While State Comptroller Thomas DiNapoli has blasted the Metropolitan Transportation Authority for their $60-per-square foot deal with Apple for retail space in Grand Central Station, and plans an investigation, the MTA is keeping its cool, urging politicians and the public to “bring [the investigation] on,” the MTA said in a statement today.

Taken at face value, some observers say, the transaction looks like it gives the MTA — and by extension, the taxpayer — a raw deal. Apple’s rent in their 23,000-square-foot lease is far lower what other tenants pay at the transit and retail hub (Shake Shack will pay $200 per foot for Grand Central space, according to a report Tuesday in the New York Post). Also, the MTA failed to secure a percentage of sales revenue from Apple in their deal, something every other tenant at Grand Central pays. But the agency points to a number of constraints that explain that fact and why the deal generally made sense for the state agency. [more]

From left: One57 and Extell Development President Gary Barnett; the Touraine and Toll Brothers CEO Bob Toll; and 737 Park Avenue and Harry Macklowe

In an effort to increase control and decrease costs, big condominium developers are increasingly using their own sales teams for new projects rather than hiring outside brokerages to market the units, according to the Wall Street Journal.

For example, Extell Development, which relied on the Corcoran Group to market most of the condos it built throughout the last decade, has hired its own sales staff for its massive One57 development.

“To be frank, there is an awful lot of money in sales commissions and we want to get a piece of that ourselves,” Extell Development President Gary Barnett said. [more]

From the November issue:

Click the image for more

Compiled by Russell Steinberg [more]

CIM’s principal of investments Charles Garner and the
townhouse property at 42 East 57th Street

Developer CIM Group has paid British retailer Turnbull & Asser $32.4 million for a townhouse at a strategic site near the Drake Hotel, according to public records filed with the city yesterday.

The five-story, 8,580-square-foot building, located at 42 East 57th Street, contains four commercial condo units. Turnbull & Asser, a high-end clothing store, has owned and occupied the whole building since 2008, when it purchased it from antiques dealer Paul Schaffer for $31.5 million. Turnbull & Asser has dressed figures such as Prince Charles, Winston Churchill, Ronald Reagan, George H.W. Bush and John Kerry.

The acquisition may prove to be important for CIM and Harry Macklowe, the developers of the Drake Hotel site at 440 Park Avenue, which may be the most valuable development site in New York City. [more]

From the November issue: Three autumns ago, the collapse of Lehman Brothers knocked the wind out of New York’s real estate industry. Home sales flattened. Prices plunged. And, as layoffs mounted, office buildings emptied out. While there have been some spurts of activity, the industry has not gotten back to the highs of the boom. In fact, as the unemployment rate still hovers at an uncomfortably high level, and Wall Street (a once-reliable real estate engine) reports losses, it seems that a complete recovery might be years away.

All the same, there are signs of comebacks — whether they are from developers who once defaulted on mega-loans and seemed like pariahs, or stock prices that have bounced back from the doldrums at some public real estate companies. There are also geographic stretches of the city that had been pocked with empty retail spaces and empty condo buildings, but are now filling up with stores and residents. There are even some bankers who had been caught up in the subprime mess who are now back on the lending scene in a big way. [more]

Brown Harris Stevens’ Carol Cohen and 737 Park Avenue

The lawsuit filed against former Corcoran Group star broker and now Brown Harris Stevens senior vice president Carol Cohen, which led to her reported dismissal from Corcoran at the close of 2010, has been thrown out, according to documents filed by the New York state Supreme court earlier this month.

The lawsuit, filed by Katz 737 Corp., the landlord at Cohen and her husband Lester Cohen’s apartment building, in 2010, alleges that the couple had repeatedly lied about their income on state forms in order to prevent a rent increase at their $3,060 per month apartment at 737 Park Avenue, between 71st and 72nd streets. The landlord claimed that they had reported their combined income as being less than $175,000 per year to avoid a rent hike at the unit, which they had lived in since 1989.

The dismissal rendered those claims insufficient to prosecute. [more]

Developer Harry Macklowe has triumphed in a legal battle this week with investor Carl Icahn over $60 million Icahn claimed Macklowe owed him relating to an acquisition agreement back in 2006.

According to Reuters, Icahn filed suit in New York state Supreme Court against Macklowe after he allegedly backed out of a joint bid with Icahn for Reckson Real Estate Investment Trust. Icahn claimed that the contract between Icahn’s Meadow Star and Macklowe’s WH Rome Partners required that Macklowe deposit $600 million in a joint account in November 2006, during the time that the partnership was bidding for the REIT. Macklowe didn’t deposit the funds, Icahn argued, and as such owed Icahn $60 million under the contract’s failure-to-deposit provision. [more]

From left: CIM Group founders Avi Shemesh, Richard Ressler and Shaul Kuba and the Drake Hotel

The site of the former Drake Hotel, recently named the most valuable development lot in the city, will be home to a 1,300-foot tall residential tower, the largest in the city.

According to the Wall Street Journal, CIM Group, which acquired the site for $305 million last year, and Harry Macklowe plan to erect a slim condominium and retail complex designed by Uruguayan-born architect Rafael Vinoly with 128 units and 12-foot high ceilings. The $1 billion project, at 432 Park Avenue near 56th Street, includes a 5,000-square-foot driveway, golf training facilities and private dining and screening rooms. Macklowe has no equity in the project but has remained involved in the decision making. [more]

A Russian developer is accusing the powerful California real estate investment firm CIM Group of breaking a verbal agreement to work together to build on a vacant site at 33rd Street and Madison Avenue, and instead swooping in to buy the $29 million mortgage and foreclose on it, a new lawsuit filed yesterday in New York State Supreme Court says.

NMP-Group, controlled by Russian developer Natalia Pirogova, says in the suit that CIM Group used privileged information to snap up the note in August from lender Garrison Investment Group despite making promises in March 2011 to work with NMP in a joint venture to build a mixed-use tower at the site, at 172-176 Madison Avenue. [more]

Howard Michaels in his office at 560 Lexington Avenue last month.From the October issue: Thirty-four years ago, Howard Michaels was knocking on doors in the 2.3 million-square-foot Starrett-Lehigh office building, hawking copy machines for the 3M Company.

“I was making bupkis,” Michaels recalled.

Those days are undoubtedly over. In 2004, he arranged a $219 million recapitalization of that same building, earning a seven-figure commission for his company, a real estate investment advisory firm known as the Carlton Group.

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