The Real Deal New York

Slowly, Manhattan’s residential real estate market is coming back to
life. When the city’s major brokerages released their fourth-quarter
market reports last month, they revealed a clear jump in activity. The
number of sales in the fourth quarter grew 8 percent from the same
period in 2008 and almost 11 percent from the previous quarter,
according to Prudential Douglas Elliman’s report.
But thanks to the lingering grip of the credit crunch, the vast
majority of those sales were resales in established buildings, not new
developments.
Only 19 percent of closed sales in the fourth quarter were in new
condos, according to Elliman, down from 38 percent in the fourth
quarter of 2008. By contrast, some 58 percent of closed sales in 2006
were in new developments. Meanwhile, Elliman estimated that the “shadow
inventory,” or not-yet-released new development units, may total more
than 6,000.  More
[more]

Howard Milstein is the head of Milstein Properties.

On a winter afternoon last month, sunshine streamed through the windows on the 33rd story of 30 Lincoln Plaza, illuminating the cleaning supplies and paint cans that occupy the high-ceilinged space. Innocuous though it may seem, this out-of-the-way spot is at the center of a bitter dispute now raging between the building’s tenants and the developer, the Milstein real estate family. In their quest to prevent the Milsteins from converting the rental building into condos, tenants have filed a lawsuit claiming that when 30 Lincoln Plaza was constructed three decades ago, the developer ignored city permits and added an illegal extra floor — the 33rd. Litigation is nothing new for the Milsteins. They are one of the city’s oldest and most successful real estate families, but also among the most controversial.  More

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Hundreds of dormant construction sites still dot the city, but a
handful of these beleaguered projects are finally seeing new life –
even if it’s not what was once dreamed of for the location. Those that
have seen some type of resolution were able to do so by selling off
their debt at steep discounts, slimming their construction costs or
setting their sights way lower.
This month, The Real Deal tracked down 20 stalled projects
that have seen some type of resolution within the past several months
(see chart after the jump).  More
[more]

Prices for Miami real estate have dropped as much as 43 percent from the 2006 peak

For some Manhattan renters, buying a second home is coming before buying a first. While New York real estate has seen severe discounts (Manhattan prices are down roughly 20 percent from their peak), some New Yorkers are going to real estate markets like Miami or the Hamptons that have been burned by even deeper discounts. In the Hamptons, prices have dropped as much as 30 percent since 2006, said Barbara Weber, managing director of Nest Seekers International in the Hamptons. In Miami they have dropped as much as 43 percent, compared to the city’s historic high in 2006, according to Peter Zalewski, a broker with the Bal Harbour-based Condo Vultures Realty. “You can literally buy five condos in Miami for the price of one in New York,” said Ron Shuffield, president of EWM Realtors in Miami. New Yorkers are also taking advantage of foreclosures and short sales in the Miami-Dade area, said Alfredo Vizcarrondo, president of the AV Group in Doral, a real estate company. “In the last quarter of the year, there [was] increased interest from New Yorkers,” said Vizcarrondo. He said he recently closed on properties in Miami’s Brickell area and in Aventura for prices as low as $160,000.  More

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Blackstone Properties CEO Kevin Ellerton

At the ripe old age of 24, Kevin Ellerton is managing to become one of
the most powerful players in the Lower Manhattan rental game. To hear
his competitors talk, he’s also one of the most loathed.
Ellerton is the CEO of Blackstone Properties, a company he started
less than two years ago with a high school friend, David Yomtobian.
(Ellerton’s company has no relation to the powerful private equity firm
the Blackstone Group.)
By Ellerton’s calculations, about half of all brokered rental deals
in the Financial District and Battery Park City are inked by Blackstone
agents. While executives at other Lower Manhattan firms say that number
might be closer to 40 percent, they grudgingly concede that Blackstone
has grabbed a formidable share of the rental market in a very short
period of time.  More

[more]

Major residential brokerages may still snub their noses at the listings, but a growing number of firms, particularly in the outer boroughs, are fighting for a share of the foreclosed homes market. Lenders took back thousands of homes in New York State last year and thousands more face foreclosure this year. Take Staten Island-based Wonica Realtors and Appraisers. Last year, according to founder and president George Wonica, the firm’s REO division, which specializes in marketing and selling foreclosed residential properties in Staten Island and Brooklyn, accounted for almost 80 percent of his firm’s revenue. “It carried the office,” Wonica told The Real Deal. “I’ve never seen anything like it.” The marketplace for REOs — or “Real Estate Owned” by the bank because they did not successfully sell at a foreclosure auction — is thriving in places hit hard by the housing downturn. In New York City that usually means in the outer boroughs, although Manhattan is not impervious.  More
[more]

When all else fails, there’s always the stock market. That seems to be
the mantra of many real estate companies that, faced with few options
for raising cash, are turning to the equity markets and issuing initial
public offerings.
Real estate investment trusts, or REITs, sold nearly $3 billion
worth of IPOs last year. Nine REITs went public, making REITs the
second most popular type of IPO after tech firms.
The list included some big names, such as Starwood Property Trust,
New York City-based Apollo Commercial Real Estate Finance, Colony
Financial and, most recently, Pebblebrook Hotel Trust.
Sources say these REITs are coming to market with IPOs for several key reasons.
[more]

A development site with approved plans for a 33-story mixed-use tower
at 133-135 Greenwich Street is on the market with an asking price of
$28.5 million. Plans for the site call for studios to two-bedrooms of
up to 1,268 square feet on floors six and above, with about 29,000
buildable square feet of commercial space on floors one through five.
The residential buildable square footage for the Costas
Kondylis-designed project amounts to about 128,000 square feet. David
Schectman and David Johnson of Eastern Consolidated are handling the
assignment.
[more]

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

Office leases
Retail leases
Commercial sales

Click below to view larger version

The crash of the commercial and residential real estate markets has brought its own kind of turmoil to companies that do renderings and model making: They are closing or thinning their ranks to skeleton crews. And the downturn may not just be changing the way they do business now. It could have permanent repercussions to both their workloads and the way they prepare property visuals for consumers in the future — after the economic recovery. Indeed, there’s already at least one company that’s trying to capitalize on the new emphasis that developers have put on cost-cutting with do-it-yourself rendering software. Marc Lamoureux — president and CEO of Alpha Vision Group and Pure, two sister companies based in Miami that create renderings for many New York real estate developers — said developers are increasingly making do with renderings from architects as opposed to using the more elaborate images from a professional renderer.  More
[more]

The high volume of leasing in recent months, fueled in part by tenants signing early renewals at sharply reduced prices, could come back to bite the market next year, some industry experts said. Tenants with two and three years remaining on their leases — and sometimes even four years — are signing renewals early, said Bruce Mosler, CEO and co-chairman of commercial services firm Cushman & Wakefield. “We are seeing, I think, a push to market … to take advantage of the capitulations in rents,” he said. “Which I think is creating demand in this market, and I think it will [reduce] demand in ’11 … unless we see some job growth again.” However, some brokers did not expect the same elevated levels this year. “I don’t think January will continue at the same level,” Howard Rosen, regional managing director at commercial firm Grubb & Ellis New York, said in an interview. “As far as I am concerned, the jury is out, and I don’t see job creation in Manhattan.”  More
[more]

Peter Fine

No one could blame Peter Fine if he expected the past year to be easy
– even amid the market turmoil. Widely regarded as one of the city’s
top affordable housing developers, Fine started last year as the
darling of the entertainment world, as the unlikely coproducer of a
Tony Award-winning musical.
With close ties to President Obama’s new urban development guru, he was also more politically connected than ever. However, while his Broadway show, “In the Heights,” has enjoyed
continued success, Fine’s political connections and real estate career
have taken a beating over the past year.  More

[more]

As New York City construction firms get slammed by the downturn, they are turning to more modest projects, in some cases taking on multimillion-dollar renovations rather than the multibillion-dollar skyscrapers. While it’s clear that the collapse of the New York development market has taken a toll on builders and brokers, there may be nobody in the industry hit as hard as construction firms. As banks have largely cut off financing for new projects and cranes have been mothballed, thousands of contractors have lost their jobs. “It’s having a devastating impact on the construction market,” said Lou Coletti, president of the Building Trades Employers’ Association, which represents 1,700 construction management and contractor firms. “There are very few, if any, new projects moving forward.” To combat that lack of work, major New York construction firms are bidding for much smaller projects and diversifying into public-sector work, while other firms have been forced into bankruptcy protection.  More [more]

It’s been a sort of parlor game in New York’s real estate community for
some time: speculating on whether peak-market buyers will hold on to
their highly leveraged properties.
Then, in a move that shook the industry last month, Tishman Speyer
Properties and BlackRock Realty decided to turn over the keys to the
$5.4 billion Stuyvesant Town and Peter Cooper Village.
But not everyone has gone this route. Other overextended borrowers
have kept control of their properties following a debt restructuring,
including developers Lev Leviev and Joseph Moinian.
As part of a workout — the complex process that’s often decided by
the leverage each party has in the development — the bank or private
equity firm must weigh its options.  More
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While activity remains sluggish in the New York real estate market,
there may be pockets of opportunities for profits over the next few
years for those who invest wisely.
Experts point to three areas for investors looking to lay the
groundwork for a future fortune: office towers, land and multifamily
buildings.
First, a warning or two. Many of the properties sold will go to
insiders rather than victors in a public auction process. With few
assets available for cheap prices through public listings, “smart money
will use alternative paths to get to core real estate,” said Dan
Fasulo, managing director at Real Capital Analytics.
While there will be “opportunities to pick up quality assets at
attractive prices over the next year,” he warned that “investors who
feel like we’re going to fall off a cliff … will be greatly
disappointed.”  More
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International buyers — perhaps the most overhyped group of boom-time
property seekers — are back, brokers say, and they’re richer than
ever.
While much of the meager sales activity in New York has occurred at
the lower end of the market during the past year, experts say the new
wave of foreign buyers now trolling for Manhattan property tends to be
wealthier than previous foreign buyers, and they are looking for
pricier real estate. That’s largely because the New York market is no
longer as accessible to the working-class foreigners who invested in
homes here during the mid-aughts. With mortgages rarely available to
foreigners, international buyers must now often be able to plunk down
the entire purchase price in cash. That’s just one of the ways today’s foreign shoppers are different from their boom-time counterparts. [more]

Click image for larger version

The fourth-quarter market reports revealed that the recession’s worst-hit Manhattan neighborhood isn’t newly gentrifying Harlem or even the recently residential Financial District. Midtown — one of the city’s most well-established neighborhoods — saw the sharpest price decreases, the most price cuts and the longest days on the market. What happened? Experts say Midtown West, in particular, fell prey to a hotbed of speculation during the boom, fueled by an abundance of new condos, and the area is now paying the price. During the mid-aughts, thousands of new condo units were built in Midtown and quickly snatched up by investors eager to flip them for six-figure profits in the wildly escalating market of the time. Now, while overall market activity is on the rise again, falling prices have dampened demand from investors, leaving Midtown with an oversupply of condos — and absentee owners frantically trying to unload them. Around 42nd Street, “there are large, monolithic new development buildings, with a lot of investors and pied-à-terre buyers who are now desperate to sell,” explained Sofia Song, vice president of research at StreetEasy. Comments

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Nothing says progress like Madoff. Late last month, The Real Deal broke the story that the Ponzi schemer’s Upper East Side penthouse finally appears close to a sale.
Listing brokers Anne Corey and Serena Boardman of Sotheby’s
International Realty have told interested agents that there is an
accepted offer on the 133 East 64th Street duplex. At press time, the
U.S. Marshals Service, which seized the property from the disgraced
financier, said the listing had not yet entered contract.
The sale (if it does clear the many obstacles of today’s market) may not be unqualified good news.
The penthouse’s asking price is $8.9 million, following a November
price chop of $1 million. It’s also been sitting on the market since
September.  More
[more]

52 East 4th Street

Chelsea

$825,000

222 West 14th Street

1-bedroom, 1-bath, 1,600 sf condo in a postwar elevator building (the Sequoia); 24-hour doorman; unit has renovated kitchen with stainless-steel appliances, decked balcony off the living room and city views looking north; building has gym, garage, laundry and live-in super; common charges $544 per month; taxes $552 per month; asking price $875,000; seven weeks on the market. (Brokers: Jon Capobianco, the Corcoran Group; Angela Wu, Century 21 NY Metro)

East Village

$3 million

52 East 4th Street

2-bedroom, 2-bath, 1,317 sf penthouse condo in a full-service elevator building; 24-hour doorman and concierge; unit has private roof deck, glass-enclosed living room, renovated kitchen, 13-foot ceilings and marble bathrooms; building has pool, garage, laundry and live-in super; common charges $1,811 per month; taxes $225 per year; asking price $3.25 million; 82 weeks on the market. (Brokers: Core Group Marketing; Frances Katzen, Prudential Douglas Elliman)

Greenwich Village

$7.525 million

173 MacDougal Street

3-bedroom, 4-and-a-half-bath, 4,635 sf condo in a prewar condo conversion (MacDougal Lofts); doorman; unit is a full-floor loft with heated floors, marble baths, laundry room, two gas fireplaces, views of Washington Square Park and the Empire State Building through floor-to-ceiling glass windows and from three Juliet balconies; common charges $5,233 per month; taxes $3,921; asking price $8.9 million; 62 weeks on the market. (Brokers: Julie Pham, the Corcoran Group; Todd Buchanan, Halstead Property)

Inwood

$286,000

251 Seaman Avenue

1-bedroom, 1-bath, 800 sf co-op in an Art Deco-style building; unit has hardwood floors, renovated open kitchen; building has live-in super and storage, and is located close to Inwood Hill Park and the Hudson River; maintenance $543 per month; 36 percent tax-deductible; asking price $299,000; 29 weeks on the market. (Brokers: Perry Payne, Prudential Douglas Elliman; Tony Gaskin, Lesley Steiner, Century 21 NY Metro)

Kips Bay

$429,000

66 Madison Avenue

1-bedroom, 1-bath, 700 sf co-op in a full-service prewar building (Madison Parq); 24-hour doorman; unit has 10-foot ceilings, gourmet kitchen with marble countertops; building has laundry and live-in super; maintenance $1,368 per month; 66 percent tax-deductible; asking price $429,000; four weeks on the market. (Brokers: Stacey Max, Bellmarc Realty; Tristan Harper, Prudential Douglas Elliman)

Washington Heights

$630,000

371 Fort Washington Avenue

3-bedroom, 2-bath, 1,530 sf co-op in a prewar elevator building; unit has a windowed eat-in kitchen, high ceilings and views of the George Washington Bridge; building has storage and laundry facilities; maintenance $1,133 per month; 50 percent tax-deductible; asking price $680,000; 28 weeks on the market. (Brokers: Pulat Batirbaev, Barak Realty; Perry Payne, Prudential Douglas Elliman)

Midtown East

$335,000

420 East 55th Street

542 sf studio in full-service postwar co-op (Sutton Place); 24-hour doorman; unit has hardwood floors and southern exposure; building has storage, garage, courtyard and laundry; maintenance: $552 per month; 55 percent tax-deductible; asking price: $350,000; 17 weeks on the market. (Brokers: Jane Katz, Halstead Properties; Randolph Green, Century 21 NY Metro)

Upper West Side

$645,000

201 West 70th Street

1-bedroom, 1-bathroom, 650 sf co-op in an elevator building; 24-hour doorman; concierge; unit has terrace and Hudson River views; building has roof deck, storage and laundry facilities; maintenance: $1,200 per month; asking price: $645,000; 62 weeks on the market. (Brokers: Brian Hauserman, Jessica Cohen, Michael Meyer, Nancy Rueth, Prudential Douglas Elliman; Lyon Porter, the Real Estate Group NY)

Compiled by Sarabeth Sanders

During the real estate boom, it was common and even encouraged for brokers to buy units in the new development buildings they were marketing. After all, what endorsement could be better than a six-figure down payment? But now that buyers are scarce, a number of problems with brokers purchasing units have surfaced, from unethical dilemmas with flipping to price inflation to whether brokers can be considered “bona fide” purchasers. These issues often went unnoticed when prices were roaring upward, but can threaten a condo development’s very existence in today’s litigious environment. “In the past, there was absolutely no issue because these buildings were sold out, and who cares what the broker did?” said Anne Salisbury, an attorney in the real estate litigation group at Guzov Ofsink. “Now that you’ve got empty units, it can become an issue.” For years, marketing firms urged their brokers to buy units in the new development buildings they were tasked with selling. “It’s a sort of stamp of approval for the building,” said Jennifer Lee, the director of new business development at aptsandlofts?.com, who noted that the brokerage encourages its agents to purchase property.  More

[more]

Miki Naftali and the Plaza Hotel

NOTE: CORRECTION APPENDED

The impact of the 2008 real estate crash is by no means limited to the stalled condo projects now sprinkled across the city’s skyline. New developments that sold out quickly — and were deemed great successes at the height of the market — are also facing a unique set of aftershocks from the bursting of the real estate bubble. Many of the buyers at these buildings were investors more interested in a quick, profitable flip than a place to live. That worked well for a while, but when the music stopped, many buyers were stuck with units they couldn’t afford (and never intended to), often in less-than-desirable locations. Many buyers “were anticipating the market would do really well, so they counted on being able to sell [investment properties] fairly quickly,” said Allison Scollar, a real estate attorney at Gold Scollar Moshan. “They were never intending to live there, and weren’t necessarily able to carry two apartments.” When the market crashed, some sued to get out of their contract or walked away from a sizable deposit, but others were forced to close. Now, many are selling their apartments at deep discounts, paving the way for a second round of fallout for new developments. [more]

Kathy Rudney, a broker with Prudential Douglas Elliman, is handling rentals at Columbus Square

It’s away from the heart of the Upper West Side. Its rents are up to 30 percent higher than the competition’s. And its shops more closely resemble strip-mall offerings than what’s typically found on city blocks. But Columbus Square, a mega mixed-use complex that spans six blocks from West 97th to 100th streets between Amsterdam and Columbus avenues, is posting enviable rental and retail numbers in a down market, according to brokers familiar with the project and the neighborhood. Since May, the project has leased 290 of 454 apartments in two buildings at the site, where five buildings are planned, for a rental rate of 64 percent. One-bedrooms there list for about $3,400, which dwarfs the $2,300 average that postwar equivalents in the neighborhood usually command, brokers said. Once complete, Columbus Square will have 710 apartments. Of course, with the housing market still weak, tenants are receiving generous extras from the co-developers, Stellar Management and the Chetrit Group. Those incentives include up to three months of free rent, plus coverage of the broker’s fee, for signing a 14-month lease, according to Kathy Rudney, the Prudential Douglas Elliman broker handling rentals. But the base rents, she noted, are firm.  More

[more]

Graceline Court

Construction update

Downtown Brooklyn

Be@Schermerhorn

189 Schermerhorn Street

Construction has resumed at Jamestown Properties’ 246-unit condo and is expected to finish by the end of the winter. Sales are slated to relaunch in the spring on the project, which offers studios and one- and two-bedrooms (see story on page 57). Many units will have home offices, balconies or terraces. Amenities include a fitness center, roof deck and 24-hour doorman. Corcoran Group Marketing is the agent. Contact: www.beatschermerhorn.com.

Leasing update

Downtown Brooklyn

BKLYN Gold

257 and 277 Gold Street

The leasing office at the first of Lalezarian Properties’ two-building, 137-unit rental complex — 277 Gold Street — opened at the end of October, and roughly 60 percent of the 100 released units are already occupied. One-bedrooms start at $1,799 and two-bedrooms start at $2,309 per month net, which accounts for the five months’ worth of free rent on a 26-month lease, or two months’ free rent on a 14-month lease. Leasing at its sister building, the 375-unit 257 Gold Street, is scheduled to launch in the late spring or early summer.

Sales update

Carroll Gardens

90 First Place

All five residences at the Brody Group’s luxury brownstone conversion, where sales launched in mid-April, have sold. The last contract was signed in December, and closings began in the middle of the month. The building has three two-bedroom homes and two duplexes. Asking prices ranged from $925,000 to $1.15 million. Each unit has private outdoor space, oak floors and individual climate control. Halstead Property Development Marketing was the agent. Contact: www.90firstplace.com.

Harlem
Graceline Court

106 West 116th Street

The 32-unit luxury condo is more than 65 percent sold after contracts were signed in December on four three-bedroom apartments, with asking prices ranging from $795,000 to $1.2 million. Buyers at the 16-story building, which is ready for immediate occupancy, can receive a 421-a tax abatement, and until Feb. 28 Loewen Development is offering six months of free common charges. Halstead Property Development Marketing is the exclusive agent. Contact: www.gracelinecourtcondo.com.

Midtown East

211 East 51st Street

Fannie Mae has approved HJ Development’s 14-story luxury condo conversion, meaning buyers can obtain government-backed loans with smaller down payments. The building’s offering plan was declared effective in 2008. Sales have been steady since then and, following a third-quarter surge, 37 of 70 units are now sold. Prices range from the mid-$600,000s to $4.55 million for a penthouse. Contact: www.211east51.com.

Tribeca
The Fairchild

55 Vestry Street

Gerald Longo’s new luxury condo is more than 50 percent sold, and closings are slated to begin this winter. The Karl Fischer-designed building boasts 21 townhomes, penthouses and lofts, with direct elevator entry, interiors by David Howell Design and complimentary access to the Shibui Spa at the Greenwich Hotel. Many units have 22-foot ceilings and private balconies. The De Niro Group at Prudential Douglas Elliman is the agent. Contact: www.tribecafairchild.com.

Upper West Side

Columbia House

238 West 108th Street

The six townhouse-style homes have sold out and closed at the condominium, which was developed by Larry Kaynes. Construction was completed in October 2008 on the building’s four floor-through units, garden duplex, and penthouse with a private roof deck. Asking prices ranged from roughly $1.25 to $1.76 million. Halstead Property Development Marketing was the agent for the project. Contact: www.238w108.com.

The $28 million Winnetka mansion — the priciest to hit the Chicago-area market in recent memory

Austin

The real estate market in Austin appears to be bucking a Texas trend and showing signs of stabilization, according to a report last month from the Austin Business Journal. Although the Texas capital lost 4,300 jobs between November 2008 and 2009, far more jobs were lost in Houston and Dallas, which saw losses of 88,900 and 50,700, respectively, according to the Texas Workforce Commission. The lower job-loss rate (government jobs didn’t seem to be as much of a factor) is credited with helping the housing market, according to Austin real estate expert Eldon Rude of research firm Metrostudy. Construction starts have stabilized over the last three years, while builders have been selling off more inventory than they’ve been creating, Rude said.

Boston

Harvard University has begun selling $400 million worth of tax-exempt bonds to help finance its recent expansion projects, including a new law school building. The university, the richest in the world, has almost doubled its debt in the last three years, according to Bloomberg News, due to the financial downturn and a dwindling endowment. Harvard is now moving toward refinancing some of the $6 billion in debt it currently maintains. But while parts of the school’s expansion have carried on, other projects have been put on hold. In December of last year, Harvard’s president, Drew Faust, announced that the university was halting work on a planned $1 billion science center in nearby Allston, due to new financial woes.

Chicago

A 26-room, 27,000-square-foot mansion hit the market in the Chicago suburb of Winnetka last month for $28 million, making it the area’s priciest listing in recent memory. While a 30,000-square-foot mansion with a list price of $25 million was up for sale in another suburb last year, it was eventually taken off the market. The Winnetka home is one of just nine Chicago-area homes on the market for $10 million or more. The Winnetka mansion is the only one to crack the $20 million listing price mark, according to the Chicago Tribune.

Detroit

In the wake of a financial meltdown and the population exodus that followed, Detroit millionaire money manager John Hantz, head of Hantz Financial Services, believes the former industrial powerhouse of a city could be transformed into a pastoral haven, according to Fortune magazine. Hantz contends that the abandoned land in the greater Detroit area, an estimated 40 square miles, could be put to commercial agricultural use. The idea is catching on. The American Institute of Architects concluded that “Detroit is particularly well suited to become a pioneer in urban agriculture.” Hantz, who has a personal net worth of $100 million, told Fortune that he would make a $30 million all-cash investment in the project, which he hopes will create jobs in his city’s decimated economy.

Los Angeles

Los Angeles-based home builder KB Home saw a $100.7 million profit in the fourth quarter of 2009, according to a report from Housing Wire, a Web site that covers the mortgage and financial markets. But the profit came after the company received a $191.7 million tax refund. KB Home, which operates in 11 states including California, Arizona and Nevada, would have posted a $91 million loss in the quarter had it not been for the tax return it received on boom-time profits. Still, the company’s CEO and president, Jeffrey Mezger, said, “KB Home’s 2009 fiscal year culminated with a solid fourth-quarter performance.” Even so, industry experts say KB Home will restrain its activity in the coming year. The company’s lagging home orders in Southern California, reported last month, raised concerns that the company might not be out of the woods yet. The Street noted that “a rebound … particularly in the bellwether housing market of California” would be a concrete signal of a recovery.

Miami

Bernie Kosar, the former University of Miami and Miami Dolphins quarterback, is facing a $2 million foreclosure lawsuit on his Weston mansion on Paddock Road in Windmill Ranch Estates, according to the South Florida Business Journal. Miami-based Ocean Bank sued after the football star’s Chapter 11 bankruptcy — filed after several of his real estate developments were hit with foreclosure suits in spring 2008 — became a Chapter 7 liquidation. Kosar’s debt totals $18.9 million. His assets, including a minority ownership stake in the Florida Panthers, are reportedly worth $9.2 million.

Phoenix

The end-of-the-year housing figures for Phoenix are in, and they aren’t pretty. The city saw approximately 41,000 single-family homes go into foreclosure in 2009, a record number, according to a year-end report from the W.P. Carey School of Business at Arizona State University. Foreclosures accounted for more than 35 percent of all existing-home transactions in the year. Perhaps most surprising, the residential market actually worsened in December, contrary to the stability seen in other residential markets nationwide. Over 4,000 Phoenix homes faced foreclosure in December, up from 3,000 the month before. This flies in the face of a market prediction from Mike Orr, principal with research group the Cromford Report, suggesting April 2009 was the bottom for the residential real estate market.

Washington, D.C.

A group of investors with HSBC Holdings PLC has paid $203.4 million in debt and equity for a 90 percent stake in an office building at 1625 I Street, according to Bloomberg News. The 85,000-square-foot office building was valued at about $587 per square foot, which makes it one of the priciest office real estate deals in the city in the last year. This could be good news for Washington, where the office vacancy rate ballooned to 14.7 percent in the third quarter of 2009, up from 11.9 percent during the same quarter a year earlier, according to CoStar research group.

West Palm Beach

Ocwen Loan Servicing, a West Palm Beach company and pillar of the Florida mortgage industry, has gone global. It will use a Mumbai company to set up broker opinions on the value of bank-owned foreclosure properties, arrange property cleanings and repairs, and schedule showings, according to a report from Inman News. The surge in depressed property has created a backlog so large that selling the properties has become part of the $50 billion outsourcing industry. Bank of America, JPMorgan Chase and Citibank are among the banks using overseas labor to handle their foreclosure inventory, said Joe Greco, director of the Institute for Research and Education in Outsourcing at California State University-Fullerton and the author of “The Outsourcing Bible.”

Compiled by Amy Tennery

Mary Ann Tighe, CEO of the New York Tri-State Region of CB Richard Ellis

Mary Ann Tighe is the CEO of the New York Tri-State Region of CB Richard Ellis. She has been involved in over 74.5 million square feet of commercial transactions, including Condé Nast’s move to 4 Times Square and the relocation of the New York Times to its new building on Eighth Avenue. She’s the first woman to chair the Real Estate Board of New York. After her mother and sister died of lung cancer, she and her family founded a nonprofit called Joan’s Legacy: Uniting Against Lung Cancer, which has raised $6.5 million since 2001.  More

[more]

The mini residential boom that brewed in Astoria, Queens, over the last
few years is now jockeying to find its recession-era footing.
The downturn has triggered double-digit discounts on the new upscale rentals and condos clustered in the area.
It has also halted some ambitious luxury residential projects in
the area, such as the Piano Factory, a 69-unit condo conversion on
Vernon Boulevard where sales were suspended last month.
In total, an estimated 25 new projects have either been completed in the last few years or remain in the construction phase. Among the biggest are the Piano Factory and East River Tower, a 74-unit new condo that came on the market in December. [more]

The New York City real estate world has closely followed as brokerages here have downsized and shuttered offices. But just north of the city, in Westchester, the real estate industry has quietly seen a shift of its own. Indeed, some say the brokerage world there has been irrevocably altered during the downturn as some firms have announced closures, and others have set up shop or merged with larger corporate entities, poaching agents along the way. The biggest shake-up, of course, was Sotheby’s International Realty’s October decision to terminate its presence in the county altogether. Sotheby’s sold four of its offices — its three “golden triangle” offices in Scarsdale, Rye and Larchmont, as well as one in Chappaqua — to an affiliate, William Pitt Sotheby’s International Realty. In addition, it shut down a fifth office in Katonah, farther north in Westchester. That follows Better Homes and Gardens Rand Realty, which has seven offices in Westchester with roughly 340 agents, joining the Realogy umbrella at the end of April.  More
[more]

Juny Francois, an attorney and developer, bought a Bed-Stuy brownstone in 2003 for $350,000; today it’s worth more than twice that.

Imagine you host a party and no one comes. That was broker David Behin when he unveiled the 29-unit condo project 111 Monroe last year in Bedford-Stuyvesant. He put the building, with its slick glass-and-stone façade, large, clean apartments and huge windows, on the market last January and didn’t get a single bite. “It was a project where anyone who walked into the building said, ‘Wow.’ But it was tough as nails to try to get anyone to buy,” said Behin, executive vice president of the Real Estate Group New York, a residential brokerage. “And we probably went out with prices that, even though we reduced them, were still too high.” The developers lowered the price of the units, twice. Two-bedrooms, for instance, fell from $495,000 to $450,000. The developers also offered to pay buyers’ closing costs and got the building approved for FHA loans, meaning qualified buyers could purchase units with as little as 3.5 percent down. And they could pluck down just $2,000 to sign the contract and make the rest of the down payment over time. The result? The units started moving. By December, he had contracts on half of them, he said.  More

[more]

Thirty years ago, the notion that the largely industrial area at the foot of the Manhattan and Brooklyn bridges would one day command some of the highest prices in Brooklyn real estate might have seemed about as plausible as an elephant taking wing. Nowadays, of course, Dumbo is well established as one of Brooklyn’s most sought-after neighborhoods. So much so that it has weathered the real estate downturn better than Brooklyn as a whole — a reality that the few developers planning projects in Dumbo hope continues. In December, the publicly traded luxury home builder Toll Brothers closed on a parcel of land at 205 Water Street where the firm intends to develop a condo with approximately 70 units. Toll paid $8.6 million for the land and hopes to start building by the end of the year. “Dumbo is fairly unique within the Brooklyn market,” said David Von Spreckelsen, a senior vice president with Toll Brothers. “It’s really been holding value better than the other neighborhoods in Brooklyn, and if you look at [condo] resales they’re at really strong numbers.”  More
[more]

The new Spruce Street school

Newcomers are moving Downtown for a host of reasons, from deals on apartments to historic surroundings. And increasingly, another lure is good schools. They seem to be such a selling point that many of them are now seriously overcrowded. “They play a huge part in bringing people here,” said James Attard, an associate broker with the Tribeca-based Tabak Real Estate, who’s been selling homes there for six years. Top-ranked P.S. 234 on Greenwich Street, which many call a neighborhood jewel, appears to be significantly boosting property values, even when compared to P.S. 89 in Battery Park City, which is itself prized. Indeed, from 2006 to 2010, homes in the P.S. 234 zone were listed at prices about 30 percent higher than those near P.S. 89, according to StreetEasy, the real estate data company, though other factors may be at play. That may explain why even residents who don’t have children are upset over plans by the city to alleviate the overcrowding by reassigning kids from P.S. 234, which is jam-packed, to other District 2 schools through a large-scale rezoning. Adding two schools and carving up the neighborhood into new districts is meant to address crowding. Temporary rezoning was instituted last spring; a controversial rezoning was finalized in late January.  More

[more]

A New York City housing court judge ruled recently that a market-rate
apartment at 37 Wall Street should be rent stabilized because the owner
has been receiving 421-g tax abatements from the city, Crain’s
reported. The decision, reminiscent of last year’s Stuyvesant Town
case, in which the state’s highest court ruled that landlord Tishman
Speyer had illegally deregulated units while receiving J-51 tax
abatements, could mean a return to rent stabilization for thousands of
Financial District apartments. Unlike the J-51 tax break, which was
issued to developers throughout the city, the 421-g was given
exclusively to commercial landlords in Lower Manhattan for residential
conversions. According to the Downtown Express, there are at least 16
rental buildings, with close to 5,000 units, below Murray Street
receiving 421-g tax abatements.
[more]

No one architectural firm has had a greater influence on the current complexion of 42nd Street than what was once the firm of Fox & Fowle. In its glory days around the year 2000, it was responsible for the Condé Nast Building at 4 Times Square and for the Reuters Building, directly across the street at 3 Times Square. Later, Robert F. Fox, together with his new partner Richard Cook, designed (as Cook + Fox) One Bryant Park, the new Bank of America Building on Sixth Avenue. Now there’s the nearly completed 11 Times Square, which Bruce Fowle, going solo as FXFowle, designed for the southeast corner of 42nd Street and Eighth Avenue. The most original of these projects, at least for its time, was the Condé Nast Building; the best is probably the recently completed One Bryant Park. The newest arrival, from the point of view of design, is the least successful — 11 Times Square, a structure that would look dull in any case but looks doubly so next to the far more glamorous New York Times Building designed by Renzo Piano. In fairness to 11 Times Square, let it be said that by the same logic, it gains something through its proximity to the Westin Hotel, near the northeast corner of 42nd Street and Eighth Avenue, designed by Arquitectonica. That hotel would make any building look good by comparison. The presence of the Port Authority Bus Terminal, across the street, also serves to enhance the status of the new arrival.  More
[more]

As we enter the new decade, one of the biggest questions for real estate owners and investors is whether there is “mortgage money” available for commercial real estate. I am happy to report that in my recent meetings and discussions, real estate lenders concur that there’s plenty of money to finance all kinds of projects — though under new terms and conditions. Vincent Palagiano, the chairman and CEO of the Dime Savings Bank of Williamsburg, an active lender to owners and purchasers of rent-regulated apartment buildings in New York City, said: “We are open for business, yet the demand is not there. We want to lend, yet very few investors are knocking on our doors.” The most active lenders for apartment buildings are banks, including New York Community, Capital One, Dime of Williamsburg, M & T, Signature, Amalgamated, Flushing, Astoria and Apple. Most of the local savings and commercial banks are offering funds for terms of five, seven and 10 years, in a range from $1 million to $25 million. Pricing is as low as 5 percent, with the majority of the financing from 5.25 to 5.75 percent. A number of other lenders continue to offer financing for multifamily buildings at higher rates, in the 6 percent range, including Country Bank, Bank Leumi, Sterling National and Herald National. [more]

Jason Pennington of Ripco Real Estate

Mayor Bloomberg may have declared war on high-calorie, sodium-filled diets, but New York City’s landlords seem to think fast-food joints are good for their health — their fiscal health, that is. Fast-food restaurants are under construction all over the city, gearing up to serve greasy burgers, fried chicken and burritos, as well as accompanying sugary sodas, which the Bloomberg administration portrayed as globs of fat in a glass in a recent public awareness campaign. In this tough retail climate, food and beverage leases in the city are rising faster than any other category. While they generally make up the largest portion of leases on The Real Deal‘s monthly Deal Sheet, last month the category saw 19 deals for over 70,000 square feet of retail space. That’s more than double the second most active category: fashion. And the greasy diet that landlords have signed up for is, in many cases, long-term, with 10- and 15-year leases.  More

[more]

Over the last decade, Jeff Winick, CEO of Winick Realty Group, has helped retail giants like McDonald’s, Gateway and Exxon Mobil — among many others — expand their New York footprints. His long list of deals makes him one of the city’s top retail brokers. But with the deep market freeze, many of his clients have halted expansion plans. Still, there’s a hopeful mood among the firm’s 46 brokers in his Midtown office. “Now is a great opportunity for retailers to come to New York because they can finally afford it,” he said. (Note: Correction appended) [more]

The United Nations building in New York City

Dubai has an idea to help fill its vast amount of empty office space: the United Nations. Although it may be a long shot, officials from the United Arab Emirates are making the case that the UN should consider moving its headquarters out of New York City and to Dubai, according to a Bloomberg News report. Meanwhile, the United Kingdom’s housing market showed signs of lost momentum toward the end of 2009, dashing hopes that the market was headed toward long-term residential recovery and Chinese officials are reportedly considering a property tax to thwart a possible housing bubble.

[more]

Compiled by Linden Lim

Click below to view larger version

With more retailers looking to capitalize on the downturn by opening
temporary and less expensive “pop-up” locations, it’s no wonder that
entrepreneurs have also sprouted up to help them find their short-term
homes.
Eric Anton, executive managing director at Eastern Consolidated,
and his wife, Christina Norsig, who was behind the successful launch of
eTableTop.com, an online tableware store, have founded
PopUpInsider.com, a Web site that helps match landlords with tenants
looking for temporary space. The hope, according to the Web site, is
that if the pop-up store is a success, temporary tenants will sign
long-term leases.
[more]

Residential

A.C. Lawrence & Company

Nikki Goldberg joined the company as a sales associate.

Barak Realty

Pulat Batirbaev and Amy Casey were promoted to vice president.

Benjamin James Real Estate

Neil Nerich was promoted to managing director from associate broker.

DJK Residential

Steve Azu joined the firm as a sales agent.

Harlem Lofts Inc.

Patricia McKeon joined the company as a sales agent. She was previously with Custom Brokers Soho.

Saunders & Associates

Diane Saatchi joined the Bridgehampton-based company. She was previously a senior vice president at the Corcoran Group.

Commercial

Aion Partners

Peter Smith joined the company as principal and managing director. He was previously a managing director at Credit Suisse.

CNY Builders

Jan Grimsland joined the company as director of risk management and safety. He was previously with NAB Construction.

Giscombe Realty Group

Holley Drakeford joined the company’s commercial division as a broker. He was previously with Ardor Realty.

Grubb & Ellis

Shawn Mobley was promoted to president of brokerage services from managing director in the company’s Chicago office. He will oversee the Central and Northeast regions, including New York and New Jersey.

Jones Lang LaSalle

Jay Koster was promoted to president of the company’s national capital markets group from managing director.

Rhys Commercial

Jason Wuchiski joined the company’s retail leasing division as a senior vice president. He was previously a retail brokerage specialist at FirstService Williams.

Square Foot Realty

Steve Nelson joined the company as a director. He was previously with Exit Realty.

Compiled by Linden Lim

While many commercial real estate firms have consolidated because of
the downturn, Rhys Commercial, a small commercial brokerage in
Stamford, is expanding.
The 20-person firm is opening an outpost in Manhattan in the next
two months, according to Cory Gubner, the company’s president and CEO.
It is also planning to open a New Jersey location toward the end of the
year.
These plans come on the heels of an auspicious beginning for the
firm: Rhys has signed 90 exclusive listings in its first four months.
Gubner said that while he isn’t trying to mimic the major New York City
firms, he is making sure that his company remains competitive in the
downturn. [more]

Elana Friedman, a 15-year industry veteran, has been named the
marketing director of AKA, an extended-stay luxury hotels company with
four Manhattan locations — including in Midtown North, Times Square,
Sutton Place and a spot near the United Nations. She had been the vice
president of marketing for Shvo, the eponymous luxury real estate
marketing firm and brainchild of one-time branding hotshot Michael
Shvo.
Friedman’s commercial clients have included Godiva Chocolatier, American
Express and Mercedes Benz, according to a news release sent last month.
[more]

Click below to view larger version

When the Federal Reserve Board invites comments on proposed changes to
one of its regulations, a few hundred responses typically trickle in.
But before its recent deadline for feedback on amendments that
would revise the disclosure rules for closed-end mortgages, or
mortgages that can’t be paid off until they mature, the agency was
deluged with nearly 4,000 comments.
Many came from loan originators, in New York and elsewhere, who
alleged that the Fed’s proposal to restrict a compensation practice
known as yield-spread premiums –YSPs for short — will put mortgage
brokers out of business and hamper lending.
[more]

Richard Bouchner, managing director of the Commodore Property Group

Everyone in the real estate industry knows that the price of admission for a mortgage has gone up. And just about everyone agrees there’s good reason for that, given that loose lending standards were largely responsible for the financial mess that plunged the economy into a recession and sent real estate into a tailspin. With the days of quick and easy jumbo loans and 100 percent financing now merely a memory, mortgage brokers have had to completely alter the way they do business. This month, The Real Deal talked to mortgage brokers and other mortgage industry professionals to find out how the industry is doing in New York City. While nearly everyone said business is up compared to a year ago, when they were dealing with the immediate aftermath of the Lehman debacle, new Federal guidelines designed to protect borrowers and inject more transparency into the system have slowed down the process of securing a mortgage. And the relationship between banks and mortgage brokers is strained, with fewer banks offering fewer products. As one mortgage broker said: “It’s all cookie-cutter stuff; not every borrower fits into a box neatly.” For more on which buyers and buildings are fueling mortgage activity in New York, what kinds of mortgages are being financed and the new standards mortgage brokers are dealing with, we turn to our panel of experts.  More

[more]

This much we know: There’s billions of dollars on the sidelines waiting to buy distressed real estate. But don’t be fooled: There’s also plenty of double-counting going on. Adelaide Polsinelli, for example, has been fielding countless calls from distressed real estate fund managers and vulture investors lately, all looking for New York commercial real estate at rock-bottom prices. But with sellers still unwilling to part with their properties at deep discounts, investors are getting restless. Polsinelli, a broker and associate vice president of investments at Marcus & Millichap Investment Services, said: “Investors are jumping from fund to fund in the hopes that someone is actually doing deals.” She said they’re frequently committing the same money to each of those distressed funds. In turn, those funds are going out into the marketplace touting that cash. “I wouldn’t be surprised if there were double-counting going on,” said Lawrence Lenzner, a partner at Patterson Belknap Webb & Tyler, who represents funds and property owners.  More
[more]

A brochure for 35 Prospect Park West (click image for larger version)

When a 3,500-square-foot penthouse duplex at 35 Prospect Park West came on the market in the summer of
2007, the Corcoran Group trumpeted it as “amazing, like no
other.” The five-bedroom Park Slope co-op, with its “glorious
terrace” and “most beautiful sunsets,” sold for $5.1 million
the following August. But back when the 1929-era building
was still open to renters, grandiosity didn’t quite fit.
An early advertisement for the Emery Roth-designed
building lured prospective residents with prices “below
those you might expect to find in such a fine structure and
pleasing environment.” The ad, from a new Columbia University collection of more than 9,200 real estate brochures
dating from the 1930s to the 1970s, echoes a familiar refrain in Brooklyn real estate in the eras before the borough
was trendy. [more]

Listing Web site Residential NYC doubled its listings with the Corcoran Group joining its ranks last month.
The site, operated by the Real Estate Board of New York, will now
maintain an average of 10,000 property listings at any given time, said
Steven Spinola, president of REBNY. Corcoran rental subsidiary Citi
Habitats, he added, will also add its listings to the site.
Residential NYC allows brokers to display their New York rental and sales listings. All participating firms are REBNY members.
[more]

1964: Real estate leaders oppose World Trade Center plan

Top real estate developers joined together to fight the proposed development of the 10 million-square-foot World Trade Center in Lower Manhattan, 46 years ago this month. Led by Empire State Building syndicate head Lawrence Wien, the group included Seymour Durst, Harry Helmsley and Robert Tishman.

They formed the Committee for a Reasonable World Trade Center to fight the project backed by Port of New York Authority, later renamed the Port Authority of New York and New Jersey. The group argued that the government agency, which was to receive tax breaks for the project, would be unfairly competing with private developers.

The group, claiming to represent the owners of 20 percent of the 157 million square feet of Manhattan office space, said the proposed towers (which were to be the tallest in the world) would overwhelm an already saturated market. But backers of the 16-acre project said Wien was a vocal critic only because he did not want the Empire State Building to lose its ranking as the tallest in the world, a criticism he rejected.

Forty-three years later, some of the same real estate families came out in opposition to the development of the Freedom Tower, now known as 1 World Trade Center, which will be built on the site of the since-destroyed World Trade Center. Durst’s son Douglas Durst and Wien’s grandson Anthony Malkin wrote an open letter in 2007 criticizing the development as too costly and poorly planned.

1929: For first time, stock sale finances building construction — leaving no mortgage

Riding the real estate boom of the 1920s, the developer of the Plaza Hotel joined with a bank in an unusual plan to finance the construction of two Turtle Bay apartment buildings with the public sale of stock and no mortgage, 81 years ago this month.

The buildings, at 307 and 310 East 44th Street, were the first in a larger plan to raise $100 million to develop commercial real estate with the sale of stock and do away with first and second mortgages.

United States Realty and Improvement, led by the Plaza’s Harry Black, and lender National City, used a $4 million stock issue to develop two apartment buildings to house fine artists and architects on either side of 44th Street between First and Second avenues.

“Under the proposal … the issuance of mortgages against real estate operations will be entirely eliminated,” an article at the time describing the developer’s plans said. The buildings were completed in 1930.

While it was not new to use stocks or bonds to finance real estate development — Fred French pioneered the system in the development of Tudor City on the East Side, built between 1926 and 1930 — the Beaux Arts apartment project was described as the first effort to finance real estate using stock and no mortgage.

1896: Precursor to the Real Estate Board of New York is formed

The Real Estate Board of Brokers, a trade association that later changed its name to the Real Estate Board of New York and became the leading voice for the industry in the city, was formed 114 years ago this month.

The Board of Brokers, an offshoot of the then-13-year-old Real Estate Exchange and Auction, was created to protect the interests of brokers and promote deals in an industry that handled millions of dollars of sales annually.

The founders sought to develop a place where “members can meet, where they will find all the latest information affecting real estate, and where they can meet their customers and have conveniences for the transaction of their business,” stated an article in the New York Times from February 1896.

To help the members, the board created listings for people looking to buy and sell property, and shared privileged information such as “blacklists” of defaulting tenants and unfair owners.

The group changed its name in January 1913 to reflect a representation of a wider group of interests beyond brokers.

Compiled by Adam Pincus

Back in the 1970s, Joni Mitchell sang about how “they paved paradise and put up a parking lot.”
These days in New York City, they are paving more parking lots.
Developers are replacing their dreams of paradise — shiny new
glass condo buildings — with parking lots and small, one-story
“taxpayer” buildings that will house nail salons and dry cleaners on
their stalled construction sites.
It’s not quite the opposite of paradise (the opposite of paradise
would have been the hell of early 2009), but it’s a new purgatory for
developers of some of the city’s 500 stalled construction sites.
[more]