The Real Deal New York

In this weak real estate market, new condo developers possess
relatively little in their arsenals to arm themselves against the
onslaught of purchasers seeking to back out of contracts. But there are
a few measures developers can take to protect themselves without
scaring off potentially legitimate buyers.
Some developers, for instance, are using new clauses designed to prohibit buyers from litigating their way out of deals.
Real estate attorney Adam Leitman Bailey pointed to clauses in
which the buyer agrees to refrain from citing ILSA, the United States
Department of Housing and Urban Development’s Interstate Land Sales
Full Disclosure Act, as an excuse to break a contract. Bailey claimed
that such a clause is not enforceable. [more]

When a broker switches firms, mailing out glossy announcement cards is the easy part. What’s not so simple is wresting listings away from the old firm to bring them to the new one. The armor-plated contracts that govern exclusive listings threaten sellers with punitive fees or lawsuits if they try to pick up and follow a relocating broker.

But the recent shuttering of several New York firms has shaken loose hundreds of listings, in a whirlwind that few have seen in years, brokers say.

“There have definitely been a lot of listings in play that otherwise wouldn’t be. It’s very unusual,” said Michael De Rosa, a senior vice president at Halstead Property who joined the firm in June after Coldwell Banker Hunt Kennedy closed. [more]

In the West 20s, the name “F.M. Ring Associates” is emblazoned on the sides of numerous buildings. The large, fading mural-like advertisements look like mysterious relics from a previous incarnation of the city.

And to many in the real estate industry, F.M. Ring Associates, a firm that owns or has an ownership stake in 15 office buildings, most of them in Chelsea and Gramercy, is itself a mysterious relic of a bygone era.

Brokers say Ring’s buildings sit mostly empty, and many note that the company is extremely difficult to negotiate with. In a throwback to pre-digital times, a reporter from The Real Deal was told by a receptionist that the best way to reach Frank Ring, the firm’s principal, was by sending a fax, as the company does not use e-mail.
[more]

In the summer of 2008, no one could have foreseen how much the real estate industry would change in only a year. Prices that once accelerated at a dizzying pace are now declining. Sales volume and rental transactions have been cut in half. Commissions are smaller and brokers’ fees paid by renters are largely a thing of the past. New developments, once the city’s most sought-after properties, are now nearly impossible to sell amid a credit crisis of epic proportions.

The industry’s remaining agents have been left to pick up the pieces and adapt to a radically different world. Surprisingly, many have done so with gusto, adjusting their business models to fit the new environment. [more]

Peter Duncan, the president of George Comfort & Sons, would
probably not be faulted by many in the real estate community for
whooping it up with a big “I told you so” to all those who predicted he
would never seal the deal on the purchase of Worldwide Plaza. But unlike many of his contemporaries, Duncan refuses to take a victory
lap to celebrate the deal, or boast about his prowess in timing the
market. “It’s like any acquisition. Buyer’s remorse kicked in immediately,” Duncan told The Real Deal, in a half-joking sort of way. His Madison Avenue-based firm, which previously owned more than 7
million square feet of office space, had until recently been a rather
low-profile operation in New York. [more]

Managing buildings — a job that often encompasses everything from fixing toilets to making sure a property is up-to-date on its permits — is not exactly the most glamorous sector of the real estate market in New York.

But it does provide essential grease that helps keep the market moving smoothly. And in these strained economic times, good management can play a crucial role in retaining rental tenants and making co-ops or condos attractive to would-be buyers.

With that in mind, The Real Deal has compiled its first-ever list of the biggest building management companies in Manhattan, ranked by both building and unit volume. [more]

No one knows exactly why Jeff Blau, the 41-year-old president of the Related Companies, was denied a co-op board interview this spring at exclusive 820 Fifth Avenue. In what would have been one of the biggest deals of the year, Blau reportedly planned to pay $31 million for a fourth-floor spread at the limestone building between 63rd and 64th streets, where each apartment takes up a floor.

Many possible explanations for the high-profile turndown have been bandied about by real estate observers.

Was it the fact that Blau is in real estate, at a time when the city’s housing market has slumped? Was it the fact that he’s Jewish, in a city where many of the most exclusive buildings were forged in a crucible of anti-Semitism? Was there bad blood between Blau and a building resident? [more]

In the West 20s, the name “F.M. Ring Associates” is emblazoned on the
sides of numerous buildings. The fading mural-like advertisements look
like relics from a bygone era. Brokers say much of Ring’s valuable
portfolio, most of which is in the prime neighborhoods of Gramercy,
Chelsea and Flatiron, sits strangely empty. This month, The Real Deal looks at the mystery of the Ring family and profiles a host of big under-the-radar players in New York. [more]

Strong leasing velocity is beginning to remove the fear that the Manhattan leasing market will go into freefall, as landlords continue to provide aggressive incentives — such as rent reduction clauses and offers to buy out expiring leases — to get contracts signed, brokers said.

Incentives that were completely unheard of a year ago, or at least difficult to get put in a deal, are now being offered regularly, said Robert Stella, executive vice president at real estate advisory firm Cresa Partners.

“If you want favorable terms for expanding, or contracting, or lease cancellations, those are all on the table now,” he said. [more]

New York real estate might be known for its big personalities, but there are a host of owners and investors like Frank Ring who shun the spotlight.

Some publicity-shy players are revered in the industry for having orchestrated some of the city’s biggest deals: Lloyd Goldman, Jeffrey Feil and Joseph Cayre, for example, are spoken of in reverential tones by commercial brokers as high-powered, big-money wheelers and dealers.

Still others are the stuff of local legends. Families like the Moskowitzes and the Trenkmanns are known for being multi-generational kings of small neighborhoods. [more]

With dwindling cash reserves, some commercial real estate borrowers in New York have resorted to aggressive tactics, like withholding payments or paying late, to get their lenders to agree to modify loans.

It’s a game of chicken borrowers sometimes play with lenders, sources say, because as long as borrowers stay current, lenders are reluctant to modify their loans.

In addition, unless the loan is in imminent risk of default, loan officers and servicers of securitized loan pools often cannot change the terms of a mortgage. [more]

The term “vulnerable” is not typically associated with the alpha dogs of New York City’s high-powered commercial real estate world. But that is precisely how a number of top commercial firms are feeling these days, and to compensate, they are taking extra measures to ensure that landlords can’t stiff them.

An increasing number of brokers are having legal language inserted into their contracts stating that if their commission is not paid by a certain date, it will come from the tenant they worked with, instead of the landlord. The “rent in lieu of commission” clause, as it is unofficially known, is structured so the payment won’t cost the tenant a dime; rather, it will simply be deducted from the rent they would otherwise pay to the landlord. [more]

The 23-story office tower at 475 Fifth Avenue that was formerly owned
by investment group Westbrook Partners and the Moinian Group is on the
market, the New York Observer reported. The asking price of $105
million represents a price per square foot of $381. The
275,284-square-foot building was returned to its lender, Barclays
Capital, earlier this year after the owners defaulted on loans backed
by the property. Moinian and Westbrook had acquired the 84-year-old
building, dubbed the “Wedding Cake Tower,” for $162 million in 2007. L
& L Holding Company is managing the property for Barclays. [more]

At the Desk of Larry Silverstein

Experts expect September 2009 to be an improvement from the same month last year. Unfortunately, that’s not saying much.
Last September, of course, was the month Lehman Brothers filed for
bankruptcy and Merrill Lynch agreed to sell itself to Bank of America
for roughly $50 billion. These events, along with the credit crisis and
recession unfolding around them, unleashed a year of pain in New York
City’s residential real estate market. [more]

Two years ago, demand for air rights was, well, through the roof. “For residential use at the peak of the market, [air rights] were between $400 and $500 a square foot,” said Stuart Siegel, executive managing director at commercial real estate firm Grubb & Ellis.

The rights, often called development rights by those in the industry, were being traded by everyone from real estate giants like the Related Companies to small-time developers. The goal: to erect ever-taller buildings, with which to pull in more income.

Stephen Lefkowitz, a partner at Fried Frank, which handled the transfer of several hundred thousand square feet of air rights from the St. Thomas Church on Fifth Avenue to the MoMa Tower to be built at 53 West 53rd Street, noted that at the time sales for air rights were “very active.” [more]

The days of dropping by a Sunday open house on a whim may be numbered. Sellers, frustrated by lowball offers and by buyers who are “just looking,” want to make sure they’re dealing with serious apartment-hunters. As a result, more and more potential buyers are being asked to provide detailed financial information — from their employer and salary to their debt ratio and savings — before they’re even allowed a peep at an apartment for sale.

“The listing brokers are scrutinizing the potential buyer before they even get to the building,” said Michael Signet, executive director of sales at Bond New York. “It’s a preventative measure [to keep sellers] from wasting their time with people who are just shopping around.”
[more]

Sean Oakes, a vice president at Halstead Property, is having his best year ever. So far, he’s earned nearly 40 percent more than last year, and he’s on track to double his 2008 take-home pay by the end of the year.

How did he accomplish this feat in the worst market in more than a decade? Simple. Oakes gets referrals from a real estate attorney, who alerts him every time her firm is handling a troubled mortgage. Another friend, a landlord in Williamsburg with extensive contacts, does the same thing.

“He’ll say, ‘This person is receiving threats from the bank and needs to sell, can you call her?’” Oakes said. [more]

The rental market has changed dramatically since Lehman Brothers collapsed a year ago this month. In the second quarter of 2009, the average Manhattan rental price per square foot had dropped 17 percent from the same period a year prior, while the number of transactions plummeted 58 percent, according to a quarterly market report by Prudential Douglas Elliman.

As a result, a new breed of aggressive renters are throwing real estate agents for a loop.

“It wouldn’t be surprising if an agent had dealings with 15 to 20 clients for five [of them] to offer rents that were one-third below the asking price,” said Gordon Golub, a senior managing director at rentals behemoth Citi Habitats.

In this new environment, vacancy rates are high, landlords have completely revised their criteria for tenants and renters are even demanding a portion of brokers’ commissions.

This month, The Real Deal polled agents and industry experts to see how they’ve gotten a handle on Manhattan’s rapidly shifting rental market.

Lease length less rigid

In the past, rental leases in Manhattan were often very similar, and heavily weighted in favor of the landlord. Tenants were generally expected to move in soon after signing the lease and stay the entire year-long term — or else.

Now, however, things have changed, and successful agents need to stay on top of the new norms.

In the past, for example, signing a one-year lease was often non-negotiable. With unemployment on the rise, however, a lease that’s too rigid in terms of length is now a deal-breaker for some tenants.

“We’re seeing the lease term being discussed more,” said Golub. “It’s become an important qualifier when people make a move.”

Move-in dates are also a lot more negotiable. At 200 Water Street, a new Rockrose rental in the Financial District, tenants signing leases last month were given the option of moving in as late as December.

Jodi Berman, a project manager at Rockrose, explained that the company wants to sign as many leases as possible during the busy summer rentals season, even if those tenants don’t move in for a few months.

“We have to lease 576 apartments,” Berman said. “We want to get as many as we can in the summer.”

Elsewhere in the city, two-year leases — often offering a flat rate for the entire lease term — are becoming more popular as landlords look to stem the tide of vacancies and postpone rent decreases.

“[They] are hoping that in two years, things will be better,” said Sean Oakes, a vice president at Halstead Property.

That’s a change from the recent past, when the landlords nearly always raised the rent in the second year of a two-year lease.

Golub said landlords are also now more likely to put a “cancellation clause” in the lease allowing the tenant to back out after a certain time. There is also talk of eliminating or reducing the penalties for moving out early.

“Landlords are much more apt to do it now, whereas they didn’t need to in the past,” Golub said. “It allows them to fill their buildings.”

For example, landlord Stonehenge Partners is now giving a 60-day cancellation rider for tenants who can prove they’ve lost their jobs, said Linda Wright, the leasing consultant at Stonehenge’s Ritz Plaza at 235 West 48th Street. A tenant who provides proof of a layoff and gives the landlord 60 days’ notice can vacate the apartment without a penalty.

Loosening ironclad income standards

Until recently, the financial requirements for renting a Manhattan apartment were incredibly strict, with landlords demanding tenants with excellent credit, an income of 40 to 50 times the monthly rent, and reams of documentation to prove it. Renters who weren’t up to snuff needed a guarantor with even more sterling qualifications.

Now that vacancies are on the rise, some landlords are loosening those once unshakeable qualifications.

“Overall, landlords are looking to open up their pool of new tenants,” Golub said. “To do that, they may be more lenient on the requirements for the applicant or guarantor.”

Landlords now look more kindly on small blemishes on an applicant’s credit history, and are relaxing income requirements.

“Landlords that used to require 50 times the rent might go down to 45,” said Marcus Medina, a manager at the brokerage Urban Sanctuary.

When it comes to guarantors, landlords previously preferred them to be from New York City or the tri-state area. “Now, they’re more willing to accept a guarantor from elsewhere in the country,” Golub said.

Tenants with poor credit, meanwhile, were not to long ago required to pay six months to a year of rent up front. Now, that’s dropped to three to six months, Golub said.

Landlords are also more likely to allow tenants to have pets and put up temporary walls, he added.

Overall, owners are considering each situation individually rather than rejecting a tenant outright for a small problem.

“We look at everything on a case-by-case basis,” said Rockrose’s Berman. “We want to make as many deals work as we can.”

Don’t expect landlords to loosen their income requirements too much, though, since it takes a very long time — sometimes up to a year — to evict a non-paying tenant. “Landlords have to be very cautious in New York City,” Medina said.

That’s one reason they still prefer to offer generous incentives as a means of luring the most qualified tenants, he said.

Right now, for instance, the Related Companies is offering a free one-year membership to any Equinox gym (which the company owns), free movers, or gift certificates to West Elm or Zipcar. Pan Am Equities, the developer of New York Plaza at 2 Water Street in the Financial District, is offering free membership to the New York Health & Racquet Club.

Renters ask for a piece of OP commissions

Renters aren’t the only ones getting incentives. Brokers, too, are getting cash and gifts thrown at them by landlords eager to lease up their buildings.

Earlier this year, landlords began paying brokers’ fees — usually equivalent to one month’s rent — an expense that had traditionally been paid by renters. Now, some landlords are paying agents more than one month’s rent as a commission.

New York Plaza, for example, is offering two months’ rent as a brokers’ fee, Golub said, while Silver Towers, at 610-620 West 42nd Street, is paying agents one-and-a-half months’ rent.

Some landlords are even offering agents gift cards worth hundreds of dollars in addition to their commissions, Golub said.

Renters, for their part, know this incentivizing is going on, and some feel entitled to the loot.

Some are even demanding a portion of agents’ commission, known in the industry as an OP, for “owner paid.”

“They say, ‘Why should you make this money when it took you five minutes to rent the apartment?” Medina said. “They’re asking us to pay them something out of our pocket.”

But agents should avoid giving up their OPs at all costs, Medina said.

“An OP is already at the bottom level in our comfort zone in profitability,” Medina said. “If you start going to that, your situation is untenable.”

For that and other outrageous demands, Golub says a firm refusal is the best approach. The client may walk away, but “it’s better not to work with someone who doesn’t understand the value of what you do,” he said.

Some real estate agents in the city are working for a new kind of client. For the first time since the 1990s, banks are beginning to hire New York City real estate firms to handle troubled new development projects, according to brokers.

A regional bank, for example, recently hired Halstead Property Development Marketing to sell units at a new condo project where the developer is in default, said Halstead’s executive director of development marketing, Stephen Kliegerman, who declined to name the project.

Meanwhile, the sales team at Forte, a 30-story residential tower in Fort Greene, will now be working for the project’s construction lender, Eurohypo Bank. And at new development marketing firm Core, CEO Shaun Osher said he speaks to lenders on a daily basis. [more]

So-called “recession specials” continue to dominate advertisements. And as in previous bust periods, today’s real estate ads sell value, not luxury, to entice budget-conscious consumers.

“Now, it’s almost taboo to talk about living the high life; having an ostentatious lifestyle is not advertised like during a boom period. Instead, your home is looked at as a smart investment,” said Scott Aaron, a principal at Benchmark Real Estate Partners.

Even the Upper West Side’s Apthorp, where elegance and luxury were key marketing points a few years ago, is now plugging its slashed prices and “once in a lifetime” opportunities for bottom-fishing homebuyers.
[more]

For a year now, real estate brokers and developers in New York have
been grappling with the ripple effect of the Lehman Brothers collapse
and the Wall Street fallout. But now, on this somewhat somber
anniversary, it’s time to start looking ahead and anticipating where
the market will be a year from now.
In this month’s Q & A, The Real Deal talked to
economists, brokers and firm principals who described what the
landscape will look like for sales activity, pricing, foreclosures and
employment in the next 12 months in the city. The predictions were not
all pretty.
Indeed, one economist said that prices will have dropped another 13 percent by next September. [more]

Washington politicians and editorial writers throughout the country are bashing banks for foreclosing on hapless homeowners. And, indeed, foreclosures are on the rise.

However, an even larger wave of foreclosures is coming to New York City, say experts who base their predictions on rising default rates, combined with the difficulty of refinancing underwater homes.

The increasing numbers of distressed properties, they say, portend a substantial decline in property values throughout the city.

“If you are looking at the statistics, it cannot possibly have hit bottom,” says Joshua Stein, a partner in the real estate practice group of Latham & Watkins, and chair of the education committee of the Mortgage Bankers Association of New York. [more]

Manhattan

Clinton Hill

$2.437 million

555 West 59th Street

3-bed, 3-bath, 1,800 sf condo in a postwar elevator building; unit has dining room, terrace, washer/dryer, marble baths; building has 24-hour doorman, concierge, health club, pool, storage, laundry, roof deck; common charges $1,523; taxes $4,827 (per year); last listing price $2.93 million; 36 weeks on the market. (Broker: Richard Nassimi, Barak Realty)

Midtown East

$445,000

250 East 54th Street

1-bath, 400 sf studio condo in an elevator building; unit has herringbone parquet floors, views of the East River and city; building has full-time doorman/concierge, bicycle room, maid service, common storage room, gym, pool; common charges $392; taxes $310; last listing price $495,000; four weeks on the market. (Broker: Roberto Costanzo, City Connections Realty)

Murray Hill

$737,500

35 Park Avenue

1-bed, 900 sf co-op in an elevator building; unit has a 500 sf terrace, granite countertops in kitchen, oak flooring, marble back-splash; building has 24-hour doorman, part-time elevator operator, garage access, laundry facilities; maintenance $1,238; last listing price $799,000; 217 days on the market. (Broker: Allison Block, City Connections Realty)

Upper East Side

$655,000

350 East 82nd Street

1-bed, 1-bath, 736 sf condo; unit has 640 sf terrace, eat-in kitchen; building has 24-hour doorman, health club, pool, party room; common charges $1,238; taxes $13,000 (per year); last listing price $695,000; 54 weeks on the market. (Broker: Rae Gilson, Classic Marketing)

Upper East Side

$430,000

400 East 90th Street

1-bath, 526 sf studio condo in a postwar building; unit has renovated kitchen, alcove with window; building has 24-hour doorman, gym, business center, children’s playroom; common charges $568; taxes $4,085 (per year); last listing price $450,000; 10 weeks on the market. (Broker: Rae Gilson, Classic Marketing)

West Village

$3.357 million

59 Horatio Street

2-bed, 2-bath, 3,200 sf corner townhouse; features high ceilings, exposed beams, wood-burning fireplaces; taxes $20,000 (per year); last listing price $4.8 million; 31 weeks on the market. (Brokers: Irit Carroll, Barak Realty; Eileen Robert, the Corcoran Group)

Queens

Hunters Point

$498,118

5-49 Borden Avenue

1-bed, 1-bath, 646 sf condo in postwar elevator building; unit has hardwood floors, view of Manhattan skyline; building has 24-hour doorman, concierge, live-in super, party room, health club, roof deck; common charges $446; $16 tax abatement; last listing price $520,000; 45 weeks on the market. (Brokers: Kathryn Swift, Barak Realty; Lena Katsimbrakis, BHS)

Oakland Gardens

$170,000

224-24 Union Turnpike

1-bed, 1-bath in sponsor unit; no board approval; unit has hardwood floors; building has laundry facilities, swimming pool, parking; maintenance $634; last asking price $199,000; 119 days on the market. (Listing broker: Matt Weinstein, City Connections Realty)

By the Numbers September 2009

A New York City public school built in 1905 is being converted into
a modern residential condo development. Sales are slated to launch this
month. The apartments range in price from $475,000 to $899,000.
Halstead Property Development Marketing is the exclusive sales and
marketing agent. [more]

One of the new projects near the architect’s row in Far West Chelsea boasts one man as both architect and developer.

“People love architects,” notes Cary Tamarkin, the designer of the boutique condo at 456 West 19th Street, one of the latest projects directly on Manhattan’s High Line. “Everyone knows that architects are noble and spend time making things beautiful.”

“I worked super hard to make a building that is kind of outrageous,” he says.

But Tamarkin is also the project’s developer, as he has been for all of his projects during the last 14 years. And everyone knows that developers are “greedy, money-hungry, food-spitting” miscreants obsessed with keeping costs down, he says. [more]

The developers of 184 Kent, the high-end rental building about to open in Williamsburg, will be hitting the streets of the Lower East Side in a van, looking to take well-to-do hipsters to the Brooklyn waterfront.

They won’t actually be driving them there. But the idea is to troll for arty, young Lower East Side-type professionals where they live and hang out, parking the van — plastered in ads based on the quirky “WilliamsburgLove” mock dating site — in front of popular clubs.

“We’re looking at the Avalon Bowery project on Chrystie Street in the Lower East Side as comparables,” says Jason Halpern, managing partner of the building’s owner, JMH Development. [more]

By Constance Rosenblum, NYU PRESS, 277 pages, $27.95
Reviewed by Sara Polsky

In its heyday, everyone either lived there or wanted to. That’s how Constance Rosenblum describes the Grand Concourse in the Bronx — the 4.5-mile road that will celebrate its centennial this November.

The boulevard began with a French-born engineer named Louis Risse, whose vision for the thoroughfare was inspired by hunting expeditions in the neighborhood. Risse initially imagined the Grand Concourse as a 182-foot-wide road with lanes for cyclists, pedestrians, horse-drawn carriages and trolleys. Between the time Risse conceived of the Concourse and the time it opened on an inauspiciously stormy day in 1909, parts of the design had already been retooled to make way for automobiles.

That was far from the first shift in tenor for the road, which forms the backbone of “Boulevard of Dreams: Heady Times, Heartbreak, and Hope Along the Grand Concourse in the Bronx,” a microhistory by the editor of the now-defunct New York Times City section.

The street’s evolution makes for a compelling historical narrative that is worth telling. However, the book is organized thematically rather than chronologically, and as a result, it sometimes seems jumpy.

The thematic back-and-forth reduces the impact of Rosenblum’s narrative of the street’s rise and fall. It’s hard to keep track of which residents, described in different chapters, occupied the street at the same time, and when the boulevard’s most important buildings were constructed in relation to each other.

But as an argument about a cultural artifact, rather than a straightforward history, “Boulevard of Dreams” does its job. Rosenblum makes the case that the Grand Concourse’s first 100 years had a lasting sociological and cultural impact on the West Bronx and the city as a whole, and that the street deserves to be preserved for its next century.

As Rosenblum describes, from the 1920s through the 1950s, the boulevard was home to upwardly mobile Jewish, Irish and Italian families who moved from Lower East Side tenements to the East Bronx and then to the Grand Concourse-centered West Bronx. Artists and writers, including E.L. Doctorow and Stanley Kubrick, grew up in the street’s shadow in those years and admitted its influence on their later work.

However, by the early 1960s, the street began to lose some of its stability, residents believed, as drugs and poverty started plaguing the neighborhood. Today, the area is changing again, with residents moving in who are determined to rehabilitate the street’s image as, in Rosenblum’s words, a “battered” neighborhood whose best days seem behind it.

Rosenblum also highlights the Grand Concourse’s real estate and development.

The street’s groundbreaking buildings included the Theodore Roosevelt at 171st Street, which was reportedly the world’s largest apartment house when it opened in 1922. The boulevard was also the site of innovation in affordable housing: Architect Andrew Thomas popularized the idea of garden apartments for middle-income residents with Thomas Gardens at 840 Grand Concourse.

Between 1935 and 1941, nearly 40 Art Deco apartment buildings were built on the Grand Concourse. The buildings’ lobbies had terrazzo floors, statues, embossed elevator doors and mosaics. The apartments themselves had sunken living rooms and corner windows.

Rosenblum describes the buildings as “enormously beguiling, studded with details and flourishes that almost tumble over themselves in an effort to please.” Even without the photographs included in the book, her descriptions would be three-dimensional enough to visualize.

The Art Deco apartment houses were a source of pride for residents and gave them the feeling of living on the cusp of modernity at an important historical moment. But the traditional five- and six-story apartment houses that alternated with newer-style towers also served an important function, Rosenblum argues, replicating the closeness of Lower East Side tenement life for Jews who wanted upward mobility but did not want to leave the community they knew behind.

The architects who created the buildings were little-known outside the Bronx, but Rosenblum convincingly re-establishes their reputations for her readers. Israel Crausman, Charles Kreymborg, William Hohauser, Jacob Felson and Horace Ginsbern were some of the architects whose work had the deepest impact on the face of the Grand Concourse. Ginsbern, in particular, was responsible for 14 apartment buildings on the boulevard. His most famous, in Rosenblum’s view, was the Fish building, the nickname given to 1150 Grand Concourse, which featured mosaics with “a fantasia of marine life.”

As the character of the West Bronx began to change in the early 1960s, so did its buildings. Although the most elegant structures on the Grand Concourse were largely spared, buildings on adjacent streets were abandoned or burned. By 1980, the residents were ordered out of Noonan Plaza, one of Ginsbern’s celebrated designs. The city took over the dilapidated Concourse Plaza, a hotel where weddings and celebrations were once held.

Some residents even blamed real estate development in the West Bronx generally for the death of the Grand Concourse, as people left the street for new projects, according to Rosenblum.

In December 1968, for example, the Co-op City complex opened on the Hutchinson River. The complex was designed to include 15,372 apartments, three shopping centers and six schools. Two-bedroom apartments hit the market for $2,250, and many of the first applicants were Grand Concourse residents. Newspaper reports at the time accused Co-op City of “siphoning” residents away from the Grand Concourse, though other factors, including the creation of the Cross Bronx Expressway, also contributed to the street’s decline.

Rosenblum maintains a reporter’s neutrality on the questions of why the Grand Concourse declined and how it should be revamped for the future, falling back on historical narrative rather than opinion. For a reader interested in explanations for the changes that have occurred in the West Bronx, her stance can be frustrating at times. But regardless, Rosenblum’s affection for the boulevard still peeks winningly through.

More Georgia homeowners are becoming landlords as they attempt to wait
out the housing market. The number of Georgia residents switching their
insurance policies from homeowner to landlord plans increased by 35
percent in the first quarter of this year, according to Allstate
Insurance Company. Renting out their homes could mean more property
damage, accidents and other legal risks for homeowners, the Atlanta
Journal-Constitution reported. But the average price of a home in the
Atlanta metropolitan area was 15 percent lower this May than it was a
year ago, according to the Case-Shiller index, making many homeowners
reluctant to sell. Comments

• Print

Norman Sturner is the co-founder and CEO of Murray Hill Properties,
which he started in 1971 along with partner Neil Siderow. Since then,
the company has bought and sold $10 billion worth of commercial real
estate and manages over 5 million square feet of office space. The
company’s holdings include Herald Square’s 1250 Broadway, which it
purchased for $310 million with investment lender Jamestown in 2008,
and 1414 Avenue of the Americas at 58th Street, which Ian Schrager is
turning into a luxury hotel. [more]

It may have Manhattan’s highest natural point (265 feet, in Bennett Park), but Washington Heights did not see the steep peaks in activity and prices that so many Manhattan neighborhoods experienced in the past few years.

As a result, the neighborhood — which stretches from the Hudson to the East rivers and from 155th to Dyckman streets — has avoided the complete and utter cratering that many other Manhattan neighborhoods have seen in the last couple months.

This month, as part of a monthly feature looking at what kinds of deals are closing in different neighborhoods, The Real Deal found that Washington Heights saw a 76 percent drop in closings in the past year. While that may seem steep, pricing held up far better than other, more upscale areas.
[more]

Governor David Paterson announced last month that New York will offer a
federal income tax credit to first-time homebuyers starting in
September to encourage home sales. First-time buyers will be eligible
to claim a credit equal to 20 percent of their annual mortgage interest
costs through the New York State Mortgage Credit Certificate. The
credit’s goal is to extend and improve the federal government’s $8,000
first-time homebuyer credit, enacted as part of the American Recovery
and Reinvestment Act of 2009, which expires on Nov. 30. If a home is
purchased before Nov. 30, the credit certificates may be used with the
federal $8,000 tax credit.
[more]

Developers such as Lloyd Goldman, the Chetrit family and commercial broker Robert Knakal have recently opened their wallets to candidates in the citywide race for comptroller.

During the most recent fundraising period, City Council Member David Yassky from Brooklyn took in the largest amount of contributions from real estate interests among the major contenders for the office, an analysis by The Real Deal of the most recent Campaign Finance Board filings found. The period covered July 12 to Aug. 10.
[more]

Here are two questions getting a lot of attention on Capitol Hill and from the Obama administration: When homeowners lose their houses to foreclosure, should they be able to stay in the property, leasing it back at fair market rent from the lender?

Should they also get an option to purchase the house from the bank at the end of the lease term, assuming they have the income to afford it?

Before leaving for their break last month, Democrats and Republicans in the House took a rare unanimous stand on both questions by passing the Neighborhood Preservation Act by voice vote. The bill was co-sponsored by Reps. Gary Miller, Republican of California, and Joe Donnelly, Democrat of Indiana. [more]

Banks, insurance companies and government service organizations plan to provide financing for commercial real estate in the fall, according to real estate lenders in the tri-state region.
Insurance companies including Northwestern Mutual, the Teachers Insurance and Annuity Association of America (TIAA-CREF), Principal Life Insurance and John Hancock are once again talking to prospective borrowers for financing of five to 10 years. And although rates are no longer in the range of 5 to 6 percent, a good deal might be able to fetch a fixed-rate loan in the range of 7 to 8 percent at par. [more]

New York City has long been a town where a shopper can turn the corner from a bustling retail district, walk a block or two, and enter a retail ghost town.

Now, as the Great Recession sends vacancy rates in Brooklyn and Queens skyrocketing — toward 15 percent by year’s end, according to Marcus & Millichap estimates — this contrast between blocks chock-full of retail and blocks down on their luck is growing ever more marked.

Even within the overall depressed market, certain blocks and types of retailers are taking it on the chin. [more]

There are bargains to be had in the Garment District — and not just for $9.99 sweaters. Seventh and Eighth avenues in the 20s and 30s are a retail renters’ market, with rents among the lowest in Manhattan today, sources said. In some cases, they’re a steep discount compared to prices in adjacent neighborhoods such as Chelsea, where rents are about 30 percent higher.

While the area has long been one of the most affordable commercial neighborhoods in Manhattan, the deals there have sweetened even more lately, as rents across the city have nosedived.

At the same time, more than a dozen retail locations in the area, particularly along Seventh Avenue in the 20s, are either in the process of changing hands or have recently come on the market. [more]

The architects at Kohn Pedersen Fox Associates (KPF), the firm
responsible for the nearly completed One Jackson Square at 122
Greenwich Avenue, are all grown-ups — an odd, but important point to
bring up here in New York, where the maturity of our architects is
hardly something that can be taken for granted. [more]

Marinas for superyachts, or boats longer than 98 feet, are taking the
place of golf courses as essential amenities for builders hoping to
sell vacation homes on the coasts of Mexico, Costa Rica and Panama, the
International Herald Tribune reported.
At Peninsula Papagayo, a residential and resort project on the
Gulf of Papagayo in Costa Rica, 42 condos near the marina have already
sold. The project is slated to have 500 residential units, with prices
ranging between $350,000 and $1.2 million. Also in Costa Rica, 30
percent of the owners at Los Suenos Resort and Marina own a boat.
Ashley Bretecher, executive director of marketing for the development,
said the marina, with 300 slips, is responsible for bringing in most
buyers. [more]

Two former Marcus & Millichap brokers hope to grab market share
with a new company despite the downturn. Kevin Salmon, former vice
president of investments at Marcus & Millichap, and Matthew
Marshall, who also began his career at Marcus & Millichap, have
launched Salmon and Marshall Real Estate Investments, which focuses on
commercial condominiums and multi-family properties. [more]

Online Manhattan real estate auction company Bid on the City has
partnered with a South African property auction company to share
listings, Bid on the City’s founders said. Vlad Sapozhnikov, one of Bid
on the City’s founders, said South African company Alliance Group
approached Bid on the City about finding a way to sell Manhattan real
estate to South African customers. Under the companies’ agreement,
scheduled to take effect at the beginning of this month, each company’s
properties will be included on the other company’s Web site. For any
sales of Bid on the City properties to Alliance customers, Bid on the
City will get a referral fee, and vice versa. [more]

Brown Harris Stevens has moved its Sag Harbor office down the street from its old digs at 76 Main Street, continuing the group’s nearly two-year pattern of office relocations throughout the East End. Since 2007, BHS has relocated its Bridgehampton and Southampton offices as well, and added a new office in Amagansett.
The new office, located at 96 Main Street, is the site of the Corcoran Group’s old Sag Harbor home. Corcoran closed the office in February 2009 during its massive consolidation on the East End.

Corcoran has been steadily paring down its Hamptons presence. While still a massive force in the region — Corcoran has the greatest number of agents on the East End — in April 2009 the company had 80 fewer agents in the area than two years earlier, according to an analysis by The Real Deal in April. BHS had 149 agents at the time.

BHS moved into the new space last month, said Charles Manger, BHS’s executive director of Eastern Long Island. He estimates that the new Sag Harbor space is approximately 1,200 square feet, twice the size of its prior location.

The firm has an office each in Amagansett, Bridgehampton, Southampton and West Hampton Beach, and two in East Hampton, with a total of roughly 150 agents, including nine in Sag Harbor.
Manger said he isn’t concerned about picking up Corcoran’s bad luck.

“We’ve made very good strategic moves,” Manger said. He brushed off suggestions that expanding office space is a bad idea in the economic climate. “During this time is when we think we should be making this move.”

Manger said that since 2007, the firm’s focus on expansion in the region has been a priority. At the same time, he said, the company has been able to retain and bring on board new agents. He cited Bridgehampton as one location where, after moving offices, the firm was able to attract agents from competing companies.


This story originally ran on The Real Deal’s daily blog.

Residential

AC Lawrence & Company

Clyde Tate and Erica Sullivan joined the company as senior vice presidents. They were both previously vice presidents at Coldwell Banker Hunt Kennedy. Aida Kassa joined as a sales associate. She was previously with Brown Harris Stevens.

Barak Realty

Fumiyo Hayashi was promoted to vice president from sales associate.

Brown Harris Stevens

Nancy Teague joined the firm as a senior vice president. She was formerly a senior vice president and associate broker at the Corcoran Group.

DJK Residential

Carola Mack joined the firm as vice president of brokerage. She was previously with Prudential Douglas Elliman.

Gumley Haft Kleier

Mona Davis joined the firm as a salesperson. She was previously with the Corcoran Group.

Prudential Douglas Elliman

Cynthia Keskinkaya joined the Jacky Teplitzky team as executive vice president. She was formerly a broker at the Corcoran Group. Charles Hawkins, Julia Jiang, Ilsa Vasquez, Mikhail Gurfinkel and Thomas Srdanovic joined the company. They were previously with Halstead Property.

Weichert Realtors, Mazzeo Agency

Luigi Pecoraro joined the company’s Manhattan office.

Commercial

Jones Lang LaSalle

Bill Miller joined the company’s Northeast retail outsourcing group. He was previously responsible for real estate development and asset management for Starbucks in the New York metro area. Joshua Gleiber joined the real estate investment banking team as an asset management and workout specialist.

Levien & Company

Allison Robin joined the project management and owner representation company as an associate project manager.

The Praedium Group

Andrew Scott joined the company’s acquisitions team in the New York office. He was formerly an associate with Perry Capital’s real estate group.

Spandrel Property Services

Angela Coleman joined the company as executive property manager.

Studley

Joseph DeRosa and Casey Michael Lewis joined the firm’s Midtown office as associates. DeRosa was previously a wealth management investment specialist with Gunn Allen Financial. Lewis was formerly an associate with NAI Global.

Vornado Realty Trust

Andrew Ackerman joined the company’s New York office as a leasing associate. He was previously with Cushman & Wakefield.

Compiled by Linden Lim

When the subprime mortgage crisis hit, adjustable-rate mortgages morphed from a widely popular loan option to a widely derided culprit in the residential real estate meltdown.

However, now these variable loans, known as ARMs, are making a major comeback in New York City. Since June, they have spiked to 20 percent of the business at Equity Now, a Manhattan-based direct mortgage lender, from zero throughout 2008 and the beginning of this year.

Brokers at a range of firms making new loans say all the action is in ARMs. For example, they have jumped to 60 percent of new loans processed at Apple Mortgage Corp. this year, compared to 40 percent a year earlier. [more]

Crossword September 2009

Money is tight these days, tighter than my extremely round cousin trying to fit into a size 32 pant.
Like my cousin, I find it hard to stop living in the past. I’m not
a financial size 32 anymore, but I can’t stop trying to squeeze into my
old lifestyle. As a result, I’ve been struggling to balance my way of
life with my bank account.
For a while I didn’t want to believe it; I kept spending, some
might say recklessly. When I get into the nightclub, how am I not
supposed to make it rain $20 bills?
Recently, however, bills have become an unwelcome shock. But what
am I supposed to tell my friends and family? It’s hard to look into the
eyes of your peers and tell them business stinks. [more]

As the downturn continues, work has fallen off even for some of the most celebrated architects working in New York City.
In a widely reported move this June, Frank Gehry was booted from
the Atlantic Yards arena job in favor of an architectural firm that
would save the project money. And last month, Robert A.M. Stern told The Real Deal that his firm has seen projects put on hold because of the economy (he declined to give specifics).
In response to the slowdown, some starchitects are scaling back
their office operations and shifting to more institutional work to deal
with the drought of new development projects. [more]

Property listing spam is a fact of life in real estate. Like the swallows of Capistrano, flocks of all-capped, too-good-to-be-true e-mails arrive in brokers’ inboxes in predictable cycles: “MUST SEE!!!” and “SPACIOUS, MODERN,” they scream in the subject line.
But as the commercial real estate market continues its downward slide, some in the business say the number of e-mails from brokers promoting their properties have reached a new level. And some firms are now restricting the number of times brokers can press send. [more]

Fortress buys Sheffield57 at auction for $20M

Following two months of legal challenges and financial turmoil, Fortress Investment Group acquired the controversial Sheffield57 condominium for a mere $20 million during a foreclosure auction last month.

Fortress, a Manhattan-based hedge fund that previously acquired more than $100 million in defaulted Sheffield loans, made the lone bid at the auction, giving it total control over the 322 West 57th Street holding company. Out of the few dozen attendees, there were only two other registered bidders and neither made an offer for the building.

The sale, arranged by Eastdil Secured and held at the Midtown offices of Allen & Overy, the law firm representing Fortress, is considered a minor miracle for —developer Kent Swig, who struck a June agreement to bring in the hedge fund as a white knight.

After buying the defaulted mortgage loan and senior mezzanine loan, Fortress advanced several million dollars to help pay off common charges and unpaid mechanics’ liens that Swig had accumulated.

Swig overcame a ferocious legal challenge from Yair Levy and Serge Hoyda, the majority investors at Sheffield57, who alleged that Swig misappropriated more than $50 million in construction funds.

The two partners and Gramercy Warehouse Funding, a junior mezzanine lender on the project, filed separate suits in July to prevent the auction. Motions to block the auction were denied by a State Supreme Court judge.

The foreclosure sale effectively wipes out Levy and Hoyda’s interest in Sheffield57, a former 845-unit rental building that they bought with Swig for $418 million in 2005, one of the biggest acquisitions of a residential tower in U.S. history. By David Jones

Court gives hope to Manhattan House tenants

A group of 24 market-rate tenants at the struggling Upper East Side condominium Manhattan House were granted the right to appeal their evictions to the New York State Appellate Division, a move that could renew the debate over the rights of nonstabilized tenants in a residential conversion.

In December 2008, an appeals court overturned an earlier ruling to block the evictions of 29 tenants at Manhattan House who were originally issued eviction notices during the conversion of the property from a rental building to a condo.

The tenants refused to leave the building after developers Peter Kalikow and Jeremiah O’Connor acquired the property at 200 East 66th Street for a record $623 million in 2005. The developers planned to convert the 583-unit rental building into a luxury condo, but faced significant opposition from tenants who challenged the legality of their evictions.

Attorney Adam Leitman Bailey, who is handling the tenants’ appeal, says he will argue that the tenants were legal occupants of their apartments at the time of the conversion and had the right to get their leases renewed.

Lawyers for the tenants previously argued that the developer tried to illegally push out market-rate tenants from their apartments through harassment by offering new leases with exorbitant rent hikes and refusing to accept rent payments. The court ruled, however, that the landlord merely exercised his right not to renew tenants with expired leases. By David Jones

Sapir’s 100 Church Street hit with $3M in liens

The Sapir Organization’s office rehabilitation project at 100 Church Street has financial challenges that extend beyond the scuttled lease deal for the Claremont School that led to a lawsuit against SL Green Realty last month.

Seven architectural and contracting firms that have worked at 100 Church Street in Lower Manhattan claim they are owed nearly $3 million in unpaid invoices since March from the building’s owner, Sapir, a Midtown-based developer and owner.

Between March and August, the companies filed mechanics’ liens totaling $2.89 million, including $202,919 by Long Island City-based Remco Maintenance and $1.7 million by Ecker Window, based in Yonkers, according to a review of New York County Clerk records by The Real Deal.

The liens were filed against the entity that owns the building, 100 Church Owner LLC, which is controlled by Sapir.

One company, Gruzen Sampton Architects, filed a mechanics’ lien for $328,398 in June, then filed a lawsuit against Sapir to foreclose on that lien on Aug. 4 in New York State Supreme Court. (Company head Alex Sapir was not named in the suit.)

That was just three days before Sapir claimed in a lawsuit filed in the same court that it was blocked by lenders SL Green and Gramercy Capital from finalizing the 255,000-square-foot lease with Claremont School, which would have been the largest lease in the 21-story, 1 million-square-foot building.

(As of press time, Sapir relinquished control of 100 Church Street to SL Green, which has hired real estate investment firm Eastdil Secured to solicit interest from potential buyers. The building is slated to be sold at auction Oct. 15, Crain’s reported.) By Adam Pincus

Barak Realty to open across town

As the economy has shaken up the real estate industry, far more firms have closed offices than opened them. But one firm recently added another office to the “open” column: Barak Realty, which signed a lease last month for a storefront space at 1458 Third Avenue, between 82nd and 83rd streets, company president Barak Dunayer said.

The company needs to build out the 700-square-foot space and plans to open the office in November, Dunayer said. Sixteen to 20 agents, both new hires and a few “anchors” from the firm’s 237 West 72nd Street office, will work out of the new space, he said.

The Upper West Side office, which has about 40 agents, is currently the company’s only office.

Dunayer said that after a rough fourth quarter in 2008, business improved in the first two quarters of this year, so it made sense for the firm to open a new office.

“I attribute this to hard work and good professionalism and [the] skills of our agents,” he said. “They adapted to the new market out there.” By Sara Polsky

UrbanDigs head leaves Halstead for venture

Well-known blogger Noah Rosenblatt has left his post as an associate broker at Halstead Property to focus more attention on his popular real estate analysis Web site, UrbanDigs.com, and launch a new consulting business.

Rosenblatt will continue to work as a real estate agent, but his license is now being held by the newly founded company associated with his Web site, UrbanDigs Analytics and Consulting.

Over the next six to eight months, Rosenblatt and his partner, Jeff Bernstein, will also redesign the Web site “to make it more social and interactive,” and add a suite of analytical tools to help buyers and sellers assess the state of the real estate market, Rosenblatt said.

A former equities trader, Rosenblatt has gained a loyal coterie of followers since he founded the UrbanDigs.com blog in 2005, applying his knowledge of macroeconomics to real estate. By mid-2007, Rosenblatt was predicting the end of the Manhattan real estate bubble.

“I always thought the industry had a car salesman-like approach,” Rosenblatt said. “The goal of UrbanDigs has always been to provide an unbiased view of what’s happening.” By Candace Taylor

Golf star Vijay Singh buys $5M Lincoln Square penthouse

Professional golfer Vijay Singh and his wife, Ardena Seth, recently purchased a $5.675 million penthouse condominium at 555 West 59th Street in Lincoln Square.

The 3,369-square-foot duplex unit in the newly constructed Element near West End Avenue has four bedrooms and a wood-burning stove and was listed in June at $6.9 million by Brown Harris Stevens, according to StreetEasy.com.

The 46-year-old golfer signed a contract for the unit July 1, and then closed on the sale July 23, according to city property records posted last month.

The 34th- and 35th-floor apartment has views to the north, east and south and includes a 1,463-square-foot terrace, the listing said. By Adam Pincus

1960: Pan Am signs city’s largest lease at 200 Park Avenue

The international passenger airline Pan American Airways signed Manhattan’s largest office lease to date, taking 613,000 square feet in the as-yet-uncompleted tower rising at 200 Park Avenue in Midtown, 49 years ago this month.

The 25-year lease at the building that sits on top of Grand Central Terminal at 44th Street involved a total rental value of $115.5 million.

The 59-story office tower was going to be called Grand Central City, but was renamed the Pan Am Building after the deal was struck for about 15 floors.

When it opened in March 1963, the 2.9 million-square-foot office tower was the largest commercial building in the world.

The Pan Am lease had an option to purchase a 10 percent interest in the leasehold of the building, which the airline exercised. Then, in 1978, it bought the balance of the leasehold and the land under the tower for $25 million.

Pan Am sold the building to the Metropolitan Life Insurance Company for $400 million in 1981, and the airline moved out entirely in 1991.

The largest lease transaction in the city currently on record was struck in August 1984, when financial services firm Merrill Lynch & Company committed to taking 3.9 million square feet at the World Financial Center in Battery Park City.

1938: REBNY tightens appraisal standards

Following complaints of wildly inflated appraisals during the heady decade of the 1920s, the city’s leading real estate trade association, the Real Estate Board of New York, passed stricter appraisal standards 71 years ago this month.

The vote, taken in the latter years of the Great Depression, updated the realty group’s code of ethics and sought to modernize the system by which appraisers provided valuations for real estate.

The change prescribed a certain level of experience for appraisers and tightened rules governing appraisals of vacant land compared to improved properties. It also sought to preserve the data on which an appraisal was based and clarified rules for fees and commissions.

“Too many of the valuations of the boom days turned out to be ridiculously high and too many of the so-called experts were discredited,” the New York Times wrote in an article covering the vote.

It said appraisers should not rely on exaggerated optimism and a cursory examination of property, but should pay attention to the actual or potential income of property.

At the time, real estate brokers were licensed, but there was no special license for appraisers.

The decision to tighten standards followed a meeting a week earlier in Syracuse by the six-year-old American Institute of Real Estate Appraisers that proposed comparing real estate investment returns with those of stocks, bonds or other commodities as a way to set values.

Following the savings and loan crisis of the 1980s, Congress passed a national appraisal standard in 1989 that required states, including New York, to license or certify appraisers.

1912: Assemblage complete for city’s largest hotel

The Pennsylvania Railroad purchased the final parcels needed to build the city’s largest hotel, the Hotel Pennsylvania, across Seventh Avenue from its newly constructed passenger rail station, 97 years ago this month.

The railroad used a holding company to make the purchase of the properties at 128 West 33rd Street and 137-149 West 32nd Street for an undisclosed price.

The parcels were bought two years after Pennsylvania Station, known as Penn Station, opened in 1910, occupying two city blocks between Seventh and Eighth avenues and 31st and 33rd streets.

With the purchase of the plots, the railroad controlled the western half of the city block between 32nd and 33rd streets and Sixth and Seventh avenues.

When the $10 million, 2,200-room Hotel Pennsylvania at 401 Seventh Avenue opened in January 1919, it was the largest hotel in New York City.


Compiled by Adam Pincus

In his novel “A Man in Full,” Tom Wolfe painted a classic scene (among
those who work in the bankruptcy field, anyway) from the early 1990s
real estate meltdown, of one of the workout sessions between a
distressed developer and a lender that was prevalent at the time. Things have come full circle since the 1990s, and it’s worth taking
a peek behind closed boardroom doors to see Wolfe’s portrayal of what
happens during one of these sessions when a developer is trying to hold
on to his prized buildings by restructuring his debt, while lenders are
likely asking insistently — and in a pissed off tone — “What did you do
with my money?” [more]