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. [more]
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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.” [more]
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Blackstone Properties CEO Kevin EllertonAt 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. [more]
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From left: 360 Smith Street, 73 Pineapple Street, 303 East 51st Street, Beekman Tower and 189 Schermerhorn StreetHundreds 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]
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Mary Ann Tighe, CEO of the New York Tri-State Region of CB Richard EllisMary 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] -
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]
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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] -
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. Comments
Jason Pennington of Ripco Real EstateMayor 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. [more]
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. [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.” [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. [more]
Graceline CourtConstruction update
Downtown Brooklyn
Be@Schermerhorn
189 Schermerhorn StreetConstruction 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. [more]
Kathy Rudney, a broker with Prudential Douglas Elliman, is handling rentals at Columbus SquareIt’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. [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. [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]
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]
Peter FineNo 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]
Miki Naftali and the Plaza Hotel NOTE: CORRECTION APPENDEDThe 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. [more]
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. [more]
Click image for larger versionThe 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. Comments
Daniela Sassoun of the Corcoran Group at 110 Central Park South, which has been popular with her South American clients.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. [more]1964: Real estate leaders oppose World Trade Center plan
1929: For first time, stock sale finances building construction — leaving no mortgage
1896: Precursor to the Real Estate Board of New York is formed
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. [more]
Click chart for larger versionThirty 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. [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. [more]
The new Spruce Street schoolNewcomers 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. [more]
Prices for Miami real estate have dropped as much as 43 percent from the 2006 peakFor 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. [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. [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.” [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. [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.” [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. [more]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]
The United Nations building in New York CityDubai 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]
The $28 million Winnetka mansion — the priciest to hit the Chicago-area market in recent memoryAustin
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. [more]
Pamela LiebmanListing 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]
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) [more]
Eric Anton, the husband-and-wife founders of PopUpInsider.comWith 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. [more]
Cory GubnerWhile 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. [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. [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. [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. [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.” [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]
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.
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