The Real Deal New York

Citi Habitats founder Andrew Heiberger’s well-funded new brokerage, Town Residential, made a splash when it debuted late last year. But the brokerage is far from the only new business in the city. The start of 2011 ushered in a flurry of new start-ups, many with innovative new business models related to New York City real estate. Ironically, many of these models don’t involve actually doing deals. With prices down and fewer sales, entrepreneurs are looking for other ways to profit from the business of selling property. [more]

REIT bigwigs, from left: Marc Holliday (SL Green), Steven Roth (Vornado), Mort Zuckerman (Boston Properties) and Sam Zell (Equity Residential)

When you look at the ground floor, the market’s only so-so. There are still empty stores, commercial trading is slower, and apartment buildings continue to dangle incentives to get renters. But pull back, and it’s clear that many of the businesses that own these types of properties fared extremely well in the last year — particularly if they were public companies trading as real estate investment trusts, or REITs. Investor confidence in REITs sent their share prices soaring, and allowed them to outperform typical blue-chip public companies by an almost 2-to-1 margin. [more]

A penthouse at 54 Bond Street that had been on and off the market since 2009 finally went into contract last month.“It’s like being in the desert,” luxury broker Donna Olshan recently said of the inventory in the high-end Downtown Manhattan market. “There’s nothing to buy,” reiterated agent Alison Rogers of DG Neary Realty, when the fourth-quarter Manhattan market reports were released. The very beginning of the New Year is always a cyclical low point for residential inventory in New York, as sellers pull their listings from the market in the hopes of re-launching their efforts with vigor in time for the spring buying season. [more]

The Jean Nouvel tower at 100 Eleventh AvenueOutside, a late-January snowstorm has left a delicate frosting on the shimmering gray-green jumble of steel and glass that is 100 Eleventh Avenue, making the newly constructed condo tower all the more eye-catching in the flat winter light. [more]

This three-bedroom home on 41 acres in Woodstock, N.Y., sold for $899,000, just below its asking price

With the mercury low and snow continually hammering the city, escaping the five boroughs on weekends has become a must for many New Yorkers. But they may be taking cold comfort in their getaways, since their second homes aren’t worth as much as they used to be — sometimes by a long shot. From the Rockies to Central America, home values in destinations popular among New Yorkers are off by as much as 30 percent, with little price recovery seen in 2010, according to an analysis of sales data. A slew of real estate offices that lined main drags in ski-friendly towns in Vermont are shuttered. Buyers in Bermuda seem to circle endlessly without purchasing, which keeps inventory high and depresses prices, according to real estate analysts. [more]

Trevor DavisTrevor Davis could hardly be called shy, but the last few months have probably tested his stomach for public scrutiny. The down market hasn’t been kind to the gregarious, South African-born developer, known for hunting big game and taking on big, controversial projects. “He’s been a little quiet, actually,” said Dan Fasulo, managing director of research at Real Capital Analytics. “This downturn has been difficult for many local developers that didn’t have access to big institutional capital.” Much of Davis’s turmoil of late has sprung from 1055 Park Avenue, a luxury glass condo surrounded by rows of stately prewar co-ops. [more]

Not too long ago, New York City real estate was defined by the likes of the Astors and the Rockefellers. Not so anymore. While those original real estate families — from European countries like Germany and France — have made their lasting mark on the city, today’s big players are just as likely to be Jewish immigrants from Syria or Iran, or hotel developers from Taiwan or India, as they are to be from old-money European families. And while it’s impossible to broad-brush these groups because all real estate players (regardless of where they’re from) make business decisions that lead them in different directions on a daily basis, there are still some discernible fiefdoms. [more]

Young S. Woo Young S. Woo is the founder and principal partner of real estate development firm Youngwoo & Associates. He started the company in 1979 after earning a degree in architecture from the Pratt Institute. His firm recently completed the sellout of the Sky Garage condominium at 200 Eleventh Avenue, a building that includes an elevator for cars. In August 2009, the firm made headlines when it bought AIG’s two office towers, 70 Pine Street and 72 Wall Street, for $150 million, with South Korea’s Kumho Investment Bank. The firm also owns farmland in Paraguay and a winery in Argentina, and has been chosen to develop Pier 57 along the Hudson River. [more]

Stuart ElliottThe benefit of being the editor of a New York City real estate trade magazine is that you can insult the public at large with relative impunity — because they are not the primary audience. Of course, I’m kidding. But I did stumble upon a survey recently that indicates that a lot of the criticism of real estate brokers as being too boosterish may be partly misplaced. It’s actually the homeowners who are to blame. Real estate agents always get accused of being Pollyannas about the market, largely because they often push the view that prices are going to go up no matter what. But a fourth-quarter survey by home-tracking website HomeGain.com found that a greater percentage of homeowners nationally believe prices will rise in the next six months, as compared to real estate agents. [more]

Snowstorms pummeled New York City last month, snarling traffic and covering sidewalks with shoe-soaking slush. With 36 inches and counting at press time, it was the city’s snowiest January on record. Unlike other industries, real estate is strongly impacted by the weather — snow storms inspire hot chocolate and huddling under blankets, not tromping through open houses. That’s a sentiment expressed by top real estate team (and “Selling New York” stars) the Kleiers, who tweeted on Jan. 27: “Canceled our open house at our new listing at 565 Park — will reschedule in the spring when the snow stops!” [more]

Among last year’s major deals involving insurance companies were refinancings are (from left) 345 Park Avenue and 125 West 55th Street

With their recession-proof premiums still rolling in, traditionally conservative insurance companies are ramping up their investments in New York City commercial real estate. “REITs and insurance companies have the perfect storm to acquire properties,” said Jahn Brodwin, senior managing director at Manhattan consulting firm FTI Schonbraun McCann Group. “Both are looking for the same criteria. They want low-leveraged transactions with conservative underwriting and longer terms — 10-year deals as opposed to the three, five years that banks want. They are looking for stable, core properties.” [more]

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Christine QuinnCity Council Speaker Christine Quinn, 44, may soon be gunning to become New York’s first female mayor. And she appears to have a lot of support from the city’s real estate industry. Indeed, Quinn has amassed more than $3 million in current and leftover funds for a possible run in 2013, with much from usual suspects like Durst, Roth and Rudin. Though their support may make Quinn appear pro-development, she also wins praise from tenants. A former housing activist, she’s cracked down on negligent landlords, while also slamming the generally pro-landlord Rent Guidelines Board. Until this summer, her own office is on the 18th floor of 250 Broadway, where the council is based while City Hall is being refurbished. [more]

The healthy appetite from large tenants for big blocks of space seen in 2010 continued last month, with Hong Kong-based apparel company Li & Fung taking nearly 500,000 square feet in the Empire State Building, amid reports that Nomura Holding America might lease about 600,000 square feet at Worldwide Plaza. The increase in activity, especially in Midtown and Midtown South, has driven asking rents and net effective rents up. It’s also led forecasters to reassess their projections and predict record rental levels in the coming years. But despite that improvement, Downtown still remains a drag on the Manhattan office market, as it has for the past year, brokers said. Leasing volume there significantly trailed other Manhattan markets in 2010. [more]

Palm Beach

Filled with high fashion and high society, Palm Beach can seem like Manhattan but with palm trees. So it’s no surprise that New York-area real estate firms have gobbled up space there to compete for a constant stream of New Yorkers flying south to find second, third and fourth homes. Two of New York’s premier brokerages, Brown Harris Stevens and Corcoran, have operations there. Another with New York ties, Fite Shavell, formed two years ago and jumped to the top ranks of Palm Beach’s real estate world. Cofounder Wade Shavell opened the firm after helping launch Corcoran’s Palm Beach branch. He was joined by former Prudential Douglas Elliman CFO David Fite. [more]

The cycle of renters in and out of Manhattan has long been one of the city’s most predictable patterns. Young people arrive in the spring and summer, and then hunker down in their apartments, leaving the fourth quarter a relatively dead time of year, market-wise. So landlords dangle incentives to move units in the cold months. But, as with many sectors of the market, this pattern (known as “seasonality” among brokers) changed after the Lehman Brothers crash. With the sluggish economy and near-freeze on hiring, fewer of the young renters were funneled into the city during those warm months. Now that the residential market is slowly finding its footing again, it raises the question: Is seasonality back for rentals? [more]

New York City never stops changing, and the newest census proves it. Two months ago, the Census Bureau released a batch of data from the American Community Survey. Later this year, more data from the 2010 census will be released, covering everything from population density to demographic shifts. Public officials regularly talk about the political repercussions of census numbers, but what about real estate? After all, statistics covering 2006 to 2009 reflect not only the changing population, but also the effects of the recession, the housing boom and even the baby boom. [more]

Are you worried about the mortgage interest deduction going away? After all, it’s a high-profile, high-cost target for federal budget-cutters — and was prominently featured in the report of the presidential deficit-reduction commission late last year. Reformers have been trying to kill or at least clamp a ceiling on these write-offs for decades. But here’s an intriguing twist that has just emerged on Capitol Hill and that might bring some encouragement to homeowners, agents and builders who strongly oppose any cutbacks in tax benefits. According to new estimates compiled by the nonpartisan Joint Committee on Taxation — Congress’ top technical resource on all tax law matters — the mortgage interest deduction is not quite as big a hole in the federal budget as previously estimated. [more]

Bedbug complaints rose 7 percent in 2010

Residential bedbug complaints in New York City climbed 7 percent last year, statistics from the city’s Department of Housing Preservation and Development show. There were 13,472 complaints, up from 12,594 in 2009, the Wall Street Journal reported. Louis Sorkin, an entomologist at the American Museum of Natural History, said there are likely many more infestations than complaints. [more]

Honolulu

For those New York real estate professionals suffering from seasonal affective disorder, here is this month’s most unwanted news flash: The commercial market in Honolulu (yes, that Honolulu) has emerged as a rival to New York City — at least when it comes to a few key statistics. According to Moody’s CMBS index released last month, the New York Metro area scored a 77, ranking it second-best among the 56 cities tracked, behind — you guessed it — Honolulu, which scored an 81. “It is like the 90-pound weakling beating the world champ,” said Mike Hamasu, director of consulting and research for Colliers Monroe Friedlander in Honolulu and a native Hawaiian. [more]

Fulton Mall street view

Fulton Mall’s days as a sneaker store Shangri-la could be numbered. National retailers, as well as Brooklyn’s favorite hip-hop and up-and-coming real estate mogul, Jay-Z, are taking notice of Brooklyn’s busiest, and recently refurbished, retail corridor. This could mean promising days ahead for a tight-knit group of landlords controlling many of the street’s major properties. Several surnames carry considerable weight when it comes to Fulton Mall real estate–Laboz, Chera, Jemal and Sutton among them. “These families will buy anything that comes available in the area,” said Marcia Rose Yawitz, who has worked with Fulton Mall investors for years as a principal at Eastern Consolidated Real Estate Investment Services. [more]

1991: First modern co-op foreclosure sale in Manhattan

1971: Lindsay saves Fifth Avenue shopping strip

1929: Development firm General Realty launched with bevy of building buys [more]

Rather like the fabled (and fabulous) 15 Central Park West, but designed for a somewhat different clientele, Annabelle Selldorf’s 200 Eleventh Avenue has assumed a nearly mythic stature among those happy souls who take an almost libidinous interest in Manhattan real estate. Even before its completion, its soaring ceilings, its varied amenities and its location in Chelsea, overlooking the Hudson River, made it seem like some fantastic apparition to the majority of New Yorkers, who could only look into its massive windows in amazement. [more]

One Kenmare Square and developer Andre Balazs

First it was the Bowery. Now it’s Kenmare Street. The strip of retail, restaurants and mixed-used apartment buildings — which stretches from the Bowery over a few blocks to Lafayette, terminating with the iconic One Kenmare Square, codeveloped by Andre Balazs — started gentrifying about five years ago. But recently the activity and turnover there has ramped up. Once a forgotten continuation of Delancey Street, Kenmare was home to parking garages, auto mechanics, run-down bodegas, and psychics. But new restaurants and retailers are now opening alongside the parking garages and closed storefronts. “There is a huge, dramatic change going on there on Kenmare Street,” said James Famularo, managing director of retail at New York Commercial Realty Services. [more]

Rents are rising. Concessions are on the wane, and the vacancy rate in certain neighborhoods remains below 2 percent. Nevertheless, New Yorkers are winning lotteries for affordable apartments. Take this example: Recently, a young woman ran into me in the street and said she had watched one of my recent shows and “won the lottery.” I didn’t know what she meant until she explained that she learned about an affordable housing lottery from the show and lives in a new apartment building in Lower Manhattan as a result. [more]

Bradley BurwellA year and a half ago, the New York City hotel industry was hurting badly, as tourists cut back on spending and business travelers stopped calling to book rooms. But times have changed. Indeed, the industry, while not back to where it was at the market’s peak, has done a 180 and is now rebounding stronger and faster than most had expected. This month, The Real Deal talked to hotel experts not only about the key metrics for evaluating hotel performance, but also about development, hotel sales and a host of other crucial industry markers. [more]

Malls win over U.K. investors

The Drake Circus shopping mall in southwest England sold for $372 million last month, Bloomberg Businessweek reported. The 425,000-square-foot mall in Plymouth is British Land Company’s second-largest purchase in almost four years. The selling price will result in a net yield of 6 percent, according to a statement released by British Land, a real estate investment trust. [more]

Baltimore

The developer of HarborView, a waterfront resort community along Baltimore’s Inner Harbor, put up four undeveloped parcels of residential land for sale, according to Baltimore Business Journal. The sites, which were being prepared for construction before the downturn, are now being marketed by commercial real estate firm CB Richard Ellis. [more]

Bronx warehouse for sale
A 435,600-square-foot warehouse property at 825 Bronx River Avenue is on sale for $34.85 million in the Soundview section of the Bronx. The 10-acre parcel has 440,000 total buildable square feet. It is ready to lease out on a triple-net-lease basis, or an owner can construct a building to suit. CB Richard Ellis’ William Jordan and John Reinertsten are marketing the property. [more]

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The St. Claire at 2077 Fifth Avenue

Construction Update

Chelsea
500 West 23rd Street

Equity Residential topped out construction at its 14-story rental property. Architecture firm Gerner, Kronick & Valcarcel designed the building, which is adjacent to the High Line. The project was picked up a year ago by Equity’s chairman, Sam Zell, after construction stalled at the site. Residences will include studios and one-, two- and three-bedrooms. [more]

After being acquired in the spring by a California company, PropertyShark.com is seeing some big changes — starting with its office. The online real estate database company moved to 370 Lexington Avenue late last year, a space three times the size of its original office at 9 West 29th Street, according to Brian Scully, PropertyShark’s director of marketing. [more]

Several factors can ruin a deal for a potential homebuyer, from a low offer to a bad co-op interview. But during the downturn, with banks reluctant to hand out loans, one detail is particularly nettlesome: the credit score. [more]

Residential
Barak Realty
Sheila Vogel joined the firm as a vice president and associate broker. She was previously with Prudential Douglas Elliman. [more]

Sasha (left) and Malia ObamaPresident Obama’s daughters, Sasha and Malia, aren’t exactly big New York City real estate players. At ages 9 and 12, respectively, it’s safe to say that they’re more concerned with living in the White House and doing their homework than a routine building sale in Brooklyn. [more]

The Financial District Association, a neighborhood group that joins real estate experts with area retailers, has elected real estate attorney Luigi Rosabianca as the organization’s chairperson. Among the newly formed group’s priorities for the coming year are luring more retail and residential tenants to the neighborhood.
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Ed Lederman with one of his Central Park photographs, currently on display at the Tria Gallery in Chelsea
Veteran New York City real estate photographer Ed Lederman could tell by early 2008 that the market was heading for a crash. Business was good … too good. “When projects are selling themselves, there’s a lot less photography,” he said. A couple of dismal years followed, as a result of the bust. But luckily for New York, Lederman’s business these days is pleasantly thawed. [more]