The Real Deal New York

The up-and-coming leaders of New York City real estate have faced tremendous obstacles in the past three years. But with deal volume now accelerating as the worst of the recession fades, ambitious young people are again distinguishing themselves. This month The Real Deal spotlights talented industry pros ages 35 and under, who their colleagues say, represent the future of real estate in New York City. They are making their mark across the industry, as brokers, builders, lobbyists, investors and landlords. [more]

Tony Malkin in San Francisco last month before heading to New Zealand and Hong Kong on business

How do you transform a 2.9 million-square-foot building leased out to hundreds of puny renters with names like “Round the Clock Socks and Hosiery” and “Grandma Sylvia’s Funeral” into a state-of-the-art office building with a roster of high-quality, big-money international tenants? That was the question facing Tony Malkin when he and his father, Peter Malkin, finally removed Helmsley-Spear as managing and leasing agent of the 75-year-old Empire State Building in 2006. [more]

Appraisals have posed a major problem for the New York City real estate market over the past two years. With banks treading carefully after the credit crunch and hampered by 2009′s strict Home Valuation Code of Conduct, many New York buyers have found their appraisals coming in far lower than expected, jeopardizing otherwise straightforward transactions. But that is now starting to change, real estate professionals said, in a shift that is giving the industry a much-needed boost. As the economy stabilizes, appraisals have begun to follow suit. Appraisers, mortgage brokers, and agents agree that appraisals in the city are now more accurate than they’ve been for the past few years, though they say there’s still room for improvement.

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A rendering of the retail condo at 666 Fifth Avenue, where Zara, Hollister, Swatch and Uniqlo have all taken space

The notion of a $1 billion retail blockfront on Fifth Avenue seems like a pipe dream from the boom times. But it may yet happen. The record-setting purchase last month of a slice of the retail space at 666 Fifth Avenue by the parent company of Spanish clothing store Zara looks to be the tonic needed to get the once-wobbly investment by the Carlyle Group, Crown Acquisitions and Kushner Companies into the black. But it has been a turbulent road for the investment trio. In 2008, buoyed by a top-of-the-market lease from Abercrombie & Fitch, they paid $525 million for an 89,000-square-foot retail condo at the base of the 41-story office tower, located between 52nd and 53rd streets. [more]

Through the years, Seventh Avenue in Park Slope has been something of a model retail corridor. In a neighborhood that prides itself on shopping locally and eschewing national chains, residents have enjoyed that the 17-block stretch between Flatbush Avenue and Ninth Street in particular was packed with a slew of mom-and-pop shops, local restaurants and trendy boutiques. And as the strip grew in popularity over the decades, landlords could count on keeping their ground-floor spaces filled fairly easily — at increasingly robust rents. [more]

While those in the industry have been relieved to see the New York City commercial real estate market bounce back over the past year, the resulting price increases have prompted many investors and developers to look elsewhere for deals. Instead of searching for properties to buy in the Big Apple, they are, in many cases, turning to other markets — from prime locations like San Francisco and Los Angeles to secondary markets like Austin, Tex. “People need to realize that the number of assets truly available for a sales price that makes sense is very few in New York City,” said Daniel Alpert, managing partner of Westwood Capital, a Manhattan-based real estate investment bank. “There are an enormous number of people chasing [deals] to the point that there’s been overpayment, enticing people to look elsewhere.” [more]

Robert K. Futterman

Robert K. Futterman is the founder, chairman and CEO of Robert K. Futterman & Associates. With offices in New York, Las Vegas, Los Angeles, northern New Jersey and San Francisco, the retail firm has been responsible for nearly $20 billion in real estate transactions since its founding in 1998, and is currently marketing retail space at 11 Times Square and 855 Sixth Avenue. Futterman has personally been involved in transactions totaling some $10 billion. [more]

Stuart Elliott

This month kicks off with April Fools’ Day, and what better time to share the fake Onion-style headlines I’ve thought up over the past year while covering the New York City real estate beat? There was plenty of good material to draw from — ranging from lame dashed-off market reports, to the shenanigans employed to sell new condos, to the colorful personalities in these shark-infested waters. Here are the not-so-far-off-reality stories that would make up my satirical April Fools’ Day fantasy issue of The Real Deal. Click here to see Stuart Elliott’s Onion-esque headlines. [more]

Last month, the U.S. Commerce Department announced that sales of new homes nationwide plunged to levels not seen since 1963. Meanwhile, political turmoil raged across the Middle East, and Japan lost thousands to a devastating earthquake and tsunami. By contrast, the big real estate news in Manhattan was a new record-high sale price at the Plaza. Late last month, the Post reported that Russian composer Igor Krutoy closed on a $48 million purchase of a 6,000-square-foot Plaza spread. [more]

By the Numbers [more]

At the Desk of [more]

It’s time to raise the rent — at least according to landlord representative brokers, who were urging their owners to do so in the first quarter. One of the key trends driving that push was that large office tenants continued to get bumped from preliminary deals as even bigger prospective occupants came along. Brokers pointed to recent examples such as Wells Fargo being snubbed at 120 Park Avenue in favor of Bloomberg LP, and law firm WilmerHale losing out at 825 Eighth Avenue after Nomura Holding America sought more space there. [more]

Chris ChristieIf Chris Christie’s rise to political prominence on the national stage was swift and unexpected, his ascent as a real estate force has been even more so. A litigator by trade, the 48-year-old New Jersey governor arrived in Trenton last year with few official real estate ties to speak of, save for the Mendham Township home he owns with wife Mary Pat, a bond broker at Cantor Fitzgerald, and a longtime friendship with Hampshire Real Estate Companies founder Jon Hanson. But less than two years later, Christie’s almost devout fiscal conservatism has catapulted him — perhaps accidentally — into one of the most powerful real estate roles the state has seen in decades. [more]

From left: Steven Spinola and Alphonse Fletcher

The Real Estate Board of New York has thrown its weight — at least some of its weight — behind a controversial City Council bill that would require co-op boards to approve or reject new buyers within 45 days. REBNY recently sent out an e-mail urging members to support the bill, sponsored by City Council Member Lewis Fidler, a Brooklyn Democrat, amid rising concerns that buyers are beginning to sour on co-op deals because of the lack of transparency and long wait times for board approval. (Under current law, co-op boards are not required to notify a potential buyer about the status of their application, even if a decision is never made.) The move by REBNY to support the bill marks an unusual step for the trade group, which has historically opposed restrictions on co-op boards’ decision-making power. [more]

The artist’s sketch of a building on Bedford St.

James Gulliver Hancock is not a broker, a developer or a real estate finance executive. But he’s on an unusual real estate mission. The Australian illustrator, who moved to Brooklyn from Los Angeles a year ago, has been preserving New York City real estate as part of a project to sketch all — yes, all — of New York City’s buildings, from the giant Manhattan skyscrapers to the new condos to the old tenements. According to the city’s Department of Buildings, that means he’ll be putting pen to paper for more than 975,000 buildings in the five boroughs. [more]

When you take out a home mortgage, do you expect to be treated fairly and competently by your bank or loan servicer? Most likely you do. But the widely publicized “robo-signing” and foreclosure scandals suggest that for thousands of homeowners, fair dealing and competence have not been routinely available at some of the largest mortgage servicing operations in the country. [more]

Sheldon Silver

Report on rent-regulation “emergency” released

Assembly Speaker Sheldon Silver released a report last month that supports the extension of New York’s rent-regulation laws, which are set to expire June 15. Entitled “The New Housing Emergency,” the report says loopholes in the city’s current rent-stabilization rules — like vacancy decontrol and rent increases due to renovations — result in the loss of more than 10,000 rent-regulated apartments per year. The median income for tenants of the 1.02 million rent-regulated apartments in New York City is $38,000, according to the report. [more]

To the transformation of Williamsburg’s waterfront, add one more luxury residential building: 175 Kent Avenue. The 113-unit rental — which was developed by the Chetrit Group and is being marketed by aptsandlofts.com — officially launches this month. And if the new and nearby rentals that it’s following to market offer any sort of indication, the developers of 175 Kent may be breathing a sigh of relief. [more]

In the mid-2000s, residential real estate brokerages seemed to be sipping from the fountain of youth; that is, staffing their firms with freshly minted college graduates. Today, though, firms appear to be going with the more fine-wine approach of “older is better” when it comes to bringing on agents, according to brokers, firm managers and teachers at real estate schools. This brain drain of fresh-out-of-college talent in New York City’s residential real estate world, which has happened over the past few years, is the result of a perfect storm of forces, sources say. [more]

In the tight quarters of Manhattan real estate, cobbling together space by assembling blocks of adjacent land has long been one of the go-to strategies to make room for something bigger. Now there’s good indication that, after a recession hiatus, developers are again turning their attention back to assembling properties. Real estate firms such as the CIM Group, the Rockefeller Group and Extell Development are betting that as the economy improves, the investments made in these sites will pay off in the same one-plus-one-equals-three way they have for other companies in the past (see the Durst Organization’s One Bryant Park, for example). In addition, brokers say that increased activity has happened faster than many expected. [more]

1965: City’s first landmarks preservation bill becomes law

1933: Sunnyside Gardens owners start mortgage strike

1910: Park Avenue transforms into luxury apartment boulevard [more]

Spring — the time when New York City usually begins to welcome millions of tourists — has finally arrived. Unfortunately, when I look at my crystal apple, it shows a lackluster short-term future for the restaurant industry. That’s largely the result of events well beyond the pale of the New York real estate recovery. For one, the cost of travel has risen by as much as 30 percent since the beginning of the year due to the rise in gas prices. With turmoil in Libya and Egypt, many fear that the price of oil might exceed the record $140 a barrel, which could mean a major slowdown in travel. Combine this with the significant reduction in travelers from Japan, which is reeling in the aftermath of last month’s earthquake and tsunami, and things do not look good for the industry. [more]

Rosewood, a Georgian manor in Chappaqua, is the county’s second-priciest property on the market at $27.5 million. Stacy Levey of Houlihan Lawrence has the listing.

While the Manhattan real estate community is used to record-breaking residential deals, sales prices on some homes north of the city in Westchester are not too shabby either. Indeed, the county’s priciest listing, which is in Bedford Corners, a hamlet of the tony town of Bedford, is on the market for $30 million. Not surprisingly, the firms brokering those deals are fighting for market share, in much the same way that they are in the city. So which firms are dominating? [more]

Chris Raveis of William Raveis, and the firm’s Katonah office in Westchester

Don’t be deceived by William Raveis’ double-digit ranking. The mere fact that the firm made The Real Deal’s list of largest Westchester firms is a feat. While the firm came in 10th on the list, it’s quickly gaining a reputation as one of the fastest-growing residential companies in the county. A relative newcomer in the area, the Connecticut-based William Raveis entered the Westchester market with 25 agents in July 2009, after acquiring the Realty Three brokerage in Rye. [more]

The 57th Street pyramid

Before we allow ourselves to get carried away at the prospect of Durst Fetner Residential’s recently unveiled and startlingly original proposal for a residential development on the far west end of 57th Street, and before we congratulate ourselves on inhabiting a city that welcomes the most progressive strains of contemporary architecture, we should remind ourselves that this is still New York. And, if experience is any guide, the end result of this daring project’s lengthy approval process, involving the community board, the Department of Buildings, and anyone else who wishes to weigh in, may well be a piece of architectural product that is as dull and unremarkable as most others in the five boroughs. [more]

471 Washington StreetEventually the Yard, a 12-story condo under construction in Long Island City, will have 83 units. But when Eric Benaim, its marketing agent, started showing it to buyers in mid-December, it was sparse — very sparse. “We literally had nothing,” said Benaim, president of the brokerage Modern Spaces. “It was like a hard-hat zone. There were studs, only floors were in, it was freezing, no windows.” The big news, he said, is that even in less-than-optimal conditions, 13 units quickly went into contract. Four more have followed, he said. In today’s difficult climate, of course, it’s never certain that signed contracts will translate into closed sales. And though it’s still rare for buyers to purchase before a condo is finished, brokers and developers say they’re encouraged by reports of early sales at some new condo buildings. [more]

It is often said that the Hamptons market moves in lockstep with the stock market. And the upcoming season on the East End is shaping up to be no exception. As the stock market has made gains in the last year and, perhaps more important, shown some stability, the Hamptons market has followed suit. “I think the latest wave of business we’re doing is very much tied to the increase of the stock market,” said Andrew Saunders, president of boutique brokerage Saunders & Associates. In this month’s Q & A, The Real Deal spoke to East End brokers and firm heads, including Saunders, who said that sales activity has picked up recently and that the rental season started earlier and stronger than it has in the last few years. [more]

China’s limit on home purchases won’t reduce demand

Many observers view the Beijing housing market as overheated, and the Chinese government is taking new measures to try to keep things in check. In addition to raising interest rates three times since October, the Chinese government has ordered local municipalities to restrict the number of homes residents can own and to require higher down payments on home purchases. But these latest measures to cool the market likely won’t have the intended effect — they will produce pent-up demand rather than lowering prices, Jason Leow, the CEO of developer CapitaLand Ltd.’s China division, told the Wall Street Journal last month. Leow said longer-term measures that make owning multiple units more expensive — such as a real estate tax — would be more effective in preventing the market from overheating. [more]

The Sahara Hotel & Casino in Las Vegas

Las Vegas

Las Vegas’ oldest casino is slated to shutter next month after a proposed redevelopment plan failed, according to Bloomberg News. The Moroccan-themed Sahara Hotel & Casino, built in 1952, rose to fame after appearing in the 1960 film “Ocean’s Eleven” (the version without George Clooney). Stockbridge Real Estate Funds bought the property in 2007 with plans to “reinvigorate” the casino. [more]

Adina AzarianIlan Bracha and Adina Azarian first met 14 years ago, when they were both 20-somethings working for the now-defunct residential real estate brokerage Dwelling Quest. Azarian, now 37, was the mentor assigned to train Bracha through his first rental transaction. “She was my leader back then,” said Bracha, “so I’m well aware of her skills.” [more]

290 Mulberry Street

Coney Island development site for sale

A three-acre parcel in the newly rezoned Coney Island district at 1509-1520 Surf Avenue is on the market. According to Robert Dankner, president of Prime Manhattan Residential, which is marketing the property, the development site is expected to trade in the range of $75 to $85 million. The property carries development rights for over 350,000 square feet of hotels and retail as well as 300,000 square feet of aboveground parking. [more]

View all the commercial deals printed in The Real Deal’s April issue and browse the archives here:

Office leases
Retail leases
Commercial sales

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Click here to see this month’s crossword puzzle from The Real Deal online. [more]

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Construction update
Williamsburg
58 Metropolitan Avenue
Developer Steiner NYC has received a temporary certificate of occupancy for the 50-unit condominium project, which officially hit the market in June 2010. The seven-story property, the sister building of the developer’s 80 Metropolitan Avenue, has studios and one-, two- and three-bedroom units available, with prices ranging from $359,000 to $1.53 million. An indoor swimming pool, fitness center and yoga room are among the amenities. Halstead Property Development Marketing is the agent. Contact: www.58and80met.com. [more]

Brooklyn Heights
$495,000
111 Hicks Street
1-bedroom, 1-bathroom, 800 sf co-op in a prewar elevator building; 24-hour doorman; concierge; renovated unit has entry foyer and views of the Statue of Liberty and New York Harbor; building has roof deck and health club; maintenance $1,405 per month; 50 percent tax-deductible; asking price $525,000; three weeks on the market. (Brokers: Zelda Josephs, LREB; Jennifer Chen Palumbo, Ivy Paterni, City Connections Realty) [more]

As news of the devastation mounts in the wake of Japan’s earthquake and tsunami, many businesses have launched charitable programs to benefit the victims of last month’s natural disaster. And now, a well-known building in the Diamond District is getting in on the effort. [more]

Most New York City parents would say that one criterion reigns supreme in their home searches: school district. But brokers aren’t allowed to specifically steer families to neighborhoods with good schools, at the risk of violating the Fair Housing Act, which prohibits descriptive language like “bachelor pad” or “great for families” in advertising materials. Some parents say that requirement leaves them in the dark about which school districts to aim for. [more]

Citi Habitats feted its top-performing agents last month, with sisters Tracie and Elizabeth Hamersley nabbing the top sales agent prize jointly. Danny Davis was named both the top-grossing rental agent and the top-producing agent in the company, according to Citi Habitats. Matthew Berkson and Jon Cella were honored with the largest rental and sales commissions prizes, respectively. Juliet Clapp was named senior managing director of the year for sales, and Yuri Lobachevsky was senior managing director of the year for rentals. [more]

Residential
Core
Jon Phillips and Ginnie Gardiner joined the firm as senior vice presidents. They were previously with Halstead Property. [more]

R.A. Dickey

Florida’s youngest snowbirds — East Coast Major League Baseball players — make a pilgrimage each year to train among the royal palms. For the New York Mets, that means heading to Port St. Lucie, Fla., which is located beyond the northern tip of Palm Beach. Most of these players live in New York City during the season, so finding a Florida pad for spring training can be a challenge. To find a comfortable roost, players use all the tools at their disposal, from staying with friends to — yes, that’s right — Craigslist. [more]

Fred and Courtney Ilarraza, cofounders of Baby Bodyguards

The term “baby-proofing” is increasingly turning up in conversations in new corners of Brooklyn. As more families move from brownstones to new high-rise condos and rentals in places like Williamsburg and Downtown Brooklyn, concerns about making those spaces safe for kids are suddenly on the rise. The modernism of some buildings’ designs — think far-above-the-sidewalk terraces and tricky internal stairs — is adding to the baby-proofing craze, said Fred Ilarraza, cofounder of Baby Bodyguards, a Brooklyn-based company. “There’s a shift toward new construction among families, at the same time that they are becoming more concerned about how safe their homes are,” said Ilarraza, a former title insurer who founded the company in 2007 with his wife, Courtney, after the birth of their son. [more]