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From the April issue: Everyone knows it’s been a tough year for developers and brokers. But it’s also been a difficult economic stretch for the lawyers who represent them. While New York City’s real estate lawyers may no longer be drafting legal documents for building sales and new condo projects, they are busy working on other things, including loan workouts, bankruptcies and litigation with lenders. This month, The Real Deal ranked the New York City law firms with the biggest real estate practices. Topping the list was Fried, Frank, Harris, Shriver & Jacobson with 60 real estate lawyers — nearly 20 percent of the 309 lawyers in their New York offices.

Joseph Moinian and Dwell95

Developer Joe Moinian filed a lawsuit on Monday to block the scheduled auction of Dwell95, his luxury rental building at 95 Wall Street, however a last minute bankruptcy filing by the mezzanine lender has postponed the proceeding. Monian’s Moinian Group, one of the city’s biggest real estate development companies, filed suit in New York State Supreme Court against Rubicon Finance America, which held a $42 million mezzanine loan on the 507-unit property in the Financial District. Moinian had a $227 million construction loan on the building from Credit Suisse-unit Column Financial, but the value of the property fell below the loan balance due to the 2008 economic downturn, which put the mezzanine loan into default, according to the complaint. Moinian alleges he reached an agreement with Rubicon and Credit Suisse to buy the $42 million mezzanine loan for $1 million, but he says on Dec. 10 that Rubicon agreed to sell $1.4 billion in loans, including the Dwell95 loan , to a joint venture firm that included FBE Limited and Lane Capital Management. Right after the sale, Moinian alleges that FBE and Lane Capital scheduled a Dec. 30 auction to foreclose on 95 Wall Street and basically deprive him of the chance to buy back the defaulted mezzanine loan. [more]

In their first official response to the bankruptcy filing of 20 Bayard, lawyers for W Financial Fund last week urged a U.S. Bankruptcy Court judge to reject a motion by developer Isaac Hager to continue operating the Williamsburg condominium with monthly rent and parking fees. Hager, president of North Development Group, threw the 64-unit condo into bankruptcy last month, when he was unable to make a $170,000 interest payment to W Financial, or refinance a $17.4 million bridge loan. In a Dec. 9 filing, Martin Ehrenfeld, restructuring officer for the developer, asked permission to use the rent and parking fees to cover monthly maintenance charges for at least 120 days until a reorganization plan is worked out with creditors. After selling 24 apartments before the real estate market collapsed in 2008, Hager rented out nearly all of the remaining units until the condo market recovered. According to the court documents, 20 Bayard has $1.28 million in net operating income per year. [more]

From the November issue: The amount of free rent that landlords are offering to entice reluctant tenants to sign contracts has hit record levels in the current downturn, despite the fact that asking rents have started to stabilize in parts of the Manhattan leasing market. In the third quarter, two Midtown leases were signed with 17 and 18 months of free rent — double the average of eight and a half months, figures from the most recent report from commercial services firm CB Richard Ellis showed. Some industry professionals said even longer rent-free periods were being negotiated. “For some landlords it may be advantageous to give more free rent [but] with a higher rent [per square foot],” he said. The free rent was just one element of a soft Manhattan leasing market that saw a 1 percent decline in September asking rents. Those rents fell to $50.78 from $51.28 per square foot the month earlier, the CBRE data shows. Average asking rents are now down 29 percent from the peak of $71.92 per square foot in July 2008.

From the June issue: While many New York City developers are hamstrung by the recession and
scrambling to get their own financial houses in order, some are
starting to think about positioning themselves for a market rebound.
Although many of the projects they’re considering are in their
infancy — and have yet to reach the desks of the city officials who
would need to sign off on them — experts say a few savvy developers are
already plotting their post-credit crunch courses. In most cases, the
planning does not involve laying out serious money, but instead is more
centered around gearing up for zoning approvals or variances on
properties that do not have “as of right” development status. “I think the smart developers are indeed looking at those
properties that present difficulties because they have complex
entitlement issues, zoning issues or environmental issues,” said
Mitchell Korbey, a partner at the law firm Herrick Feinstein and a
specialist in urban planning and land use. “Those properties might have
been on the back burner during the past several years because of the
market’s attractiveness.” [more]