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From the July issue:Double-dip fears notwithstanding, the real estate industry is seeing a resurgence of private equity investment. But this time around, firms who got burned during the financial crisis are taking a different tack.

Instead of doing deals on a one-off basis, with a different developer on each deal, a growing number of private equity funds are forming exclusive agreements with experienced developers through new, independent real estate operating companies in New York City and elsewhere. In an environment where many see enormous potential for growth, these investments give private equity players a leg up on the competition, and a chance to share in higher profits (known as the “promote”) if the project succeeds.

Deals structured in this way are not new; in 2003, for example, the now-defunct developer Clarett Group and Prudential Real Estate Investors formed Clarett Capital LLC, a real estate development company.

But more and more private equity firms are now investing at the general-partner level. [more]

Rendering of 340 Court Street and a photo of the development site

A long-stalled Carroll Gardens development is back in play thanks to a new set of developers, Patch reported. Prudential Real Estate Investors and Boston-based developer Davis Companies partnered to restart construction at 340 Court Street, where for more than three years plans have been in place for a 30- to 40-unit condominium. Originally the home of the once-powerful International Longshoreman’s Association, the Clarett Group demolished the old structure and worked with the community to push forth plans for a 70-foot residential building. [more]

Extell’s Gary Barnett, Pamela Samuels, now of Trio Partners, and Carnegie57

Extell Development, one of the city’s biggest real estate firms, is scheduled for a court
hearing next Tuesday, amid allegations that the company’s president, Gary Barnett, fired one
of his top executives, Pamela Samuels, and later refused to pay her millions of dollars because he claimed none of the 17 projects in which she held equity were profitable. Samuels, in a suit filed late February in New York State Supreme Court, alleged that
Extell and Barnett committed fraud, unjust enrichment and breach of contract and she
also demanded they pay her remaining salary of $1.1 million. Lawyers for Extell filed
a motion Monday demanding the case go to arbitration and scheduling a May 10 court
hearing. [more]

From left: Veronica Hackett, a rendering of Collection at Court Street at 340 Court Street in Carroll Gardens, the Brooklyner and 200 West End Avenue

The Clarett Group, a New York residential and office building developer, has shut down its New York office, leaving one local project in limbo and the company’s future in doubt. And it comes as founder Veronica Hackett has decamped for a developer of commercial space, Brookfield Office Properties.

In January, following the gradual departure of staff over the past few months, the handful of remaining employees at Clarett’s Madison Square Park office were let go or quit, according to former employees. In 2007, that office had several dozen employees, the sources said. [more]

200 West End Avenue

In an effort to profit from a stabilizing retail market, real estate lender ING Clarion Partners is marketing a Lincoln Square retail condominium at 200 West End [more]

From left: the Brooklyner roof deck, Clarett Group’s Veronica Hackett and the Brooklyner building

It turns out that tenants at the Brooklyner had good reason to be irked about a [more]

This week’s rooftop opening party for the Brooklyner, a luxury rental tower at 111 Lawrence Street in Downtown Brooklyn, drew many guests — unfortunately, none of them were tenants, according to Curbed. Residents at the Brooklyner, the tallest building in the borough, say they’ve never even been allowed onto the building’s 51st-floor roof deck, where the building hosted its event, which was open to the media, project consultants and special invitees. While the building is 60 percent leased, residents say they’ve been given no estimate on when the rooftop might open to tenants and that this week’s elevated celebration was salt in the wound. For its part, developer Clarett Group said that it’s “in the process of completing the space, and it will soon be open to residents.” [Curbed]

[more]

This week’s rooftop opening party for the Brooklyner, a luxury rental tower at 111 Lawrence Street in Downtown Brooklyn, drew many guests — unfortunately, none of them were tenants, according to Curbed. Residents at the Brooklyner, the tallest building in the borough, say they’ve never even been allowed onto the building’s 51st-floor roof deck, where the building hosted its event, which was open to the media, project consultants and special invitees. While the building is 60 percent leased, residents say they’ve been given no estimate on when the rooftop might open to tenants and that this week’s elevated celebration was salt in the wound. For its part, developer Clarett Group said that it’s “in the process of completing the space, and it will soon be open to residents.” [Curbed]

[more]

Sunset Park’s Federal Building No. 2, the former Navy warehouse near the waterfront, could be the largest vacant building for sale in the city at 1.1 million square feet. The city’s Economic Development Corporation, which is trying to turn the property into an affordable manufacturing space for the city’s displaced industrial tenants, issued a request for proposals in December and has since received six bids from parties including the Clarett Group and Industry City Associates, ranging from $500,000 to $10 million. But between extensive and necessary renovations, zoning restrictions and property taxes of $1 million per year, taking on the 94-year-old structure will prove difficult for whoever winds up with the keys. Under Industry City’s proposal, the city’s idea of leasing space to light manufacturers would be expanded to include technology start-ups and art studios, in order to stir up enough interested tenants. The last time the federal government tried to sell the building was in 2006, when the winning bidder, Time Equities, withdrew from the deal after spending $1.5 million in engineering and architectural fees to create the plans because of economic concerns. Time Equities did not submit another proposal this time around, said chairman Francis Greenburger, because “our reading of the market hasn’t really changed.”
[NYT]

Fred Harris, vice president at AvalonBay Communities, which is constructing its first Brooklyn project, a 631-unit tower on Gold Street in Fort Greene.

From the March issue: A handful of major real estate management and development firms that have long avoided Brooklyn — even as housing prices in the borough shot up and brokerages rushed in — are finally venturing across the river.

The reasons are twofold. First, new high-rise, high-end construction in Brooklyn fits their business model. And second, values of these new Brooklyn buildings appear to have tumbled further and faster than their Manhattan counterparts, according to brokers and developers. “Developers are looking for opportunities, 100 percent,” said David Maundrell, a Dumbo resident and the president of aptsandlofts.com, a brokerage with a Brooklyn focus. “But they are willing to do that because there is a viable market here. It’s become a destination as opposed to an afterthought for Manhattanites who want a cheaper place.”

Jamestown Properties is one of the developers that recently upped its bet on the borough. In early 2007, the firm had a 60 percent equity stake in be@Schermerhorn, a troubled condo in Downtown Brooklyn, which was developed by SDS Procida and saw construction and sales suspended last year. But in December, Jamestown bought the balance of the mortgage from a consortium of banks. The consortium had originally lent $100 million to SDS Procida.