The same signs of increasing consumer spending that are expected to boost the retail real estate market are already positively impacting the industrial real estate market.

The New York Times cited Cushman & Wakefield data that shows the vacancy rate in industrial properties declined in the first half of the year to 9.7 percent, year-to-date leasing activity is up 27 percent from a year ago, and sales volume in the first half of the year grew nearly 160 percent compared to the same period a year ago.

Several companies have been especially aggressive in acquiring industrial properties, including Clarion Partners, Terren Realty Corporation, Morgan Stanley, the Cabot Group and CenterPoint Properties. But Blackstone Group may be the most active of all, which added 275 industrial buildings for $2 billion, tripling its portfolio. … [more]

A vacant recording studio on 38th Street has been sold for $20.5 million, despite attempts by a group of music professionals to buy it.

According to public records filed with the city today, Prime Property Fund, an entity related to Morgan Stanley Real Estate Advisors, sold the four-story, 42,800-square-foot property at 509 West 38th Street to ELB Holdings LLC, an entity controlled by principal Eric Birnbaum.

The building, located between 10th and 11th Avenues near the Hudson Yards, previously housed Legacy Recording Studios. The only film-scoring studio on the East Coast, Legacy hosted the making of various motion picture soundtracks and Broadway scores. Legacy was ousted from the building in 2008 after it was sold for $17.57 million to the development firm Twining Properties, which planned to build a condominium on the site, according to Chris Bubacz, the former general manager of Legacy. … [more]

Morgan Stanley, which just kicked off the sale of its mortgage servicing arm and partnered with the Witkoff Group at a Broadway condominium conversion project, borrowed $107.3 billion from the Federal Reserve in 2008, the most of any bank, according to data compiled by Bloomberg News using information released in response to Freedom of Information Act requests, related court orders and an act of Congress.

An examination of the Fed’s emergency lending reveals how close Morgan Stanley came to bankruptcy because of a run on its prime brokerage, the unit that finances hedge funds’ trades, Bloomberg reported.

“Prime brokerage was presumed to be a pretty secure business, where the funding was not actually part of the liquidity of the bank,” said Frank Suozzo, president of advisory firm FXS Capital in Goldens Bridge, N.Y. … [more]

Steve Witkoff and 1107 Broadway

The Witkoff Group, owner of one of the International Toy Center buildings located at 1107 Broadway, is joining forces with a Morgan Stanley real estate fund for a $290 million condominium conversion of the property featuring 145 units, the Wall Street Journal reported. The collaborators are still searching for a financing partner, but are expected to close the deal in the next month.
Witkoff acquired the 16-story, 350,000-square-foot property for $190 million in a one-day auction in June by seller Lehman Brothers. A number of high-profile bidders attended the event, including CIM and William Macklowe, SL Green Realty, and L&L Holdings.
Witkoff and Morgan Stanley anticipate spending $100 million to renovate the building, the Journal said. … [more]

New York-based investment firm Paramount Group has recapitalized a 49 percent interest in its 2.5 million-square-foot office tower at 1633 Broadway, between 50th and 51st streets, GlobeSt.com reported, after Morgan Stanley, Bank of America and Merrill Lynch affiliates exited the building partnership.

Paramount’s new partners in the 48-story, Class A property include affiliates of Beacon Capital Partners and Paramount Group’s Real Estate Fund IV. In addition, SL Green Realty also acquired a preferred equity interest. Paramount retained its 51 percent controlling interest.

“We took our interest in the property to 51 percent to about 75 percent,” Dan Lauer, vice president of acquisitions for Paramount, told GlobeSt.com. “SL Green is making a preferred equity investment and Beacon is acquiring the remaining limited interest in the property.”
… [more]

U.S. homeownership rates are below 60 percent when delinquent borrowers are discounted, an indication of the country’s move toward a “rentership society,” according to a Morgan Stanley report released yesterday, cited by Bloomberg News.

The national homeownership percentage was 66.4 in March but would be only 59.7 percent without 7.5 million delinquent owners who will likely soon be forced into renting. The lowest rate on record was 62.9 percent in 1965, the first year the census began, Bloomberg said. The highest rate on record was 69.2 percent in 2004.

Mortgage delinquencies, foreclosures and tighter credit are stymieing property buying, Morgan Stanley analyst Oliver Chang said…. [more]

Carver Federal Savings, the nation’s largest bank founded and run by African Americans, has avoided collapse by raising $55 million in new capital, Crain’s reported. The bank had recently moved into large commercial real estate lending, veering away from its tested strategy of lending to one- to four-family homes — the move backfired. Earlier this year, faltering under a load of delinquent real estate loans, the bank was ordered by regulators to raise additional cash.
The new investors include Goldman Sachs and Morgan Stanley, which have agreed to invest $15 million each, while Citigroup and Prudential Financial have agreed to put in $10 million, according to an announcement from Carver’s parent, Carver Bancorp. … [more]

1. Half-finished Brooklyn condo just one of many stalled city projects
[NYDN]
2. “Super Size Me” director Morgan Spurlock shops for a house in Park Slope
[NYMag]
3. National sales hurt as lenders hold homes in foreclosure
[NYT]
4. U.S. cracks down on loan security
[WSJ]
5. Cousin of George W. Bush octuples his investment in Soho penthouse
[NYO]
6. Police supervisor recieves threat over Hamptons’ beach vendors decision
[Patch]
7. More on Eric Schneiderman’s mortgage investigations
[WSJ]
8. A sneak peak at Union Square’s new Pavilion restaurant
[Curbed]
9. Media frenzy outside Dominique Strauss-Kahn’s 71 Broadway digs
[WNYC]
10. Meanwhile, building manager tries to reassure residents at Strauss-Kahn’s temporary residence
[WSJ]
… [more]

New York Attorney General Eric Schneiderman is intensifying his investigation of the mortgage crisis that spurred the recession by requesting records from major Wall Street banks, according to the Associated Press.

Schneiderman has also arranged meetings with representatives of Bank of America, Morgan Stanley and Goldman Sachs Group to discuss the nature of mortgage securities operations during the boom. Schneiderman is concerned that packaging mortgages into securities to be purchased by investors may have helped disguise risky loans, according to a source close to the investigation…. [more]

Kuwaiti investment firm Fosterlane Management, the former owner of the Lipstick Building and 350 Park Avenue, is getting back into the New York City real estate game with the purchase of Hines Interests’ 750 Seventh Avenue for $485 million, or roughly $808 per square foot, the Post reported. Earlier this week, the Observer reported that the 600,000-square-foot tower near 49th Street tower was in contract to sell to an anonymous offshore investor. Hines purchased the 36-story tower, half of which is occupied by Morgan Stanley, for $150 million in 2000 through a partnership with General Motors. … [more]