdeal.com.)

[more]

In the second installment of the new interview program Insights from The Real Deal, Robert Knakal, chairman of investment sales firm Massey Knakal Realty Services, discusses the impact of last week’s elections on commercial real estate in New York City. Now that the Republicans have control of the United States House of Representatives and will likely gain control of the New York State Senate, he says he expects to “see tax policy that will have positive implications for real estate values moving forward.” In addition, Knakal says the possible increase in the capital gains tax rate from 15 percent to 20 percent is driving a large number of sellers to unload properties before the end of 2010. And with the GOP likely to win back the state Senate, he anticipates a package of 12 tenant-friendly bills passed by the Assembly last year “will face significant challenges getting through the Senate.” (Have a comment about The Real Deal’s new Web feature? E-mail Lauren Elkies at le@therealdeal.com.)

[more]

Robert Knakal hosts the first installment of The Real Deal’s insights into the New York real estate marketplace, examining land values in the city (see the video above or click here). In 2009, there were 73 development sites sold in the city, a far cry from the market’s peak in 2006 and 2007 when hundreds of sites were sold, Knakal said. But the numbers so far in 2010 have already exceeded the totals in 2009, he pointed out. “The land market most adversely affected has been the Bronx,” Knakal said. This is because “affordable housing funds coming from the city have all but dried up,” he explained. The Queens submarket was surprising, in that there was a 26 percent increase in land value in 2010 from 2009, while the number of land sales occurring in the borough was down about 25 percent. In Manhattan, the amount of buildable square footage of development sites has nearly tripled so far this year in comparison to last year. Knakal, chairman of Massey Knakal Realty Services, predicted that in the future, that market would see an increase in land value. (Have a comment about The Real Deal’s new Web feature? E-mail Lauren Elkies at le@therealdeal.com.)

[more]

Paul Massey

Investment sales brokerage Massey Knakal Realty Services began interviewing candidates to head its new mor [more]

TIAA-CREF in, Pfizer out at 685 Third Avenue

After a series of companies threw their hats in the ring for the purchase of Pfizer’s 685 Third Avenue, retirement group TIAA-CREF has closed on [more]