The Real Deal New York

The dispute over the creation of a publicly accessible listings portal continues to stir debate and conflict between the board of New York’s largest real estate trade group and its smallest member firms. In November, the directors of the Real Estate Board of New York told members they’d have to pay for the creation of an Internet portal site that would make portions of members’ 12,000 to 15,000 exclusive property listings open to the public. REBNY Tweaks Portal Plan
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Developers spent the end of 2006 rushing to fill Manhattan’s office construction void, as a half-dozen projects in Midtown and Midtown South took major steps toward completion and plans for a new office tower were announced in Harlem. Low vacancy rates and high rents are accelerating the pace of commercial development in the borough, where only a few large towers have been built in the past several years.
Office developers pick up pace
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Even entire crowds can go upscale. While Manhattan’s most popular shopping streets, like 34th Street and 14th Street, continue to attract throngs, they are also gradually expanding or transforming themselves, while other areas are now beginning to come into their own as shopping districts.

On an informal list of the top 10 most-trafficked retail intersections put together by brokerage Newmark Knight Frank, 34th Street and Seventh Avenue came in first. The Business Improvement District for the area recorded upwards of 9,000 people per hour coming and going at peak times. (By contrast, 42nd and Fifth Avenue, which is ranked eighth on the list, has 6,600 pedestrians per hour at peak hours.)

The criteria used for the Newmark list include Business Improvement District pedestrian counts as well as some counts done by the brokerage firm, the MTA’s periodic counts of subway stop usage, and Newmark’s tracking of sales per square foot of retailers throughout the city.

“When I think of the most trafficked retail areas of the city, I think of most of the two-way streets. Going downtown to uptown: 14th Street, some of 23rd Street, 34th Street, 86th Street and 125th Street,” says Jason Pennington, director of Butler Kane Inc. All of these streets are still major contenders in the retail arena, Pennington says, but the makeup of the streets is changing.

“Eighty-sixth, 34th and 14th streets used to be very similar in a lot of ways, but now with national retailers coming in, things are a little different,” he said.

The opening of Trader Joe’s on 14th Street near Third Avenue this past year, for example, has changed where people shop in that area. “It brings people farther east than before,” Pennington says. Other national chains that have appeared on 14th Street, such as Whole Foods and DSW, have also made 14th Street more of a draw for shoppers. As the street evolves, many of the smaller retailers that have long been part of the street’s discount stores — selling luggage, batteries and sneakers, often all in one space — may have to leave as their leases come up in the next year or so, leaving landlords to entice higher-paying tenants into the spaces, Pennington says.

Large national chains that have opened on 34th Street, such as H & M and American Eagle Outfitters, have also forced some smaller stores to parts of the block that are less costly. “Some local stores, like T-shirt shops, are slowly being pushed to lower-rent parts of those streets, farther west or farther east,” Pennington says.

However, larger stores on main streets also attract the presence of smaller stores that want to pick up their traffic.

“Accessories and clothing stores want to be on 34th, 86th, or 57th if they can afford it,” says Pennington. “Both handbag boutiques and costume jewelry people want to be close to big stores; they can’t be too far off by themselves.”

86-ing weekends

One street that seems to be expanding its retail reach is 86th Street, ranked ninth on Newmark Knight Frank’s list.

“We were always aware that 86th between Lexington and Third was a true nucleus of traffic, but at one point it was a five-day-a-week location. Then, about five or six years ago, retailers really started to understand the importance of the corridor and thought, ‘We’re sitting in the midst of lots of residential property,’ so it evolved to a seven-day-a-week location,” says Fred Posniak, senior vice president of W & M Properties.

Extell Development Corporation recently cleared a site for an apartment complex with stores on the ground floor on the southeast corner of 86th and Lexington, and the retail space is already spoken for.

“Barnes & Noble and H & M pre-leased space there before they put a shovel to the ground,” according to Posniak.

In a transaction reported in last month’s issue of The Real Deal, one of W & M’s own 86th Street properties has a tenant who is so pleased with the location that they opened a second store across the street from their first.

“We reached out to one of our retailers — Sprint — a year in advance of their lease expiration,” says Posniak, “and now they have a second location across the street at $400 a square foot,” a record rent for East 86th Street, according to brokers.

Breaking down the Wall

One area of the city that is not on Newmark Knight Frank’s top 10 list but which is garnering a lot of attention from retail brokerages as the next big shopping area is the Financial District.

“Wall Street gets 16,000 people an hour,” says Darrell Rubens, managing director at Winick Realty.

While that kind of traffic would zoom it onto the top 10 list, numbers vary on pedestrian counts for Downtown. The Downtown Alliance offered the count of 120,000 people for the day at the corner of Broad and Wall, with 4,400 people at the peak lunch hour.

While the Financial District is typically perceived as dead on weekends, that is changing.

“I don’t think people understand that Wall Street is that busy and it’s getting busier every day, and every subway line converges down there,” says Rubens.

Until fairly recently, Wall Street was not considered a place to look for a residence, much less to shop, but now luxury retailers such as Tiffany & Co. and Herm s are moving Downtown.

“Retailers who were neighbors on 57th and Fifth are running Downtown. Lots of retailers want to get a good deal and be next to Tiffany’s and Herm s,” Rubens says.

Retail rents Downtown are also appealing compared to other areas of the city, though prices are starting to go up.

“As a place to do retail, it’s even a little late now because the prices are going up, but the prices are still so much more reasonable than other places in the city,” says Cheryl Cohen, vice president of Mogull Realty. “I’m currently negotiating a deal there for under $80 a square foot.”

Cohen adds that while prices are comparatively low, retail space can be very hard to find in the Wall Street area. “You have to dig for it,” she says.

The great retail way

There is one street that brokers agree is always reliable for retailers: Broadway.

It is also the street that lands most often on Newmark’s top 10 list: 34th and Broadway finished in second place, 42nd and Broadway in third, Broadway and Canal in fourth, and 14th and Broadway in seventh.

“The best street in my estimation is Broadway, from Washington Heights all the way down to the Battery,” says Cohen. “Broadway has everybody.”

Manhattan’s busiest retail intersections

1. 34th Street at Seventh Avenue

2. 34th Street at Broadway

3. Broadway at 42nd Street

4. Broadway at Canal Street

5. Lexington at 59th Street

6. 57th Street at Fifth Avenue

7. 14th Street at Broadway (Union Square)

8. 42nd Street at Fifth Avenue

9. 86th Street at Lexington Avenue

10. Columbus Circle at 59th Street

Source: Newmark Knight Frank

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The $5.4 billion sale of Peter Cooper Village and Stuyvesant Town marks the final piece of Metropolitan Life’s diversification strategy to shed about $10 billion worth of its Manhattan real estate holdings.

Although it has sold over half of its New York City portfolio, MetLife has no intention of leaving the New York City market and isn’t anticipating any large sales in the next year, said Robert Merck, a senior managing director and head of real estate investments for MetLife. The company continues to invest in real estate in Miami and internationally in Mexico, the United Kingdom, Eastern Europe and Canada.

“We sold $10 billion dollars of property,” Merck said last month. “What we had in New York City is a fairly large concentration of assets in one market. We wanted a better diversified portfolio.”

In mid-October, MetLife affiliate Metropolitan Tower Life Insurance Company grabbed headlines after selling Cooper Village and Stuy Town to Tishman Speyer and BlackRock Realty for $5.4 billion. Bids for the massive rent-stabilized residential complex of 12,232 units ranged from $4.3 billion to almost $5.5 billion. Experts say the value will double as 1,600 apartments are decontrolled over the next two years, joining the 27 percent of the property’s other apartments now at market rate.

“All the timing is right for a sale for this product type. Interest rates are low and the rental and capital markets are good,” said Eric Anton, principal at Eastern Consolidated. “MetLife had two monster assets -the MetLife building and Stuy Town — just in Manhattan. When you have all that, you want to diversify.”

Anton speculated that another reason MetLife might have wanted to sell Stuy Town was the change of power in Congress. “When government changes, it can affect affordable housing policies and it could ultimately hurt you. You never know.”

MetLife also sold One Madison Avenue to SL Green for $918 million as part of the diversification strategy.

“It’s not prudent for any major investor to have all their eggs in one basket,” said Dan Fasulo, director at research firm Real Capital Analytics. “Diversity is something that makes sense for their stake holders.”

The company’s New York City portfolio now includes 85 Broadway as well as 575 Fifth Avenue, which it bought last year from Sterling Equities for $385 million.

MetLife plans on remaining in the New York City market, since insurers of the company’s scale need at least a portion of their portfolios in top real estate markets as a hedge against outsized claims, according to brokers.

“We very much like New York City in terms of real estate investment,” Merck said. “To be a major investor, New York City is at the top of the list.”

In New York, MetLife currently has $6 billion in mortgage loans in addition to their two large properties. MetLife also has about $30 billion in commercial mortgages and about $8 billion in real estate equities.

“Pricing has gotten to a level that Manhattan real estate became too much of a piece of their portfolio,” Fasulo said of MetLife’s decision to diversify.

“We’ve seen the reverse trend,” Fasulo said. “Underweighted investors like Equity Office Properties — historically one of the major nationwide property owners — only a few years ago started purchasing in Manhattan.”

MetLife recently got its feet wet in Miami. In September, the company purchased three buildings at Waterford at Blue Lagoon Office Park in Airport West for $97.5 million from the Teachers Insurance Annuity Association.

Fasulo says that while MetLife is purchasing elsewhere, it was a logical move to sell in New York.

“When prices increase this much and when the market is so liquid, it’s hard for long-term owners not to reevaluate all their options,” Fasulo said.

According to Merck, MetLife is interested in reinvesting in New York City but has no definite plans to do so yet.

Fasulo didn’t speculate where MetLife’s profits from the $10 billion in sales may go, but said the company would use the 1031 exchange tax provision to purchase other commercial property sans taxes. A 1031 exchange allows an investor to defer capital gains taxes if the proceeds from the sale of one property — which has been owned for at least a year — are used to buy another property within 180 days.

“Rising investors are selling off assets in markets they don’t want to be in and reallocating money to other markets,” Fasulo said.

Go to chart: A look at some of MetLife’s recent NYC transactions

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Big Brooklyn rental complex to sell
A heavily subsidized 5,881-unit rental housing complex in East New York is on the sales market, according to the Slatin Report. The asking price for the 46-building Starrett City complex, now called Spring Creek Towers, could range from $1 to $1.5 billion. The ownership is a general partnership structure led by investor Disque Dean. Darcy Stacom and Bill Shanahan of CB Richard Ellis will lead the sales effort.

Many offers for 666 Fifth retail space
Kushner Companies, which bought 666 Fifth Avenue in December for $1.8 billion, has received many offers for the retail portion of the tower, the New York Post reported. Offers have reached $640 million for the 85,000 square feet of lower-level retail, where tenants now include the NBA Store, Brooks Brothers and Hickey Freeman.

Roosevelt Hotel may be sold
The 1,015-room Roosevelt Hotel at 45 East 45th Street, named in honor of President Theodore Roosevelt, may be sold, according to the New York Sun. The property is expected to fetch more than $600 million.

2 Herald Square on the market
The 360,000-square-foot Marbridge Building at 2 Herald Square, also known as 1328 Broadway, is being marketed for a price expected to top $500 million, the Post reported. The building houses retailers H & M and Victoria’s Secret. The owners, a group led by RFR Holding that includes the Goelet family, has hired the Cushman & Wakefield team of Richard Baxter, Ron Cohen, Jon Caplan and Scott Latham to lead the marketing effort.

UWS development site could fetch $120M
The New York Historical Society is selling the land and air rights at 7-13 West 76th Street, the Sun reported. A developer might be able to build a 140,000-square-foot residential tower with community facility space for the Historical Society on the lot. It could fetch a price of $800 to $900 a developable foot, or more than $120 million.

Building near Stuy Town on the market
New York Downtown Hospital has retained an investment banker to sell the 12-story mixed-use residential building at 318 East 15th Street, the Sun reported. The 104,000-square-foot building, erected in 1965, is expected to fetch more than $500 a square foot, or approximately $52 million.

Murray Hill commercial building for sale
The elevator commercial building at 30 East 39th Street is available for triple net lease or sale. The asking price is $500,000 per year for the triple net lease, or $8.5 million for an outright sale. The building was originally built 100 years ago, rebuilt in 1953 and gut renovated in 2002. Thomas Donovan, Matthew Parvin and John Ciraulo of Massey Knakal are the exclusive agents.

Harlem development sites on the block
Two non-contiguous parcels of vacant land at 117 West 123rd Street and 129-31 West 123rd Street are on the market for sale with an asking price of $8.495 million. Shimon Shkury, Michael Tortorici and Victor Sozio of Massey Knakal are the exclusive agents handling the transaction.

Municipal Building for sale?
Speculation abounds that the iconic, city-owned Municipal Building at One Centre Street could be among city-owned assets sold to private developers, according to the Sun. The 39-story limestone tower has long been home to city offices, but Mayor Bloomberg and developer Larry Silverstein have struck a deal to move many city agencies to 600,000 square feet in Tower 4 of the World Trade Center once that building is completed. Properties sold by the city would likely be converted for residential use.

Building sales possible at St. Vincent’s
Saint Vincent’s Catholic Medical Centers is “keeping all options on the table” about real estate decisions at its main Manhattan campus, hospital officials say. St. Vincent’s has retained real estate advisory firm CIT to help evaluate options for its Downtown campus, anchored on West 12th Street and Seventh Avenue in Greenwich Village. The hospital would consult with area residents and city officials before making a decision on whether to sell or refit its buildings.

Six Soho buildings on the block
A portfolio of six cast-iron buildings, located at 32-34, 65-67 and 72-76 Greene Street, is on the market for sale. The buildings total 77,000 square feet of above-ground space, of which nearly 70 percent will be delivered vacant. The properties can accommodate a variety of uses, including office, hotel and residential. Vin Carrega and Neil Helman of Grubb & Ellis are marketing the portfolio for the seller.

Astoria office building for sale
The free-standing, two-story, 20,000-square-foot office building at 36-31 38th Street, near Kaufman Astoria Studios in Queens, is on the market for sale. Gail Roseman of Sholom & Zuckerbrot is representing the building.

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Sometimes the latest thing is also the lamest, particularly in poorly designed and shoddily built residential projects.

Missing dining rooms, shallow closets and low ceilings are some examples of sloppy work or mistakes developers and architects appear to be repeating in projects all over the city.

Some of these errors are simply examples of lousy workmanship, but others may come from communication glitches between developers, architects and brokers when they collaborate on the development and marketing of new residential properties.

When The Real Deal explored design shortcomings, pet peeves cropped up, but so did the underlying tension and delicate balance of power between these groups.

Max Dobens, a vice president at Prudential Douglas Elliman, said: “Anybody with $10 million and half a quarter of ambition is a real estate developer in New York. You have guys with sub-standard ethics and no experience running around out there building and designing things without any proper thought as to how they’re going to resell it. That’s a bit dangerous, I think.”

Poor planning by these types of developers leads to designs that sacrifice livability, Dobens said.

“There’s too much selling the sizzle of the steak and not enough functionality today,” he said.

The C line at the Impala at 404 East 76th Street, for example, has two-foot closets and no dining area.

“Anyone who buys a $1 million apartment has a couple coats. It’s a bit absurd,” Dobens said. “When you have a family and kids, you have strollers and diapers and golf clubs.”

Dobens recommends that all buildings dig one story deeper and install storage bins for every apartment in addition to providing reasonable closet space. He also suggested that no two-bedroom apartment should have fewer than 1,100 square feet.

Alissa Bucher of Rogers Marvel Architects agreed with Dobens about the unscrupulousness of some developers. “Almost everything that you can’t see ends up being scrimped on,” she said, citing infrastructure and materials as examples.

Bucher and other architects, brokers and developers emphasized the importance of finding the correct mix of apartments in a building.

William Ross, the executive director of sales at Halstead Brooklyn, said, “You have to identify your potential buyer before laying out your very first apartment, because the unit mix and the sizes within that mix are imperative to directing the architect.”

Certain neighborhoods call for young singles, young couples and very few kids, Ross explained.

Ross cited 110 Livingston, developer David Walentas’ conversion of the former Board of Education headquarters in Downtown Brooklyn, as an excellent example of unit mix, design and sizing of apartments.

Yet some new projects in Williamsburg, he said, have poor unit planning as well as extremely low ceiling heights and small closet space.

The black sheep of Williams-burg, 55 Berry Street, offers examples of practically everyone’s idea of design problems: poor unit planning, low ceilings, little closet space and bathrooms without bathtubs.

“The theory of the architects is that buyers won’t notice,” Ross said. But “buyers have a lot of choice all over the city and they are extremely sophisticated.”

Ross, whose job involves reviewing blueprints for errors, has found several other common — and avoidable — design flaws. He said that 50 percent of architects make fundamental mistakes in laying out kitchens, failing to make enough space for full-sized refrigerators, sinks and stoves.

Ross also highlighted the impracticality of a kitchen island in a small kitchen/dining space.

“Too many people are following too many trends,” he said. “The presumption that grown-up people, spending hundreds of thousands of dollars, are going to eat at the kitchen island is absolutely wrong.”

Developers, often blamed for cutting corners over preoccupation with the bottom line, said common errors start with laying out a building based on brokers’ impressions of the market.

“What I don’t understand is that I rarely see anyone using the amenities,” said Donald Capoccia, a principal with developer BFC Partners, which developed Schaefer Landing on the Williamsburg waterfront.

“Gyms, lounges, playrooms: I know they’re very helpful in the marketing of a project. But Schaefer Landing has about 6,000 feet of amenity space — a library, a lounge — and they are very underutilized.”

“We’re better off spending the money on improvements to the space than the expansiveness of the space,” he said.

But buyers can find gems instead of lemons by moving where brokers and developers move. Dobens, for example, lives at the Dunhill at 401 East 84th Street, in the same building as the developer, Arun Bhatia. “When I sell at the Dunhill, and the developer still lives there, I’m not just making a quick buck,” he said. “I put my money where my mouth is.”

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Chelsea
124 W 24 Residences
124 West 24th Street
Grasso Holdings is developing the 20-unit condominium, where units range in size from 1,091 to 1,179 square feet. A model apartment is currently open, and prices for available units range from $996,500 to $1.495 million. Completion is slated for April or May 2007. Halstead Property is the sales and marketing agent. Contact: www.124w24.com.

Chelsea
316 11th Avenue
Douglaston Development is developing the 34-story, 370-unit 80/20 rental tower, the New York Sun reported. The New York State Housing Finance Agency approved $191.5 million in bonds for the project in November. Twenty percent of the units will be available to families earning no more than 50 percent of the New York City area median income — approximately $70,000 per year.

Downtown Brooklyn
Oro Condominiums
306 Gold Street
The 40-story condominium will be the tallest new construction building in Brooklyn when completed in 2008, the New York Post reported. Designed by Ismael Leyva, the 400-foot building will have 303 studio, one-, two- and three-bedroom units priced from the low $300,000s. Apartments on higher floors will have views of Brooklyn, Manhattan, Long Island City, the Verrazano Bridge, the East River and even parts of the Hudson River. Amenities will include a lap pool, indoor basketball court, gym and screening room. The project will open for sales in summer 2007. Contact: www.orocondos.com.

East Williamsburg
196 Scholes Street
Dunlop & Craig Ltd. is developing the condominium, which will offer eight units ranging in size from a 740-square-foot one-bedroom to a 1,020-square-foot garden duplex. Each unit will have private outdoor space: roof terraces, balconies or gardens. Prices range from $495,000 to $560,000. Vintage Builders is the construction manager. The exclusive marketing and sales agent is aptsandlofts.com. Contact: www.196scholes.com.

Jamaica Estates
Windsor Condominiums
178-38 Wexford Terrace
New City Builders is developing the six-story, 24-unit ground-up condominium in Queens. Thomas Cusanelli designed the Tudor-style building, which offers two-bedrooms ranging in size from 713 to 863 square feet. Many units will have either outdoor terraces or balconies. Sales are under way, with prices for available units running from $492,500 to $625,000. Completion is slated for early 2007. The Developers Group is handling marketing and sales. Contact: www.thedevelopersgroup.com.

Long Island City
View59
24-15 Queens Plaza North
Crescent Street LLC is developing the 11-story, 39-unit ground-up condominium, which will include 4,400 square feet of retail space. Architect Karl Fisher, along with interior designer Andres Escobar, designed the units, which will range in size from a 687-square-foot one-bedroom to a 2,211-square-foot two-bedroom penthouse. The off-site sales center opened in late October. Prices start at approximately $410,000, and 16 units had sold by the start of December. The building is slated for occupancy in fall 2007. The Developers Group is the exclusive sales and marketing agent. Contact: www.view59.com.

Lower Manhattan
25 Broad Street
The building is being converted to condominiums and will offer 346 units ranging from 718-square-foot one-bedrooms to 2,540-square-foot three-bedrooms, the Post reported. Prices will run from $750,000 to $3 million when the sales office opens this month. The building will also house Salon 25, a full-service spa. Contact: www.25broad.com.

Midtown East
441 East 57th Street
Sales have opened for the eight-unit condominium designed and developed by Flank Architecture and Development. Prices for available units range from $2.8 million for a 1,645-square-foot two-bedroom to $5.995 million for the 3,075-square-foot penthouse. The Corcoran Group is the exclusive sales and marketing agent. Contact: www.441east57.com.

Riverdale
Arlington Suites
3220 Arlington Avenue
The 13-story, 26-unit condominium in the Bronx will feature amenities geared to observant Jews, including a designated Sabbath elevator that is programmed to continually stop on each floor from sundown on Fridays through sundown on Saturdays. The two- to four-bedroom units will range in size from 1,872 to 3,333 square feet; all will have floor-to-ceiling windows with at least two exposures. Kitchens will include double sinks and double-drawer Viking ovens. Shmuel Jonas is the developer; Meltzer/Mandl Architects designed the project. Occupancy is scheduled for early 2008.

Tribeca
Broadway between White and Franklin streets
A 21-story luxury condominium with ground-floor retail space is planned for the west side of Broadway between White and Franklin streets. Access to the retail stores will be on Broadway, while residents will have an entrance on Franklin Place, a private street on the west side of the property. The development plan calls for 20-foot ceilings and large floorplates. Canyon Capital Realty Advisors and Pantheon Financial financed a $28.25 million senior bridge loan to New York City-based developer Sleepy Hudson LLC for the acquisition of the land.

Union Square
15 Union Square West
Brack Capital Real Estate USA bought the seven-story, 81,000-square-foot building from Amalgamated Bank and plans to convert it into luxury residential condominiums with high-end retail. The building dates back to 1870, when it was built as the home of Tiffany and Co. Perkins Eastman Architects and designer Vicente Wolf will work on the conversion. Corcoran Group Marketing was selected to market the property.

Upper East Side
Maison East
1438 Third Avenue
The on-site sales office and model units have officially opened at Broad Street Development’s 100-unit condominium. The 31-story building was originally built in 1986 and has undergone an extensive renovation. Most units have outdoor space, and many of the two- and three-bedrooms have multiple balconies. One- to three-bedroom units range in size from 779 to 1,690 square feet. Prices for available units run from $805,000 for a one-bedroom to $2.16 million for a three-bedroom. Occupancy is slated for early 2007. Prudential Douglas Elliman is the exclusive sales agent. Contact: www.maisoneast.com.

Williamsburg
510 Driggs Avenue
Kalmon Dolgin Affiliates has broken ground on the six-story, 55,000-square-foot luxury rental designed by architect Stephen B. Jacobs. The 50-unit project will offer 25 one-bedrooms and 25 two-bedrooms, all of which will have terraces. Projected monthly rents are expected to run from $2,500 for a 610-square-foot one-bedroom to $3,850 for a 1,000-square-foot two-bedroom; penthouses will rent for approximately $5,000 per month. Model apartments will be ready for viewing in November 2007, with occupancy expected in spring 2008. Contact: www.kalmondolgin.com.

Construction Update

Battery Park City
Millennium Tower Residences
30 West Street
Residents were expected in December to begin moving into the 35-story, 236-unit condominium designed by Handel Architects. The project will be LEED Gold-certified as an environmentally-friendly green building.

Harlem
111 Central Park North
A topping-off ceremony was held in early December for the 20-story, 48-unit condominium, the Sun reported. Thirty percent of the units have been pre-sold, including a complete floor of 5,200 square feet for approximately $1,200 per square foot. Contact: www.111centralparknorth.com.

Upper West Side
44 West 63rd Street
The Chetrit Group has scrapped plans to convert the Empire Hotel into 125 luxury condominiums, according to Crain’s. The developer is instead repositioning the building as a 440-room upscale hotel.

Financing

Borough Park
The Sterling Condominiums
4102 13th Avenue
Marcus & Millichap Capital Corporation arranged a $10.4 million adjustable-rate loan for the construction of the seven-story, 21-unit condominium. The 42,000-square-foot building will also include 7,600 square feet of ground-floor retail space and 8,000 square feet of below-grade parking. Construction is expected to be completed by early 2008.

Gravesend
2729 Shell Road
Hudson Realty Capital has provided a $6.3 million loan to 2729 Shell Road Development LLC for the development of a middle-market, 21-unit condominium at the intersection of Shell Road and Avenue Z in Brooklyn. The three-story project offers one- and two-bedroom units, as well as 14 below-grade parking spaces. The Corcoran Group will market units for sale.

Lower Manhattan
20 Pine The Collection
20 Pine Street
Apollo Real Estate Advisors’ debt investment fund, Apollo Real Estate Finance Corporation, has provided $90 million in mezzanine financing for the 38-story, 409-unit luxury condominium conversion.

Lower Manhattan
201 Pearl Street
The New York City Housing Development Corporation recently approved $90 million in Liberty Bonds to finance construction of the 29-story, 189-unit rental, the Sun reported. The Rockrose Organization is the developer.

Midtown West
Southwest corner of 44th Street and Eighth Avenue
The state Housing Finance Agency was expected in December to approve $204 million in bond financing for the Witkoff Organization’s 34-story, 309-unit 80/20 rental tower, according to the Sun. The mixed-use building will also have retail and a garage with 458 parking spaces.

West Village
70 Bethune Street
Hypo Real Estate Capital Corporation closed a $165 million construction loan for the 15-story residential condominium on the former site of the Superior Ink Company. The developer is the Related Companies, under the corporate designation of Bethune West Associates. The planned condominium will occupy an entire block of West Street, with frontage on Bethune and 12th streets. It will offer a mix of luxury residences that includes townhouses.

Sales Update

Carroll Gardens
52 Dean Street
Recal Associates and WexTrust Capital have opened sales at the five-story, 23-unit condominium. One- to three-bedroom units range in size from 776 to 2,868 square feet; most units have fireplaces and outside balconies. The project also includes penthouse units, a townhouse-style triplex with private garden and 23 parking spaces.

Downtown Brooklyn
110 Livingston Street
As of early December, 162 of the condominium’s 300 units had been sold, the New York Daily News reported. Prices have averaged $678 per square foot. Contact: www.110livingston.com.

Greenwich Village
184 Thompson Street
The eight-story, 125-unit condominium was 45 percent sold as of early December, five weeks after the opening of the on-site sales office. The Developers Group is the exclusive sales and marketing agent. Contact: www.184thompson.com.

Upper East Side
170 East End Avenue
Skyline Developers’ 110-unit condominium reportedly experienced sales of more than $22 million during the week preceding Thanksgiving. Most of the units are three-, four- and five-bedrooms ranging in size from 1,751 to 4,924 square feet. Prices run from $1.1 to $15 million. The Sunshine Group is the exclusive marketing and sales agent. Contact: www.170eea.com.

Upper East Side
985 Park Avenue
By the end of November — six months after the start of sales — four of the condominium’s seven units had sold. The duplexes and triplexes, which range in size from 2,469 to 3,100 square feet, start at $5.3 million. Completion is slated for spring 2007. Fox-Miller Marketing Services is handling sales. Contact: www.985park.com.

Williamsburg
North8 Condominiums
49 North 8th Street
Sales are under way for the one- to three-bedroom units at Toll Brothers’ six-story condominium. Amenities include private rooftop cabanas; townhouse residences have floor-to-ceiling windows and views of Manhattan. Prices start at $500,000. Occupancy is scheduled for spring 2007. Halstead Property is the exclusive marketing agent. Contact: www.north8condos.com.

Development in Brief

Manhattan (north to south)

127th Street between Fifth and Lenox avenues
R & B Development is building a ground-up condominium project with 23 units ranging in size from 800 to 1,750 square feet, the New York Sun reported. The developer is also working on the 11-unit Soho North condominium at 267 West 124th Street.

808 Columbus Avenue
Stellar Management is developing a new residential rental tower at the site, which spans 97th to 100th streets on three contiguous blocks. The project will also include 220,000 square feet of retail. It will be ready for occupancy in 2008, the Sun reported.

Block bounded by Ninth and 10th avenues and 16th and 17th streets
The Related Companies and Taconic Investment Partners are building a mixed-use building with 288 rental units, 20 percent of which will be reserved for affordable housing. The top portion of the tower will have residential condominiums, the Sun reported.

157 Chambers Street
BKSK Architects is working with Tribeca Associates on the conversion of the 16-story commercial building into 45 luxury apartments, the Sun reported.

95 Wall Street
If the Moinian Group does not find a commercial tenant to lease the building before the summer, it will proceed with its prior plan to convert it into a residential condominium, Crain’s reported. Funding and proper permits are in place to convert the 500,000-square-foot office tower.

New Developments from Previous Month

Atlanta

Residential/Commercial
Three and a half blocks in Buckhead Village in Atlanta are set to be demolished next year and replaced by condos and luxury retail. Developer Ben Carter is redeveloping more than seven acres of the historic saloon district into an $800 million mixed-use project with retail, hotels and mid-rise condos. The project, Buckhead Avenues, is expected to open in 2009, the Atlanta Journal-Constitution reported. The development calls for 375,000 square feet of retail and restaurant space and more than 70,000 square feet of office space. The tallest building, at 18 stories, would have hotel rooms and residential units. The redevelopment would overturn the neighborhood’s notorious, alcohol-soaked history.

Boston

Commercial
Investor interest in lab property in Cambridge is at an all-time high, the Boston Business Journal reported. Money pouring into the life sciences sector in the neighborhood has seen a five-fold increase in the past three years, largely a result of the limited supply of lab buildings and the competition between major life science real estate investment trusts. In 2006, $823 million was spent on 2.1 million square feet of lab property in Cambridge. Before 2005 the only lab building sold in Cambridge was at 620 Memorial Drive, which sold in 2004 for $46.5 million, or $508 per square foot. State-of-the-art lab buildings can now sell for up to $1,000 per square foot. Two REITs in particular — Alexandria Real Estate Equities and BioMed Realty Trust — have spent increasingly large sums of money to acquire lab properties.

Residential
Some Boston neighborhoods are fighting back against the increasing number of college students taking up residence. Students, who for years have lived in large numbers in neighborhoods such as the Fenway and Allston/Brighton, are increasingly moving to other neighborhoods around the city, the Boston Globe reported. Statistics show sharp increases in the number of students living off campus in neighborhoods including Beacon Hill and Mission Hill in Roxbury. On Beacon Hill and in the West End, the number of Suffolk University and Northeastern University students increased from 344 in 2005 to 635 in 2006, according to a student housing census the Boston Redevelopment Authority began last year. Some residents say the influx of students is responsible for noise and public safety concerns.

Chicago

Commercial
Investors are taking advantage of Chicago’s rebounding hotel market, which has been somewhat slower to recover than New York City’s. Both occupancy and room rates are on an upward trend, Commercial Property News reported. According to Smith Travel Research, the average daily room rate in Chicago this fall was up to $119 from $107 a year ago. Occupancy increased to 68 percent from nearly 65 percent during the same period a year ago. Investors have been making large hotel purchases, including DiamondRock Hospitality’s purchase of the Conrad Chicago Hotel on North Michigan Avenue on the Magnificent Mile for $118 million, or $400,000 per room. One analyst said the city has around 1,200 rooms at the high end of the market but could support more than that number.

Las Vegas

Residential/Commercial
The Clark County School District, which includes Las Vegas, is struggling with its fast-growing population. The school system adds about a dozen schools a year and has become the fifth-largest in the nation, the Las Vegas Sun reported. This year, it topped 300,000 students at 325 campuses, and the district is looking at putting more schools on year-around schedules — a move generally opposed by parents. Proceeds from a $3.5 billion bond measure approved by voters in 1998 are almost spent, and the district says it will be short by as many as eight elementary schools in 2008.

Los Angeles

Residential
In November, the statewide median price of an existing single-family home was $555,290, up 1.4 percent from a year earlier and 0.7 percent higher than in October, according to the California Association of Realtors. Sellers may be getting more realistic about pricing their properties, according to the Los Angeles Times. In April, the median sale price of an existing California home was 10 percent lower than the original list price. By November, that gap had closed to nearly zero.

Phoenix

Residential
Arizona became the fastest-growing state in the nation last year, according to new U.S. Census Bureau report. Arizona added 213,000 residents between July 1, 2005, and July 1, 2006 — growing at a 3.6 percent pace and narrowly beating out perennial first-place finisher Nevada, which grew at a rate of 3.5 percent. Cities like Phoenix are increasingly seeing migration from California. Demographers say that most of Arizona’s growth comes from “in-migration” — residents of other parts of the country, especially Southern California, resettling there.

Commercial
Two office buildings in northwest Phoenix sold last month for $91 million to a Detroit-based pension fund, the Arizona Republic reported. The buildings, located at 3151 and 3202 West Behrend Drive, are occupied by American Express. Brokers say the combined purchases are significant in Phoenix’s office building sales market, where the average deal is $15 to $20 million.

San Francisco

Commercial
Hotels in San Francisco are spending green to go green. San Francisco’s hotel industry is cutting back on toxic chemicals and energy bills, the San Francisco Chronicle reported. The Orchard Garden Hotel, set to open in a newly constructed $25 million building at 466 Bush Street, will be one of only four operating hotels in the nation certified by the nonprofit U.S. Green Building Council. The hotel will use a cardkey system, already in widespread use in Asia and Europe, that starts or stops power to a room when the guest enters or leaves, cutting energy use. The hotel will also use old-school soap and water to wash bedding instead of dry cleaning. The Ritz-Carlton Hotel in San Francisco installed a power system a year ago that enables the hotel to generate some of its own electricity rather than having to rely on the municipal power grid.

Residential
While Bay Area prices are still mostly holding their own, the Sacramento residential market has been faltering. That’s particularly been the case in the new home market. The median price of a new house in Sacramento County fell 14.6 percent in November to $395,250 compared with a year prior, according to DataQuick Information Systems. Developers are offering perks including higher-quality appliances, mortgage discounts and swimming pools. The incentives and price cuts have created an unusual situation where it’s cheaper to buy a new house than an old one, the San Francisco Chronicle reported.

Washington, D.C.

Residential
The D.C. housing market saw prices remain relatively flat near the close of 2006. The median price for a house in the D.C. area was down 2 percent to $450,000 from November 2005 to November 2006, the Washington Post reported. The area is faring better than the United States as a whole, however. In October, the latest month for which figures were available, the median sales price of a single-family house dropped 3.5 percent to $221,000. That was the largest year-to-year decline on record, according to the National Association of Realtors.

Residential/Commercial
The area where Foggy Bottom runs into Georgetown is seeing a spate of new development. Washington’s West End is getting 92 condominiums in a project called 22 West by Georgetown developer Anthony Lanier. The $100 million project at 22nd and M streets NW will have units ranging from $700,000 for a one-bedroom to $3 million for a three-bedroom with den. The project is scheduled for completion in the first quarter of 2008, the Washington Post reported. The former Columbia Hospital nearby is being converted to housing, and at 24th and M streets developer JBG Cos. of Chevy Chase has an apartment project. The 414-room Washington Marriott at M and 22nd is undergoing a $6 million renovation that will be done in the spring of next year, and the Renaissance M Street Hotel is undergoing a $26 million overhaul.

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Residential

City Connections Realty
James Fegan joined as an agent. He was previously at Citi Habitats.

Coldwell Banker Hunt Kennedy
Andrew Lampach joined as Web site manager.

The Corcoran Group
Susan Sears joined as senior vice president of the Chelsea/Flatiron branch. She was a founding partner of Bascom and Sears Real Estate.

Prudential Douglas Elliman
Yuval Vidal joined the firm as an associate broker. He was previously at Barak Realty.

The Real Estate Group NY
Staci Heather Reed joined as listings manager.

Topdot Mortgage
Rob Diodato was appointed head of the Midtown office.

Commercial

ABS Partners Real Estate
Joanna Goldstein joined as a sales associate.

Apollo Real Estate Advisors
Paul Simmons joined as partner responsible for acquisitions and business development. He was previously a managing director at GE Commercial Finance Real Estate.

CitySites Office Group
Herbert Hirsch joined as vice president.

CRESA Partners
Cecilia Francis joined as an associate. She had been a sales agent at Platinum Properties.

Cushman & Wakefield
Bruce Ficke joined as executive vice president of global client solutions. He was previously international director of corporate solutions for Jones Lang LaSalle. Diana Biasotti and LeRoy Wilde were promoted to the post of managing director. Both had been directors.

Equity Office Properties
Gerard Schumm joined as vice president of operations. He was formerly a senior vice president with Trizec Properties.

Itzhaki Properties
Ivan Hakimian was promoted to senior group manager.

Landair Project Resources
Peter Cassler was promoted to vice president of planning and construction. Phillip Rutherford was promoted to vice president of real estate development. Both were previously senior project managers.

Massey Knakal
Geoffrey Bailey joined the Brooklyn office as director of sales covering Canarsie. Anthony Iannaci joined the Queens office as sales manager. Shirley Rosado is now executive assistant to founding partner Paul Massey. Amy Jam joined as an executive assistant to partner Shimon Shkury in the Northern Manhattan/Bronx division. Annie Herrick was promoted to event manager.

Meridian Capital Group
Angela Mirizzi-Olsen joined as an executive vice president. She was formerly a senior executive at Lightstone Real Estate Partners.

Praedium Group
Michelle Wells joined as vice president. She had been vice president at AIG Global Real Estate.

The Winter Organization
David Kaufman joined as director of leasing. He was formerly vice president and director of leasing at Trizec Properties.

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When the housing market is hurting, humor may be the only medicine.

Flipper Nation, a new online video series, is gaining popularity for its satirical storyline of two real estate housing flippers out to make a quick buck as the bubble is threatening to burst.

Bob Gustafson and Alec McNayr combined their own experiences of investing in Los Angeles real estate to tell the story of two housing flippers — Richie Tatum and David Kimball — who are convinced the name of the game is to make more money.

“We make fun of those people jumping in trying to get rich quick — the two investors, the contractor, the landscaper, the Realtor and mortgage broker. We play off those personas,” said Gustafson, who became partners with McNayr after studying at Groundlings in Los Angeles, an improv theater company.

“We’ve gotten a lot of good feedback,” McNayr said. “The comments say it hits a little too close to home.”

Over 75 different blogs from Boston, Seattle, Los Angeles and New York have linked to Flipper Nation.

Flipper Nation has received subscriptions to their video podcast from as far as Belgium and Singapore.

Gustafson and McNayr say they will pitch a television show to cable networks. The duo is also planning a storyline about New York City’s real estate market.

“This is a project we think is ready for an audience right now,” Gustafson said. “There is plenty of discussion to take the show on the road. We can find comedy in any market.”

The third episode will be posted on the Flipper Nation Web site, www.flippernation.com, on Jan. 9.

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