Michael Bass of Controlled Access Systems

From the December issue: Michael Bass became an independent New York City real estate broker in 2008, after a 22-year career in residential leasing with the LeFrak Organization. But it didn’t take long for the routine of showing rental apartments to wear on him. The inefficiencies, he said, were maddening, especially tracking down apartment keys from building staffers.

“‘Keys? What keys?” Bass recalled hearing. He added: “The worst thing is for a broker to try to show an apartment with a client, and you can’t get access to the building.”

Those experiences, along with conversations with brokers outside New York, led him to a new line of work: lockboxes. In September, Bass launched Controlled Access Systems, which aims to provide lockbox technology to New York City real estate firms. [more]

Richard LeFrak

The LeFrak Organization will redevelop a 13-story office tower in Rego Park into 108 luxury rental apartments, according to the Wall Street Journal. The project marks a return for the developer to the city, where it said it would no longer build because of the rising costs of construction. In fact, it’s the company’s first project in the city in 28 years.

The office building was constructed 50 years ago by LeFrak Organization CEO Richard LeFrak’s father, Samuel LeFrak, during a time when the developer was building housing geared towards the middle-income residents of the borough, most notably nearby LeFrak City. [more]

Citigroup has inked a deal for 46,000 square feet of office space near the Jersey City waterfront and is mulling additional space nearby after the New Jersey Economic Development Authority approved $12.3 million in subsidies intended to entice the bank to relocate jobs to the state. The seven-year lease at the LeFrak Organization’s 480 Washington Boulevard begins July 1 and is part of the bank’s expansion plans, a spokesperson told Crain’s. [more]

The leasing office at Monaco — Jersey City’s latest new residential tower and the tallest rental building in New Jersey — is slated to open in February, development team Roseland Property, Garden State Development and Hartz Mountain Industries has announced. The 523-unit, 50-story project consists of two towers designed by SLCE Architects, which are scheduled for completion in early spring, when they’ll eclipse the LeFrak Organization’s nearby Towers of America complex as the tallest rentals in the state. TRD [more]

Vornado Realty Trust is “nervously bullish” on the city’s commercial real estate market, Steven Roth, the REIT’s chairman, told CNBC’s Squawk Box today. Roth said that while he believes the market bottom has already passed, and transaction volume is “ticking up a great deal,” he is still keeping some office space in his portfolio off the market until rents recover. Meanwhile, Richard LeFrak of the LeFrak Organization noted that the commercial leasing landscape has morphed over the past decade to accommodate the growth of large hedge funds.

[more]

Richard LeFrak, president of the LeFrak Organization, appeared on CNBC’s Squawk Box recently with Tom Flexner, global head of Citigroup Real Estate, to discuss opportunities in the commercial real estate market. LeFrak, who cited the billions of investment dollars on the market sidelines, asked Flexner how private capital can invest in real estate at a time when no one seems willing to take a loss on their distressed assets. “It’s really a function of distressed sellers rather than distressed assets,” Flexner said. “The number one way that private capital can get into the real estate sector is to lower their return requirements.”

Richard Lefrak’s organization is a possible contender for Stuy Town

Tishman Speyer Properties and BlackRock Realty were pilloried for aggressively pushing out tenants and running afoul of the city’s J-51 tax abatement rules. But some of the firms that are being mentioned as possible replacements as owners or managers at Stuyvesant Town and Peter Cooper Village — such as developers LeFrak Organization and Rose Associates, and real estate firm Stonehenge Partners — come with their own skeletons in the closet. The New York City real estate world is bracing for a struggle among titans for management or ownership of the 11,200-unit housing complex on Manhattan’s East Side following the announcement  last month that the owners would cede control. Potential parties must negotiate with special servicer CWCapital Asset Management, the majority of which is owned by Canadian institutional fund Caisse de dépôt et placement du Québec. The special servicer represents the interests of the bondholders of the securitized loans on Stuyvesant Town. Other firms being bandied about as possible investors or investors are WL Ross & Co., Centerbridge Partners, Related Companies, WinnCompanies and Prudential Douglas Elliman, according to media reports. The thorny city tax abatement program known as J-51 that contributed to the forfeiture of Stuy Town and Peter Cooper Village has dogged one of the leading contenders for the site, LeFrak. [more]

From the October issue: New York City is at a peculiar crossroads. For months, investors have
marshaled unprecedented amounts of capital, salivating at the prospect
of snapping up distressed properties. “We’re fortunate this cycle to
have the most dry powder in our
history,” Blackstone Group president Tony James said last month at the
Barclays Capital Global Financial Services Conference, which was held
in Manhattan. The firm has about $28 billion in unspent capital, he
said. About $12 billion of that is earmarked for real estate. “We’re
just beginning what will be the best period in decades for private
investing,” he said. Dan Fasulo, a managing director at Real Capital
Analytics, estimated
that $50 billion has been raised and is ready to be deployed into
distressed real estate. Paradoxically, investors have found very little
worth buying so far, in large part because banks continue to hold
troubled loans on their books, hoping conditions will improve. [more]

LeFrak Organization Chairman and Chief Executive Richard LaFrak sat down with the New York Times to discuss survival in a down market and integrity in a corrupt industry. He jokingly commented in his interview that his proudest accomplishment is that he has “done business in Northern New Jersey for 25 years and [hasn't] been carted away in handcuffs yet.” But, humor aside, LeFrak said that he sees the corruption in New Jersey as “pathetic.” He argued that a focus on fundamentals keeps his business strong, even in a recession. “I’m kind of a farmer — I start with dirt and make it grow — and that’s been a tradition for 100 years,” LeFrak said. “My sons will be the fourth generation, and yet we’re still applying the same fundamental ideas applied by our predecessors.”