Andrew Farkas, chairman and CEO of C-III Capital

Earlier this month, investor Andrew Farkas purchased a stake in national brokerage firm Grubb & Ellis in an effort to repeat his previous success with the acquisition and then sale of Edward S. Gordon Co. in 1996 for $415 million, the Wall Street Journal reported, but he may be facing a tough road bringing the company back to its best.

The brokerage has lost some of its top-performing agents, according to industry executives, since the departure of David Arena, the firm’s tri-state chairman, who went to JPMorgan Chase in 2010.

The company has been somewhat in flux since Arena left, the Journal said. The firm is now being headed up by Martin Cottingham, a former Bear Sterns managing director.
Grubb has increased the share of commissions that brokers receive in an attempt to keep them at the company, offering some top brokers more than 75 cents per dollar of commission earned, former brokers told the Journal. [more]

David Arena, the tri-state chairman of Grubb & Ellis Real Estate Services and Investment Management, was appointed co-head of JPMorgan Chase’s corporate real estate team today, along with Kim Bertin, the Observer reported. In his new position, Arena will focus on international and retail financial services, while CB Richard Ellis’ Bertin will be responsible for the real estate portfolio for the Americas. They will each be in charge of all design and construction, facilities, asset management and transactions in their respective areas, and jointly responsible for strategy and real estate policy across the firm. Bertin has previously worked in the corporate real estate department at JPMorgan, as a director at CB Richard Ellis and as head of real estate at Bertlesmann/Random House. [NYO]

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It is hard to believe that a person who I had considered one of the pessimists on the state of the office market, Barry Gosin, the president of Newmark Knight Frank, has become the optimist on the New York City office market.

Last Friday, Barry appeared on CNBC, stating that he thinks that office rents have reached bottom.

“We are calling a bottom,” he said. “Our view is that the rents have priced forward, that values have come down significantly, and that sometime this year, prices will start to turn.”

Unfortunately, I would consider myself cautiously optimistic on the state of the office market and have therefore reached out to some other real estate leaders to provide me with their thoughts (read: more realistic) on the state of the market.

Joseph Harbert, the COO of the New York metro region at Cushman & Wakefield, believes “we haven’t reached bottom, but further declines should be minimal — maybe another 5 percent to go.”

Downtown, he said, “expect further rent declines as space comes to market. We have started to see some deals in the $20s [per square foot], although Class A office space is expected to remain above $30 a foot. In Midtown, Class A rents have experienced the greatest decline and are approaching a bottom in the next three to six months. So saying we are close to the bottom would be the most accurate way to put it.” [more]

The lenders for the Midtown development where Aby Rosen’s RFR Holding
was slated to build Shangri-La Hotel, New York, have filed to foreclose
on $144.2 million in loans and fees used to buy, plan and develop the
site, court records say. ING Real Estate Finance and Swedbank sued to foreclose on the loan to
Park Avenue Hotel Acquisition, a company registered at the address of
developer Aby Rosen’s RFR Holding, which was slated to develop the
Shangri-La Hotels and Resorts’ tower at 610 Lexington Avenue, at 53rd
Street. The borrower was unable to refinance its loan by an April 8 deadline,
and so ING determined the loan was in default on June 15, the filing
says. [more]

Commercial brokers experiencing the worst real estate environment in a
generation got a breakfast pep talk from leading executives at a real
estate panel today but heard divergent views on when the market will
hit bottom. Matt VanBuren, senior managing director at full service commercial firm
CB Richard Ellis, provided a relatively optimistic viewpoint, holding
that the city is near the bottom of the downward cycle. “Our perspective is that we are at an inflection point, and that the
majority of the downward price movement has occurred,” he said, adding
that the overall health of financial and legal firms remained critical
to a recovery. [more]