Douglas Durst, chairman of Durst Fetner Residential, and landlord Baruch Singer

A Durst Organization affiliate, Durst Fetner Residential, is expected to sell a $32.5 million note on a stalled 1 million-square-foot residential development site on the East River in Long Island City to the property’s owner. The sale is a signal that the long-delayed project on the site of the East River Tennis Center, first dreamed of in the 1970s, is finally going forward. But it would be a blow to Durst Fetner’s hopes to develop the site. Durst Fetner, a residential development company, bought the note on the six-acre, vacant site at 44-02 Vernon Boulevard in November 2009 from a Texas bank, one of the site’s developers Marshall Weisman said. Durst Fetner purchased the note at a discount, Durst Organiziation spokesperson Jordan Barowitz said. He would not divulge the price.

Weisman, managing member of the New Jersey-based property owner Vernon Realty Holding, said he expects to close on the note purchase in the first or second week in March, and must pay the full face value of $32.5 million. [more]

Chart clarification: While CBRE data puts Durst’s portfolio at 7.2 million square feet, a Durst spokesperson later said that figure is actually 9 million.

Asking rents plunged for some of Midtown’s top landlords last year as they competed for the few tenants searching for space in a weak leasing market, but their reductions helped keep their vacancy rates below the market average, experts said. The family-owned Durst Organization dropped its asking rents to $60.82 per square foot in November 2009 from $113.15 per square foot in August 2008, near the pricing peak of the leasing market, according to the most recent data available on Midtown’s top 10 landlords from commercial services firm CB Richard Ellis. The Real Deal compared data from August 2008 to November 2009 for the top 10 landlords in Midtown ranked by square feet owned. The 46 percent decline was the steepest among Midtown’s top 10 landlords, who control 93 million square feet, or about 41 percent of the market. Landlord and tenant leasing broker Cynthia Wasserberger, a managing director at commercial firm Jones Lang LaSalle said the landlords cut prices to attract tenants and keep their buildings filled. “I think all the landlords got aggressive. They were pretty swift in their decision to respond to the market,” Wasserberger said. [more]