The Real Deal New York

Shakeup after Marra Departs to Brown Harris Stevens; new owner could be on the way [more]

Michael and Paul Ippolito

Executive VPs and Principals, Newmark & Co.

–Although the Ippolito brothers, Michael and Paul, joined Newmark at a difficult time, they were rescued by a winning attitude. “We came to Newmark in 1991 at a very hard time and we needed to be creative with ideas and solutions in a market where things weren’t happening,” said Michael, who arrived from Helmsley-Spear’s Empire State Building office while older brother Paul sold ad space for a publisher. In today’s more sophisticated environment where deals call for “more analytical work, due diligence and strategic thought” creativity has served the Ippolitos well. The reward is considerable peer respect and current recognition as Newmark’s top brokers for 2003, which Michael Ippolito describes as “a very, very busy year.”

The Ippolitos teamed up in 1996 and now head an 11-person team that handles both strategic and transactional work for clients on a global scale cutting across different cultures and currencies. The team’s most remarkable transaction in 2003 was a 475,000 square foot deal that negotiated long-term client Double Click out of a 400,000 square foot space at 450 West 33rd Street and relocated the company to a 75,000 square foot space at 111 Eighth Avenue. The deal was not easy considering there was better space in other parts of the city, but in the end, the team got former Rockefeller Center tenant the Associated Press to take up 300,000 square feet, with the other 100,000 square feet going to St. Vincent’s Hospital.

Given the global scale of their transactions and the division of labor involved, the Ippolitos consider their two-man team model indispensable. “You couldn’t do the kind of work we do without a team. It would be physically impossible,” Paul says.

Mitch Steir

President & CEO, Studley

–Mitch Steir found his niche in life when he stopped selling computers and moved into commercial real estate in the early 1980s. “Being a real estate broker is in my blood and I’m glad we found each other,” said Steir, who arrived at Studley in 1988 after starting out at Huberth and Peters, an old New York real estate company that broke up the year after he departed.

His most important transaction in 2003 was the deal for Cadwalader, Wickersham & Taft, in which the venerable law firm took 460,000 square feet of space at One World Financial Center under a 20-year lease. Aside from keeping “a firm synonymous with Lower Manhattan” in the area, Steir said the deal, which closed in March, was also significant for being “the largest new transaction to happen in close proximity” to the World Trade Center since Sept. 11 – other companies like American Express simply returned to their old spaces. Cadwalader took over space from Lehman Brothers (who were represented by CB Richard Ellis), but the deal was eventually completed not as a sublease but as a direct deal from the owner, Brookfield Financial Properties. Since Cadwalader& 39;s former offices at 100 Maiden Lane are being converted to a residential building, the deal resulted in a net positive absorption of 400,000 square feet in the area.

Steir said he enjoys the challenge of commercial leasing because “every day is a new day,” though he admits that some days can be a bit frustrating. “But the upside outweighs the downside.”

Frank Doyle

Managing Director, New York Region, Jones Lang LaSalle

–When Frank Doyle left his investment banking job at Drexel Burnham Lambert, he began a new career at Jones Lang LaSalle, where he remains 17 years later, a managing director of the firm and its top New York broker for 2003.

As a founding member of the New York office of the global firm, he has carved out a niche in representing landlords and tenants in Midtown’s trophy properties.

Last year was a strong year for Doyle despite it being a “tough year” in which the market “stood still” for the first nine months.

His most ingenious deal in 2003 involved filling up 60,000 square feet of space for his client Boston Properties at more than $60 a square foot in a weak market. That deal involved two floors vacated by O’Melveny & Meyers in midtown’s Citigroup Center in April. The deal also saved the incoming tenants, a law firm and an investment bank, $50 per square foot in build-out costs because the space already fit their needs.

Doyle says the most enjoyable part of his job are the people and the culture at his firm, which he has helped shape over the past 17 years, as well as the sheer satisfaction of recalling his best deals as he walks by his trophy buildings.

But he doesn’t enjoy being thrust into situations he can’t control, such as market conditions that clamp his preferred high deal flow rate, much like last year.

“Everyone wants the market and the economy to be robust.”

David Hoffman, Jr.

Executive Managing Director, Colliers ABR

–Since joining the firm in 1988, David Hoffman, Jr., has come a long way up in the ranks of Colliers ABR, where he started out as a junior broker.

Today, he wears the hats of co-owner, board member and co-head of the brokerage division of the independently owned New York office of Boston-based Colliers. Before Colliers, the Manhattan native spent his college summers at Cross & Brown Co., where his father was an executive.

Hoffman mostly represents landlords, and in one of his larger deals in 2003, he represented landlord AEW Capital Management when the Epstein Becker & Green law firm renewed and expanded its lease at 250 Park Avenue from 75,000 square feet to 100,000 square feet for a 15-year term. The deal took place in a soft market when the law firm could have gone elsewhere.

More significantly, Hoffman considers the 234,000 square foot leasing deal he did for landlord TIAA-CREF with tenant Fairchild Publications at 750 Third Avenue as “one of the largest, least contentious deals” he had ever done, marked by the spectacular degree of cooperation by both sides.

He most enjoys the challenge of “breaking down” clients’ initial stereotypical worries about dealing with brokers, and turning them into trusting and satisfied clients. But the hard part is that “as a broker, you rarely exercise a great deal of control over what people ultimately want to do.”

Dirk Hrobsky

Vice President, Trammell Crow

–At 32, the New Jersey native and Texas-based Trammell Crow’s top company-wide broker in 2003 seems poised to spend time in the uppermost reaches of the industry. Since coming over from GVA Williams about two years ago to start New York operations for Trammell, Hrobsky has clearly set the sky as his limit, taking on the firm’s local and international operations.

Hrobsky’s biggest deal in 2003 was the five-year build-to-suit leasing deal for the consolidation of the American operations of South Africa-based South African Paper and Pulp, Inc. (SAPPI) in a 600,000 square foot industrial space in South Brunswick, New Jersey. Hrobsky’s team beat out at least three other strong competitors to snag the logistics-heavy relocation of SAPPI’s operations from three different geographical locations to one, set to be completed this October. Until the project is finally done, the challenge is “so many moving pieces to manage at once and building trust at the same time.”

The SAPPI deal, the largest last year for the firm’s New York office, earned Hrobsky a Deal of the Year nomination by the National Association of Industrial Office Properties (NAIOP) for 2003. Hrobsky attributes his quick rise to his trademark principles of “trust, relationships and leverage,” which results in a lot of repeat business from well-served and appreciative clients. “My customers are my best sales people.” What he enjoys most about his job is access to interesting people and projects, but the human variables that are “absolutely beyond your control” is the real challenge in the job.

Bradley Gerla

Senior Vice President, CB Richard Ellis

–Brad Gerla has spent 24 years in commercial leasing since taking his first job at Jones Lang Wooten, now Jones Lang LaSalle. In 1998, he joined ESG, which became part of CBRE in 2003. Real estate is something of a family business for the Long Island native, since his father and uncle both worked as developers. Gerla says he chose a career in leasing because development work is more one-sided and he likes the interaction with both sides that leasing involves. “I like the deal making process, I’m a people person. It’s a lot more fun that way.”

Gerla’s niche is the downtown area, and his biggest deals in 2003 involved representing the landlord at 55 Water Street. J.P. Morgan Chase departed the 3.6 million square foot building in 2002, leaving behind a vacancy of 1.4 million square feet of space in the country’s second largest office building after Chicago’s Sears Tower. Through “creative packaging” Gerla’s team disposed of 780,000 square feet of space, over half the vacant space, in three separate transactions with insurance company HIP (560,000 square feet), the Teachers Retirement System of New York (160,000 square feet) and Liberty Insurance (60,000 square feet).

Gerla considers it impressive that HIP left the midtown market to relocate to downtown, bringing with it over 1,800 workers. “It’s very rare for tenants to come downtown and take over half a million square feet of space.”

Gerla enjoys the personal interaction involved in leasing, but said the downside is that “you could work years on a deal and it could fall apart for any reason whatsoever.”

Merrill Roth

Executive Managing Director, Grubb & Ellis, New York

–Twenty-five years after arriving in the world of commercial leasing from a sales and management job at Xerox, Merrill Roth has stayed strong in the game, moving from Edward S. Gordon Co. (later Insignia/ESG) to Grubb & Ellis. His long experience and skills have now positioned him as the nationwide top broker at Grubb & Ellis.

Roth recalls 2003 as quite a successful year for the six-person team he heads, though he admits the year was “very difficult” in commercial leasing due to market and pricing instability created both by landlords putting up unleased space and tenants dumping space via subleases. Among his most significant deals were the subleases he handled in New York for Instinet Corporation, a long-term client of his company that was adjusting its space after an acquisition. He also recounts the “tremendous creativity” shown by his team towards the end of 2003 when it was involved in subletting 108,000 square feet of space at The Reuters Building at a time when most competitors were not leasing at all, plus an additional 55,000 square feet in two different subleases in other locations in the city.

Roth’s team also pulled off the largest leasing deal in Connecticut in 2003 in transactions exceeding 200,000 square feet on behalf of Dow Chemical in Danbury, Connecticut.

Roth attributes his team’s performance to its “unique” mix of people with corporate and real estate management backgrounds and to the practice of senior team members in staying hands-on with deals from start to finish.

John Cefaly

Vice Chairman, Cushman & Wakefield

–After 33 long years in the brokerage business, running the New York operations of major global player Cushman & Wakefield, John Cefaly’s A-plus track record shows how experience can translate into strong results and dollar signs. Cefaly was Cushman & Wakefield’s top broker last year, a repeat of the honor he achieved in 2002. The view from the top wasn’t new to him – for the past decade he’d been among the firm’s top five producers.

Among his transactions in 2003, he considers the lease renewal for New York Presbyterian Hospital on 38th Street off First Avenue one of his biggest deals. Navigating the layers of direct leases and subleases involved, Cefaly structured a 20-year deal that secured the hospital 236,000 square feet of space with a consolidated direct lease. He also lists his work on the AON deal, in which he secured an assignment of the insurance broker’s lease on its 200,000-square foot space on Third Avenue to Pfizer, in order to get around the sublease restrictions on AON’s lease and facilitating its move to Park Avenue and 199 Water Street.

What fascinates him about life in commercial leasing? “The personal interaction, the creativity in transactions and all the challenges to overcome.” Cefaly credits his long experience for his success, especially his skill in “being able to work with landlords” in representing his tenants.

Eight leading brokers who overcame to weak market to close big deals [more]

While Midtown and Midtown South continued to steadily turn the corner, Downtown struggled to produce sustained activity in April, according to a new office market report by CB Richard Ellis.

A report by Colliers ABR saw a different situation, finding Midtown somewhat quiet in April and the Downtown market much improved from March.

Overall, the Colliers report found the Manhattan class A vacancy rate holding steady at 10.6 percent in April, compared to the month before.

While leasing was not overly impressive in April, the Colliers report said more tenants in the market wanted to make deals. Financial service firms, which cut back severely as the downturn began in early 2001 and have remained dormant ever since, have finally jumped back into the fray.

Hiring has picked up among the major companies, and appears to be strong across several divisions, from brokerage to trading. The official numbers, though, do not yet reflect the increase in employment reported by the firms themselves, the report said.

Midtown

Midtown started the second quarter on decidedly solid footing, with brisk leasing velocity fueled by mid-size transactions, strong positive net absorption, tighter availability and stable asking rents – all indicators that this market continues to slowly and steadily recover, said the CBRE report.

With 1.28 million square feet of leasing activity, availability continued to tighten in April, dropping 0.1 point to 12.5 percent – the fifth straight monthly decline since its peak of 13.6 percent in November.

With the addition of 230,000 square feet of positive net absorption in April, Midtown’s year-to-date absorption totaled 1.62 million square feet – an auspicious reversal from the negative 2.48 million square feet of absorption registered during the same period last year, CBRE said.

The month’s largest new leases in Midtown included Robeco’s 103,000-square-foot lease at 909 Third Avenue, Google.com’s 57,000-square-foot expansion at 1440 Broadway and New Plan Realty Trust’s 54,000-square-foot lease at 420 Lexington Avenue, the report said.

The Colliers report saw a less rosy picture in Midtown in April, finding that the class A vacancy rate climbed – though only incrementally – to 10.2 percent up from 10.1 percent the month before.

Class A average asking rents continued to climb, however, closing the month at $55.02 per square foot, up 1.8 percent from $54.05 per square foot the month before. The CBRE report also found average asking rents increased, by an additional $0.15 in April, ending the month at $50.68 per square foot.

Midtown South

Although April was a lackluster month in terms of leasing, Midtown South remained on its steady course of recovery, with stable availability and pricing and absorption firmly in positive territory for the year, the CBRE report said.

April was Midtown South’s slowest month of leasing this year, with 264,000 square feet leased, lagging March’s 496,000 square feet by 47 percent. Availability was flat in April at 12.4 percent.

The largest transaction in April was a renewal by Forest Electric for 53,000 square feet at 2 Penn Plaza. The two largest new leases were Phillips Group’s 45,000-square-foot sublease from Reed Elsevier at 360 Park Avenue South and Armani A/X’s 40,000-square-foot lease at 111 Eighth Avenue.

With no major additions of space, Midtown South nearly broke even in terms of net absorption, crossing into negative territory by 11,000 square feet.

For the year to date, absorption remained positive at 92,000 square feet.

Average asking rents increased $0.11 to $32.61 per square foot for direct space, the CBRE report said.

The Colliers report did not include data on Midtown South.

Downtown

Downtown struggled to produce leasing activity in April, the CBRE report said.

For the month, leasing totaled a mere 186,000 square feet, just 37 percent of the five-year monthly average of 504,000 square feet.

Only two transactions exceeded 10,000 square feet in April, both in 1 Battery Park Plaza: Liberty Mutual Insurance’s 51,000-square-foot lease, and Mitchell & Titus’ 26,000-square-foot renewal and expansion.

However, there was positive net absorption of 69,000 square feet for the month, largely due to the absence of major additions to supply and the withdrawal of 111,000 square feet of space from the market, the report said. Availability tightened by 0.1 point to 15.3 percent in April.

Year to date, leasing activity is improved compared to last year, with 1.80 million square feet of leasing activity surpassing the 1.61 million square feet recorded during the same period last year.

The Colliers report found the Downtown market considerably improved in April compared to the month before, with the class A vacancy rate closing at 12.9 percent, down from 13.4 in March.

The highlight of April was the sale of 140 Broadway to German group DIFA for $380 per square foot, the report said, adding that it was one of the highest prices paid for a Downtown building “in quite some time,” even surpassing the $372 per square foot figure paid by Deutsche Bank for 60 Wall Street prior to Sept. 11.

Rents headed in the wrong direction in April, however, ending the month down slightly at $33.70 per square foot from $33.89 per square foot the month before, the Colliers report said.

The CBRE report also found that average asking rents Downtown continued their slide, decreasing by $0.20 in April to $31.15 per square foot.

Jobs and Construction

Jobs and new office construction will certainly affect the vacancy rate in Manhattan going forward, and there may be good news on both fronts.

Through April 2004, U.S. job growth has been strong across most sectors, the Colliers report said. For New York City, for the first three months of 2004 (the latest data available), there were 23,800 private sector jobs created.

While in financial services there was a job loss of 1,200 positions thus far this year, professional and business services (legal, advertising, management consulting, temporary help and the like) gained 8,300 jobs while information services (telecommunications and periodical publishers) added 7,300 jobs in the first quarter of 2004.

Between residential conversions in Lower Manhattan and few spec office building projects, office supply doesn’t look likely to increase quickly. A New York Building Congress Construction Outlook for 2003 to 2006 forecasts that construction spending for the upcoming years will experience a 10 percent drop before rebounding.

Richard T. Anderson, president of the New York Building Congress, said that non-residential construction is the big question mark going forward, and is expected to experience the steepest drop. Infrastructure will be the greatest source of spending, fueled by federal funds for Lower Manhattan, he said.

New project increases Class A space by 500,000 sf; other buildings see big demand [more]

Like the flying Disney elephant, Dumbo office space is taking off with creative tenants and white collar types.

The Brooklyn neighborhood – an acronym for Down Under the Manhattan Bridge Overpass – has followed its namesake s tradition to emerge as an up-and-coming neighborhood, drawing not just middle-class residents and retail establishments, but a wide variety of professional and creative office tenants.

In March, Goodtree Media, the brainchild of hip-hop singer and actor Mos Def, leased 1,800 square feet of space, joining several of the music and film industry businesses in the neighborhood.

But the hip hood s charm isn t restricted to creative types. In May, KMPS Mortgage Warehouse leased 3,300 square feet in the same building, at 55 Washington Street. That came on the heels of an announcement that the non-profit organization, The International Center for Tolerance Education, leased 11,000 square feet in 25 Washington Street, right down the street.

These recent announcements are part of a larger change. The neighborhood used to attract mostly manufacturers and artists, but is seeing an influx of white collar tenants, says Chris Havens, director of leasing at Two Trees Management. The company owns much of the office space in the neighborhood, including both 25 and 55 Washington Street.

“We got our first lawyer in 1999 – now we have six of them,” Havens says. “We got our first accounting firm last year.”

Havens attributes the shift both to zoning changes that went into effect in 1997 and allowed old factories to be converted to alternate uses – and intangible attitude factors.

“Brooklyn has become groovy,” Havens says.

It s also a good deal compared to space across the river.

“The price is right for very high end, Class A office space,” says Michael Forrest, executive managing director of CH Commercial, which represented Mos Def.

Rents in the neighborhood peaked in 2000 at about $20 to $25 per square foot, Havens says. They fell about 25 percent once the recession hit, and have now come back almost to peak levels, he said. That s still a good deal compared to Manhattan prices.

CH Commercial s Forrest says that tenants like Mos Def may not have come to the neighborhood if Two Trees hadn t invested in creating high quality space where there once was none.

Law firms are continuing their reign as the kings of the leasing market, according to a new report by Jones Lang LaSalle.

Law firms led all other New York businesses in leasing activity in the first quarter of 2004, taking 1.55 million square feet of space throughout the city, according to the report.

The banking sector came in second, signing for 1.2 million square feet of space in the first quarter. Accounting firms took the third spot with 836,400 square feet of space leased, and the financial services sector posted 516,300 square feet of leasing activity, the report said.

“The growth of the legal sector is consistent with several years of heavy leasing and expansion activity on the part of law firms in New York,” said Barbara Byrne Denham, research manager with Jones Lang LaSalle and co-author of the report. “Not coincidentally, law firms added 600 jobs in the first quarter of 2004, according to data from the New York State Department of Labor.”

Law firms were also the most active businesses in Manhattan commercial real estate last year, leasing more office space than the financial industry for the first time in the five years tracked by the report.

Office leasing data released by Cushman & Wakefield earlier this year showed similar findings last year for Manhattan, with law firms placing first in leasing, followed by financial services companies, and insurance firms finishing a close third.

“Law firms have ramped up their gross leasing activity for a number of reasons,” said Lisa Kiell, executive vice president with Jones Lang LaSalle and the other author of the report. “Some large law firms headquartered outside Manhattan are acquiring local boutique firms to augment their operations in New York. Mergers, acquisitions and consolidation among smaller regional players have also fueled a spate of transactions.”

Gross leasing activity through December 2003 showed that law firms leased 3.9 million square feet of space in New York City, a 426 percent increase from the previous year, when the legal industry signed for just 752,348 square feet of space.

In previous years, finance firms – including investment banks, brokerage firms, venture capital firms, and mutual and hedge funds – reigned supreme, particularly in late 2001 when many were displaced after Sept. 11. This past year, the finance industry placed second to law firms, recording 2.9 million square feet in gross leasing activity, representing a 140 percent increase compared to the 1.24 million square feet leased in 2002.

Some local Manhattan law firms have taken expansion space and others have relocated from Downtown to Midtown in an effort to upgrade their space. A number of law firms have moved from Midtown to Downtown to capture lower rents and take advantage of the incentives available in Lower Manhattan.

The pickup in gross leasing activity has also been driven by the rollover or expiration of existing leases, displaced Sept. 11 tenants finding permanent space and firms renewing early to take advantage of the weaker market conditions, the report said.

More inventory available; price gains expected to slow Comments

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Significant Gains, Despite Risks, in Purchasing New [more]

Timing One of Biggest Risks in Buying New [more]

Manhattan residences are full of incredible architectural details, with some buildings boasting flourishes that date as far back as the 1700s.

Brokers who know what to look for have an advantage in the culturally rich market of New York, where discerning buyers and sellers are willing to embrace aesthetics. A broker who knows architecture and interior design, either through a formal degree or a passion for the subject can get better deals for clients – and larger commissions for his or her firm.

Architecturally conversant brokers can detect structural elements in properties, develop alternate floor plans or tell a prospective buyer the kind of care and attention that has gone into a renovation. This kind of expertise can be very helpful to buyers, whether they are looking at townhouses in the Village, a reinvented office building or a new high-rise development.

Tatiana Cames, a Corcoran vice president based in Soho, began her real estate career with the purchase and renovation of her own Italianate townhouse in the West Village in the early 1990s, expanding her experiences and writing about New York townhouses in general. Since renovations are common when a new owner moves into a single-family Manhattan townhouse, Cames can bring her expertise to bear during the buying process.

“You need to know the period and the details, especially in the Village, from Transitional Federal to Greek Revival, early Greek Revival to Italianate and so on,” she said. “There are a lot of transitional periods and if things are missing in the home the owner needs to know how they should restore it.”

“You have to help them understand which area is sagging, what details are in better shape and what will survive a gut renovation,” she added.

Nancy Herzfeld of Brown Harris Stevens, who previously worked for Skidmore Owings and Merrill Architects and I. M. Pei & Partners in New York, said clients need “someone with a sharp eye, who knows how renovation can still keep intact the charm of the original.”

“This is especially true of older estate sales where people haven t upgraded the electric and plumbing for years, and keeping in mind city codes and maintaining the integrity of the original space,” she said.

Of course, there will always be an engineer to report on things like the foundation, the structure and the termites before the buyer ever signs a contract, she said.

Herzfeld, who also had her own interior design and architectural firm, draws from that background to recommend contractors or architects her clients can choose from.

“I have lots of resources that are very hard to find now, such as skim coating, recreating molding and even good carpenters that can repair stairways and banisters without having to replace the whole thing,” she said.

Craftsmen like these are hard to find in an age of mass manufacturing and few are capable of doing that sort of work by hand, she added.

“Back then it was labor intensive, it was an art,” Herzfeld said. “Now it s just part of the construction process. I know of a few cases where people have brought over old carpenters from Italy because there are so few that can work with wood in that fashion even in Europe.”

In addition to advising on restoration, a background in architecture comes in handy when dealing with new, unfinished developments.

Wayne Burkey of Sotheby s has an architectural background that includes working for Giuseppe Zambonini in the Open Atelier of Design. He said “often times it s the architecture of the building, not the details as much, that buyers are looking at.”

He points to the example of the towers at 173-176 Perry Street and another planned tower on Charles Street designed by architect Richard Meier.

“When you can t see these things physically it helps to have someone explain the ceiling heights, window sizes, building systems, the location of the elevator and length of corridors,” Burkey said. “It s a big leap from two to three dimensions.”

Overall, Burkey said he does not tailor his marketing to center on the architectural offerings of a listing. “But I m so keenly aware of it when I m working with people that I sort of bring that out,” he said.

Herzfeld said her background inspires confidence, always an important aspect of the broker-client relationship “I think it inspires the customer to appreciate my judgment,” she said.

73% decline in available units since last March, report says Comments

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With mortgage rates heading up, apartment buyers in Manhattan are changing the way they are borrowing to keep costs down.

Rising rates have changed the mix of loans now being made, say local lenders, who are seeing a migration from fixed-rate to adjustable-rate mortgages, or ARMs, and a drop-off in refinancings.

The mortgage industry also has its eye on what sort of dramatic rise in rates would cool the residential real estate market, or cause lenders to pull back on programs providing high loan-to-value amounts. Some say rates of 8 percent would spell trouble for the market.

Local rates climbed a full percentage point between late March and late May, with the 30-year fixed at 6.4 percent at the end of last month.

Jeffrey Appel, managing director of mortgage broker Manhattan Mortgage Company, said the rise in rates in the past two months has wiped out about 18 months’ worth of accumulated rate reductions in the recent past.

“It has put us back about 18 months,” he said.

Unlike fixed-rate mortgages, ARMs typically allow borrowers to pay a lower interest in the period before the “adjustment” occurs, and buyers have started to clamor for this type of financing, said Steve Schnall, president and CEO of New York Mortgage Company. The Mortgage Bankers Association, an industry trade group, said 35 percent of all mortgage applications nationwide were for ARMs in the last week of May.

In particular, Schnall notes a growing drift toward “interest only ARMs,” especially at the high-end super jumbo market, where owners are able to pay just the interest on very expensive properties in the period before the adjustment occurs.

Higher rates also slowed the refinancing binge of the past year.

Refinancings as a percentage of total mortgage transactions shrank over the past few months on a nationwide basis, and were down 6.7 percent during the last week of May compared to the week before.

Mortgage originations overall should total about $2.4 trillion in 2004, about 46 percent below 2003′s record volume and 13 percent below 2002, according to a recent report by Freddie Mac.

The share of refis is expected to come in at about 40 percent of all mortgage originations in 2004, compared with shares well above 50 percent the last three years, the report said.

Robert Hochberg, president of mortgage broker Hochberg & Holland, said higher rates have shifted the motivation for refinancing toward merely cashing out money on equity and away from the desire to secure lower rates.

Appell also noted that more homeowners would probably be opting for home equity lines of credit (HELOCs) as opposed to refinancing. This way, they would save more money using a variable rate on the smaller HELOC loan than the higher rate on a refinanced fixed-rate loan.

Most observers believe further interest rate appreciation is likely. With the economy growing at more than 4 percent and inflation rising, Greg McBride, senior financial analyst for Bankrate.com, said the economic environment dictates higher short-term rates and also long-term rates.

But Hochberg said he was waiting to see if recent employment numbers were backed up by further growth, signifying a trend, rather than a statistical anomaly. He said a reading of the next employment numbers to be released June 4 would give a clearer answer to whether job growth has really picked up, as many believe. Hochberg noted the situation in early March, when disappointing employment numbers sharply knocked mortgage rates off their upward trend. Plus, he said he worries about the current rise in gas and food prices, which might affect consumer confidence and impact retail sales, causing rising payrolls to level off. Overall, he wouldn’t bet on rising mortgage rates.

To cool down the real estate market in New York, characterized by low inventory, Appel said mortgage rates would have to rise as high as 8 percent. He added that to correct the market from the current 6:1 buyer-seller ratio to a 1:1 situation, many of the large number of marginally qualified buyers would have to be forced off the market by rates as high as that 8 percent, a situation he does not foresee before the middle of next year.

But while the real estate market may be resilient to rising rates, mortgage financing might not remain as available as it has been. Schnall predicts that if higher interest rates cause more defaults on loans, lenders might pull back on programs providing 100-percent financing on loans, or high loan-to-value amounts. “I suppose there’s a correlation between higher interest rates after a period of rising rates and defaults and of course a tightening of credit after that,” he said.

Finding a 4,000-square foot apartment in a well-established neighborhood like Carnegie Hill is about as tough as being good enough to play the violin onstage at Carnegie Hall.

With large spaces at a premium, and new construction a particularly difficult proposition, the labors of developer Cary Tamarkin look especially taxing.

Tamarkin, the force behind the new condo building at 47 East 91st Street, saw construction delayed for years in the face of opposition from prominent residents, such as filmmaker Woody Allen, who went so far as to make a film objecting to the high-rise project.

But after plans for a 17-story building were scaled back to a 10-story project, the building was finally completed this year.

That put eight unusually large apartments on the market in a highly sought-after neighborhood.

Each of the condos at 47 East 91st Street, which sits on the corner of 91st Street and Madison Avenue, takes up an entire floor – except for the penthouse, a duplex encompassing the entire 9th and 10th stories of the building.

“This doesn t exist anywhere else,” says Cathy Taub, a vice president at Stribling Marketing Associates, which has the exclusive on the building.

Of course, it doesn t come cheaply, either.

The condos start at $5.3 million, and prices rise with every floor. The asking price for the unit on the eighth floor is $10.3 million; for the penthouse, which is delivered raw, it is $14.5 million.

Three of eight are under contract, Taub says.

Each of the seven non-penthouse apartments offer five bedrooms and five-and-a-half baths, attractive for young families and empty-nesters who want space enough for children and grandchildren to visit, she says.

Aside from space, views and location, the building is a blend of prewar charm with contemporary amenities, Taub says.

The apartments themselves are modeled on prewar floor plans, in which sleeping quarters are very distinct and set apart from public entertainment areas. Other features reminiscent of pre-war buildings include plaster moldings, hand-laid wood floors and wood-burning fireplaces.

But the apartments also include contemporary elements, such as large open kitchens that reflect the way people live today.

“We have found that most people spend a significant amount of time in the kitchen,” Taub says. The kitchens offer full southern exposures with window seats. The developer did not shirk on culinary amenities, either: kitchens feature standalone, Sub-zero refrigerators and freezers, as well as 148-bottle wine refrigerators.

The building itself offers 24-hour doorman service and a live-in superintendent, unusual for a building with only eight apartments. And residents who need more room for staff quarters or guest areas can also purchase additional space in an adjacent townhouse, which is reserved for residents, Taub says.

Taub even says the controversy that shrouded the building s construction is not all negative. For one, a compromise was reached that she says preserves the character of the neighborhood. “And it shows you have people in the neighborhood who really care about their neighborhood.”

Dumbo
70 Washington St. and 35 York St.
Two conjoined buildings topped by a clock that occupy an entire block in Dumbo will begin to be converted into luxury apartments in July by Two Trees Management. The building currently houses a mix of industrial tenants, whose leases all expire this year.

Dumbo
38 Water Street
Two Trees Management plans to build a 16-story apartment building on the site of the St. Ann’s Warehouse, a performing arts center near the foot of the Brooklyn Bridge. No timetable for construction has been released.

Harlem
65-71 East 130th Street
Seven-story, 25-unit market rate apartment building planned between Madison and Park Avenues. The project is being built on four contiguous vacant lots by East Harlem Development Corp. Construction will begin this spring.

Harlem
2000 Fifth Avenue
Nine-story co-op with 23 units planned for the corner of Fifth Avenue and 124th Street, across from Marcus Garvey Park. The building will also include a retail component, sublevel parking for 32 cars and a community facility. Upside Ventures represented both the owners and developers of the site. Construction will begin this spring.

Harlem
The Clayton
257 West 117th Street
Seven-story townhouse built in 1890s being converted to 16 apartments. Units will be two-bedroom, two-bathroom and range from 2,200 to 2,800 square feet. Prices start at $1.1 million. Bridge Capital Corporation is the building owner. Project to be completed by late August. Contact: Lawrence Comroe and Tony Oakley, Corcoran, 212-875-2942.

Long Island City
Two condominium towers slated for the site of the East River Tennis Club just south of the Queensboro Bridge. The waterfront towers will each be 28 stories, and will have a total of 540 one- to three-bedroom apartments. Prices have not been set. The buildings are part of a larger plan by Vernon Realty of New Jersey to build 910 residences, which will also include townhouses, lofts and rentals, in six buildings on six acres. There also will be a park, a riverfront promenade and gardens as well as 20,000 square feet of retail space. Construction on the two towers is set to begin in August. Contact: Andrew Gerringer, Douglas Elliman Development Marketing Group, 212-702-4060.

Midtown
112 Central Park South
208-room, 27-floor former InterContinental hotel to be converted to 65 co-op units, each with one to three bedrooms and 1,000 to 2,365 square feet of space. Prices haven’t been set, but are expected to range from $1 million to $5 million. Though a co-op (because the developer rents the land under the building), owners will not need board approval to sell or sublet their units. Anbau Enterprises is the developer; Costas Kondylis & Partners is the renovation architect. Sales are expected to start by the end of the year and the project is expected to be finished in 15 months. Contact: Anbau Enterprises, 212-938-0090.

Midtown East
Park Avenue Place
60 East 55th Street
New 45-story condo development rising between Park and Madison Avenues that will offer 76 units featuring a variety of studio, one-, two- and three-bedroom layouts. Apartments will range from 446 to 2,950 square feet. The building will also include the 23,000-square-foot “Core Club” in its first five floors, a private club open to building residents. It will include a new restaurant and bar by chef Tom Colicchio of Craft, as well as a library, lounge, screening room and meeting rooms. There will also be a spa and fitness studio, and changing facilities with butler service. The project is being developed by Davis/RFR. Architects Kohn Pedersen Fox Associates designed the tower, which features a glass exterior, and Skidmore, Owings & Merrill LLP served as interior architects for the project. The Marketing Directors are the property’s sales and marketing agent. Sales are already underway and the project is slated for occupancy in December. Contact: Park Avenue Place sales center, 212-813-9055.

South Street Seaport
233 Front Street
11-story, 96-unit rental building, primarily one- and two- bedrooms, with a few studios and three-bedrooms. Rents are expected to range from $2,100 to $3,000 for a one bedroom. In addition to top amenities, some apartments have views of the Brooklyn Bridge and access to backyard gardens. Sciame Development and Construction Co. is the general contractor. Apartments will go on the market this fall.

Wall Street
The Crest
63 Wall Street
A 37-story, 476-unit rental building converted from the former home of Brown Brothers Harriman. Studios will rent for $1,770. Apartments range from 425 to 2,000 square feet. The 1929 neoclassical-style building will also feature a “Great Room” with billiards area, baby grand piano, library, screening room, common sundeck, and ATM and DVD rental services. Developed by Metro Loft Management. Set to open in June. Contact: crestnyc.com

Sales Update

Greenwich Village
One Morton Square
All six of the townhouse residences at Morton Square, a development by JD Carlisle Development Corp. were sold as of last month. The last townhouse achieved a price of $4.25 million. The townhouses are three stories, with three to four bedrooms, and four-and-a-half-baths. The 147 lofts, townhouses and family size classic residences in Morton Square will be completed and available for occupancy this summer. Contact: mortonsquare.com.

Upper East Side
The Metropolitan
181 East 90th Street
More than 70 percent of the condos have been sold in the first 25 weeks since the sales office opened its doors, according to developer Sherwood Properties. Buyers had signed over $100 million in sales contracts since sales commenced on Sept. 15. The Philip Johnson-designed building features 94 famliy- sized homes. Prices range from $850,000 to $7.95 million for the 3,550-square-foot terraced penthouse. Contact: Michelle Conte, Brown Harris Stevens, 212-906-9393.

Greenwich Village
505 Greenwich Street
More than 80 percent of the units have been sold at the 14-story condo building with 104 units following the beginning of sales in January. The building, which is to be completed this fall, has 25 three-bedroom apartments, 42 two-bedroom units and 37 one-bedroom apartments, with sizes ranging from 722 to 2,400 square feet. Contact: 505 Greenwich Street Presentation Center, 212-505-9600, or visit 505greenwich.com.

Upper East Side
The Seville
300 East 77th Street
Nearly 85 percent of the residences have been sold at the 32-story tower designed by architect Robert A.M. Stern. The majority of the 84 residences are two-bedroom apartments, with the remaining mix comprised of one- and three-bedrooms, and two full-floor penthouses. Prices of the available homes start at $2.1 million for two-bedrooms and $2.975 million for three-bedroom residences. The penthouses are priced at $8.2 and $9 million. The building is already completed, but several homes were recently released for purchase. Contact: The Marketing Directors, 212-826-8822.

FROM MAY 2004 ISSUE:

Harlem
Strivers Gardens
300 West 135th Street
Two towers, one 12-stories tall and one seven stories, with 170 condominium apartments. Apartments are for sale by lottery, with the minimum household income required at $48,000, and the maximum at $157,000. Preference for half the apartments is to be given to applicants living within Community Board 10. Apartments range from a 673 square foot one-bedroom for $143,000 to a 1,182 square foot three-bedroom penthouse with rooftop terrace for $529,000. Applications can only be mailed and must be postmarked from April 21 to June 21. The project is expected to be completed by January. Contact: striversgardens.com.
 
Gramercy Hill
120 East 29th Street
Restoration of five 1880 s era contiguous brownstones. Project includes adding two and a half stories to the five-story buildings, which will have a total of 25 one-to-four bedroom condominiums, priced from $675,000 to $2.4 million and ranging in size from 1,000 square feet to 2,659 square feet. Features will include oversized windows, high ceilings, and new oak floors with walnut inlay trim. The six ground-floor duplexes will have private gardens while 11 of the residences will offer either a private terrace or balcony. The developer is Alchemy Properties and Hustvedt Cutler Architects was retained for the project, which is expected to be completed by December.

Madison Square Park
50 Madison Avenue
Combines a restored 1898 five-story mansion with a new eight-story tower on top, overlooking Madison Square Park. Contains eight 3-bedroom, 3.5 bath residences priced from $2.65 million and a duplex penthouse priced at $5 million. The penthouse has 3,500 square feet of space and two terraces that together comprise 1,000 square feet. Kitchens will offer cherry cabinets, granite countertops, Sub-Zero refrigerators and freezers, Viking and Bosch appliances and kitchen islands with wine coolers. Samson Management LLC is the developer. Sales began last month, and occupancy is slated for spring 2005. Contact: Halstead Property and senior vice president, Louise Phillips Forbes, 212-381-3329.

Upper East Side
205 East 59th Street
27-floor condo building across the street from Bloomingdale s. There will be 62 one-, two-, and three-bedroom apartments varying from 1,113 to 1,552 square feet, ranging in price from $1.47 million to $3 million. There will also be a 2,702 square foot penthouse, not yet for sale. Each apartment is to have a gas-burning fireplace and at least one balcony, and two apartments on each floor are to have solariums. Some apartment will have living rooms with 20-foot ceilings. The building also features a park for dogs as part of an outdoor area on the fifth floor. Construction began last March and is expected to be completed early next year. Contact: The Sunshine Group, 212-750-0500.

Upper West Side
The Hopkins
172 West 79th Street
Pre-war apartment building being converted from rental to condominium ownership. The 20-story building, which was constructed in 1929 and has been under the same family ownership for over 60 years, will be bringing a total of 99 apartments to market. Apartments will include 17 three-room and 37 four-room apartments, all potentially convertible to two-bedroom residences. There will also be 35 two-bedroom/two bath units as well as 10 large “irregular” apartments containing six or more rooms. Apartments range in size from 800 square feet to over 2,000 square feet. Opening prices are expected to range from $550,000 to more than $2.5 million. As part of a year-long, $3 million renovation and capital improvement program, the building will soon feature two new elevators, new windows, a new boiler, a newly furnished and decorated lobby, new corridors and a new security system. Apartments will feature new kitchens, bathrooms and washer/dryers in every unit. Sales are expected to begin later this spring. Contact: Jud Ebersman, Walter & Samuels Inc., (212) 696-7128.

Upper West Side
West 58
426 West 58th Street
A century-old mid-rise building on top of which six modern penthouse floors are being built. The condominium features 16 two and three bedroom units. Nine of the units are already in contract for prices ranging from $1.4 million to $3.3 million. The remaining units are currently priced from $1.4 million for two-bedroom residences to $5 million for the penthouses. Prices on the units have been raised four separate times since going on sale. The developer is Elad Properties. Occupancy is scheduled for early next year. Contact: Iva Spitzer, Douglas Elliman, 212-247-5858.

 
FROM APRIL 2004 ISSUE:
 
Greenwich Village
505 Greenwich Street
A 14-story condo building with 104 units. Building will contain 25 three-bedroom, 42 two-bedroom, and 37 one-bedroom apartments. Prices range from $825,000 to $3.5 million. Individual units have large living rooms with mahogany flooring, and kitchens feature top appliances including wine refrigerators. The building includes a 24/7 concierge, resident manager, private courtyard, fitness center and pet spa. The project is being developed by Metropolitan Housing Partners and Apollo Real Estate. Occupancy is scheduled to begin this autumn. Contact: 505 Greenwich Street Presentation Center, 212-505-9600, or visit 505greenwich.com.

Harlem
Rosa Parks Condominiums
163 St. Nicholas Avenue (at 118th Street)
A six-story, 64-unit condo building with one, two and three-bedroom units.
Prices range from $195,000 to $260,000 for a one bedroom, $500,000 to $640,000 for a two bedroom, and $600,000 to $825,000 for three-bedroom penthouses. Building features 24-hour concierge, video security, gym, rooftop garden, and wiring for high-speed Internet. Taxes are $7 to $25 annually, and building features low common charges, including $166 to $200 for a one-bedroom apartment. Developed by Artimus Construction. Set to open in April. Contact: Douglas Elliman Development Marketing Group, 212-702-4060, or visit rosaparkscondos.com.

Lower Manhattan
15 Broad Street
Conversion of former J.P. Morgan building to 250 condos. Project is being developed by LB Lev Leviev/Boymelgreen. Philippe Starke is also working on the project, his first residential building in New York. The building will include basketball courts, bowling alley and a pool. Scheduled to open in May. Contact: The Sunshine Group, 212-750-0500.

Lower Manhattan
63 Wall Street
Conversion of former Brown Brothers Harriman headquarters to 476 rentals, with leasing to begin this month. Monthly rents for studio to two-bedroom apartments will be $1,700 to $3,600. The project is being developed by Nathan Berman and Ronny Bruckner.

Midtown
425 Fifth Avenue (at 38th Street)
A 67-floor building by architect Michael Graves with 176 condos. Includes a 24-hour doorman. Gym (with sauna, steam room and lap pool) available. Office space on the first six floors of the building. Studios are priced from $420,000 to $730,000, one bedrooms from $525,000 to $1.4 million, two bedrooms from $750,000 to $2.5 million, and three bedrooms start at $2.9 million. A 3,706 square foot duplex penthouse is on the market for $10.5 million. About 80 percent of the building was already sold as of last month. The building will officially open in June. Contact: The Marketing Directors, 212-683-3331.

Tribeca
The Grabler
44 Laight Street
Conversion of former warehouse to 18 units ranging in size from 1,580 to more than 4,500 square feet. Apartments in the lower floors are unfinished; eight apartments on the top three floors are fully finished, most also have 1,500 square foot terraces. Prices range from $1.295 million to $2.95 million. 14 parking spaces are also for sale for $169,000 apiece. The building is already 50 percent sold and will open this summer. Contact: Corcoran Group Marketing, 212-343-5400.
 
Upper East Side
47 East 91st Street
Eight-story condominium building. Seven apartments, each full-floor, will be 4,100 square feet, while the other, a duplex penthouse, will be 5,800 square feet plus a wrap-around garden. Prices to range from $5 to $15 million. Occupancy expected around May. Stribling Marketing Associates is marketing the building. Contact: Sales office at 212-828-7033, or visit 47east91.com.
 
Williamsburg
170 Broadway
Newly built seven-story condominium with a total of 12 two-bedroom apartments. Prices range from $400,000 to $525,000. All residences have a balcony or terrace. Units feature solid oak strip flooring, recessed lighting, central heat and air conditioning, a stacked washer/dryer, fully equipped kitchen with solid birch wood cabinets, and bathrooms with marble floors and walls. Sales are underway, and occupancy is expected in the late spring. Contact: Helene Luchnick, Douglas Elliman, 212-965-6008.
 
 
FROM MARCH 2004 ISSUE:
 
Downtown Brooklyn
Smith, Schermerhorn, State and Hoyt Streets
A 500,000 square foot mixed-use project will begin on a block currently vacant except for five National Register brownstones. The project, a joint venture of Time Equities Inc. and Hamlin Ventures, will include single-family townhouses on State Street, condominium lofts and mews on Hoyt Street, and rental apartments on Smith Street. Schermerhorn Street will be the focus for the project s retail space. Construction will begin on the townhouses in late spring. Contact: Time Equities, 212-206-6000.

Greenpoint
82-88 Green Street
New 16-unit condo building with two bedrooms ranging from 900 square feet to 1,600 square feet. Prices range from $425,000 to $550,000. The building, a project by developer Josh Guberman, is nearly 50 percent sold out. Another project, the Russell Court Condominiums at 190 Green Street, includes 26 units in a cluster of five buildings, with sales beginning a month ago. Contact: N/A

Harlem
400 Lenox Avenue (at 129th Street)
The first luxury, doorman, non-subsidized housing in the immediate area in the past 75 years was given the green light by the city last month to begin construction. The 12-story building will include 92 units covering 130,000 square feet. There will also be 11,000 square feet of commercial space. Contact: N/A
 
Soho
73 Wooster Street
A four-story building that previously housed a cardboard box manufacturer is being converted into a condominium with six lofts. Units are selling for $4.25 million to $6.75 million, and include four 4,300 square foot apartments and two 5,000 square foot penthouses. Sales began early last month. Contact: Douglas Elliman Development Marketing Group, 212-702-4060.

Soho
60 Spring Street
39 apartments in the 1923 Cass Gilbert building range from one to three bedrooms, from 1,100 square feet to 2,200 square feet. A penthouse apartment features a large terrace and a fireplace and measures 2,750 square feet. Prices range from $1.48 million to more than $7 million. The building, which is being developed by Boymelgreen Developers, was 75 percent sold as of January. Occupancy is scheduled for March. Contact: The Sunshine Group, 212-750-0500.

Tribeca
114 and 116 Hudson Street
$14 million residential project being developed by actor Robert DeNiro in conjunction with with AFC Realty Capital. The project will join an existing five-story brick building at 116 Hudson Street with a new seven-story glass structure that will be built on a lot at 114 Hudson Street. The project will include five loft condominiums, including a duplex penthouse. Four apartments will be 2,000 square feet and cost $2 million, and the penthouse will be 3,000 feet at cost $3.5 million. Sales are set to begin in March. Contact: Stribling Marketing Associates, 212-941-8420.

Tribeca
The River Lofts
92 Laight and 424 Washington Streets
The project consists of two buildings, one new and one old. 92 Laight is a new brick tower with 38 units and 424 Washington is a converted industrial building with 30 lofts. Units range from one to four bedroom apartments (1,100 to 3,900 square feet), priced from $1.125 million to $8.55 million. The project, by Boymelgreen Developers, will be ready for occupancy in 2005. Contact: The Sunshine Group, 212-750-0500.

Upper West Side
43 West 64 Street
Features 32 open, loft-style residences ranging from 1,600 to 6,151 square feet, listed from $1.5 to $10.2 million. Over ninety percent of the residences have been sold, including three of the four penthouses. There have been 20 units totaling approximately $70 million sold within the last four months, including the three most expensive properties in the building, according to the Athena Group. O Neal s Restaurant, by restaurateur Michael O Neal, opened on the ground floor of the building at the end of the year. Contact: The Athena Group, 212-459-0200, or visit 43west64.com.

Upper West Side
44 West 63rd Street (Empire Hotel)
Financing was recently arranged for a project to convert the 373-key Empire Hotel to 125 luxury condominium units. The 14-story, W-shaped building on Broadway will include more than 200,000 square feet of apartments and 25,000 square feet of retail space. Contact: N/A

Upper West Side
The Opus
2770 Broadway (at 107th Street)
Plans were unveiled last month for a 64-unit condominium building to be developed by The Clarett Group at the site of the former Olympia Theatre previously owned by Cablevision Systems. The homes at the $75 million project will take their inspiration from the “Classic 6″ and “Classic 7″ apartments constructed in the area at the turn-of-the-century, the developers said, and the building will also feature 7,500 square feet of retail space on the ground floor. Apartments range from 1,200 to 2,200 square feet, with two to five bedrooms. Prices range from $900,000 to $3 million and opening is set for January 2005. A sales office has already opened a block north of the building, and nine contracts were out on the condos as of early last month. Contact: The Clarett Group, 212-399-2400 or visit clarett.com.
 
 
FROM FEBRUARY 2004 ISSUE:
 
Cobble Hill
The Arches at Cobble Hill.
57 units in new development. Units range from one to four bedrooms (875 to 3,000 square feet). Prices range from $535,000 to $1.8 million. Set to open around this fall. Contact: www.thearchesatcobblehill.com.

Greenwich Village
The Greenwich Street Project
497 Greenwich Street
Six-story condominium with 22 units in former warehouse building. Prices range from $1.2 to $7 million. Units range from two to four bedrooms (1,600 to 3,500 square feet). Approximately 65 percent of the units are still for sale, mostly between $2 and $3 million. Set to open in late February or early March. Contact: Cantor-Pecorella, 212-925-3333

Greenwich Village
One Morton Square
Town houses, lofts, rental apartments and 147 condominium units. Two-bedroom, 2.5-bath condo units are priced at $1.3 million. Three-bedroom, four-and-a-half-bath town houses with home offices, private elevators and back gardens start at $3.75 million. Scheduled to be ready for occupancy this spring. Contact: 212-366-1515 or visit www.mortonsquare.com.

Lower East Side
7 Essex Street
11-story condominium with 16 units. Units range from 1,584 to 3,690 square feet. Prices range from $825,000 to $2.275 million. Four units were still available as of last month, ranging in price from $1.9 to $2.6 million. Contact: 7 Essex Street, LLC, 212-925-9991.

Soho
Soho 25
25 West Houston Street
Nine-story condominium with 32 one and two-bedroom lofts. Prices start at $600,000 and go up to $4.5 million. The building, unusual for SoHo, is being sold to non-artists. All but one of the residences had been sold as of December. Set to open this spring. Contact: The Marketing Directors, 212-368-2500, or visit www.soho25lofts.com.

Williamsburg
The Gretsch Building
60 Broadway
10 story condominium with 130 apartments. Units range from studio to three bedrooms (620 to 2,500 square feet). Prices range from $309,000 to $1.27 million (and higher for two and three bedroom penthouses). Approximately 34 units in the building remain unsold. Set to open this fall. Contact: 1-888-GRETSCH.

 
FROM JANUARY 2004 ISSUE:
 
Chelsea
The Aston
The 38-floor rental tower on the Avenue of the Americas between 27th and 28th Streets was scheduled for completion by the end of 2003. The building includes 269 units is being developed by the Manhattan-based Adell Corporation.

Gramercy Park Area
49 East 21st Street
Former United Federation of Teachers office building converted to a condo with 43 units by developer Elad Properties of Fort Lee, NJ. The 12-story building features “loftlike” apartments, which range from $910,000 to $2.6 million. The sales office opened on the ground floor of the building in November.

Hell’s Kitchen
Loft 55
419 West 55th Street
A new residential sales building that was scheduled to open in mid-November. All lofts in this 24-unit, seven-story co-op building have 10- to 12-foot ceilings. Studios start at $395,000, one-bedrooms at $425,000, and two-bedrooms at $475,000. The penthouse, a two-bedroom, two-bath apartment with a separate studio, gas fireplace, and skylight, and 1,000 square feet of outside private terrace will sell for $1,395,000. Contact: Developer Anbau Enterprises Inc., 212-741-1325.
 
Tribeca
48 Laight Street
Six-story condo building with nine apartments. The units range from 1,400 to 1,900 square feet and from one to three bedrooms.. There will also be a 2,300-square-foot penthouse. Preconstruction prices are to be $975,000 to $1.6 million for the apartments and $3 million for the penthouse. Sales begin Jan. 5. Contact. Citi Habitats, 212-685-7777.

Upper West Side
455 Central Park West
The 26-story condo tower between 105th and 106th Streets includes 53 apartments, 44 of which went on the market in December at prices of $1.35 million to $4.5 million. Units feature large rooms, eat-in kitchens, formal dining rooms, high ceilings, granite countertops, marble bathrooms with showers and tubs, and a lap pool in the building and concierge services. In addition, a French Renaissance chateau at the front of the property, which has sat vacant for decades, is also being renovated, and will be finished at a later date. Each of the 17 units in the chateau are expected to sell for between $3.5 and $7.5 million. Contact: The Marketing Directors, 212-665-5100, or visit www.455cpw.com.

 
FROM NOVEMBER 2003 ISSUE:
 
Chelsea
The Paradigm
146-148 West 22nd Street
The twelve-story condo building plus penthouse includes a retail space and twelve apartments (one on each floor). Eight of the 12 units have three bedrooms and three bathrooms; the rest have two bedrooms and two baths. All the apartments have at least two balconies, and four have terraces. Prices range from $1.4 million to $2.2 million. The building will be ready for occupancy in early 2004. Contact: www.chelseaparadigm.com.

Lower East Side
The Coda
114 Ridge Street
Newly constructed, seven-story rental building with 29 studio, one- and two-bedroom units for between $1,500 and $4,500 per month. The Coda was completed in August and currently leasing. Contact: Citi Habitats, 212-685-7777.

Murray Hill
East 29th Street
Conversion of a seven story building in Murray Hill with 25 residences, with maple floors, top appliances and other features. Many of the units will feature outdoor space with the penthouse offering an outdoor hot tub. Sales expected to begin this fall. Contact: Alchemy Properties, 212-732-0372.
 
Brooklyn
The Atlantic
Rental building on Atlantic Avenue between Henry and Hicks Street. Five-story building with 58 units. Studios start from $1,600, one-bedrooms from $2,000 and two-bedrooms range from $3,000 to $4,000. Leasing is expected to begin in mid-November, and occupancy is expected in December.

Once upon a time, Morningside Heights, near the 116th Street campus of Columbia University, was part of the great beyond, at least from a retail broker’s perspective. But today, the character of the Upper West Side is creeping upwards, past the traditional 96th Street boundary, while Morningside Heights is moving down.

With the addition of large new condo buildings in between, the area “is becoming one big stretch,” says Andrew Goldberg, an executive vice president at CB Richard Ellis.

The result? A rapidly changing retail climate.

Neighborhood supermarkets are the unlikely but illustrative nexus of the two areas, says Scott Edlitz, managing director of Robert K. Futterman & Associates. In recent months, there has been an exodus of traditional grocers, as high-end natural food purveyors have moved onto Broadway north of 96th Street.

“There’s been a lot of shuffling around,” he says.

Across the street from the Columbia gates, a swanky Morton Edwards opened its doors, while the West Side Market down the street closed its doors. Gourmet Garage has also opened for business on Broadway and 97th Street.

One factor prompting a retail upgrade is that new condo buildings offer big retail spaces on the ground floors, Goldberg says.

“Out go some of the older tenants and in come the nationals,” he says.

Edlitz says retail rents in the neighborhood have not skyrocketed, but have risen at a rate consistent with other parts of the city, and are now in the range of $110 to $140 per square foot.

“But the quality and the credit of the tenants has gone up,” he says.

One example: Two years ago, the New York Sports Club, Starbucks and Symphony Space moved into a large new space on Broadway and 94th that would have once been considered simply the edge of the Upper West Side. Now it’s seen as mainstream, despite its northern location, brokers say.

Still, no one seems to be expecting the stretch of Broadway between 96th Street and Columbia to look like it does in the 70s and low 80s, dotted with stores such as The Gap, Victoria’s Secret and Ann Taylor.

At this point, there doesn’t seem to be a need for the fashion retailers that have set up shop farther south, Edlitz says. “You see more service types of businesses,” he says.

But as Broadway becomes stronger, some destination retail tenants are considering spaces on Columbus Avenue past 96th Street, a territory that only recently was considered desirable, Edlitz says.

“There are fewer and fewer spaces on Broadway,” he says. “It’s a continuation of growth.”

Retailers flock to in between neighborhoods and areas expanding their boundaries [more]

Atlanta

Residential

Sea Island, the site of the Group of Eight summit of world leaders this month, is the nation s third-most expensive ZIP code, 31561, with a median home price last year of $2.2 million. Of the 700 property owners on the five-mile-long island, fewer than 10 are not members of the Sea Island Club, where the initiation fee is $100,000.

Commercial

Vacancy in Metro Atlanta s 162- million-square-foot office market rose to 22.4% in May, up 0.7% from year-end 2003, according to Colliers Cauble & Co. The vacancy rate is even worse for the class A market – 24.7% – with 1.2 million square feet of new product currently under construction.

Commercial

A prominent office tower for sale could fetch a record price for Atlanta area real estate. The 424,000- square-foot Pinnacle building could bring a record price of more than $300 a square foot. At the corner of Lenox and Peachtree roads in Buckhead, it is best known for its unusual open arched roof and as the location of the popular Bluepointe restaurant. The record sale price for an Atlanta office building belongs to One Atlantic Center (formerly the IBM Tower), which in 1988 was acquired by Sumitomo Life Realty Inc. for $300 million, or about $273 per square foot.

Boston

Residential/Commercial

There were many rental to condo conversions in Greater Boston 15 years ago, but the pace cooled in the recession of the early 1990s. Conversions are now underway again for different reasons – it s quicker and cheaper to convert an existing rental building to condos than to build a condo project from scratch, and conversions can be a good way to target the lower end of the condo market at a time when more consumers can afford to buy. Recently, Cambridge Side Apartments, a 104-unit building near the Lechmere MBTA station, was sold for $24.7 million to Crescent Heights, a developer based in Miami that specializes in condo conversions. In the first three months of this year, condo sales set a quarterly record. The median sale price for a condo during that period was $232,740, up 14.4 percent from $203,500 a year ago.

Commercial

Fan Pier, a 20-acre mixed-use development site located on South Boston s waterfront, is on the market. The sale has big implications for the area, which is considered the last frontier of developable land in the city. Developer Nicholas Pritzker spent nearly three years getting permits for the $1.2 billion hotel, office and residential complex, but never secured the financing to move the project forward.

Chicago

Commercial

Mayor Richard Daley is placing his bets on a casino for Chicago, calling for an establishment in the downtown area. Daley said he will push for state legislation that would allow Chicago to be the first municipality in the nation to own a license so that state and city taxpayers would receive all of the revenue benefits, estimated at as much as $850 million annually.

Commercial

CB Richard Ellis has replaced Trizec Properties as the manager of the recently purchased Sears Tower. CBRE promises to “return the original luster and international prominence to the Sears Tower,” now owned by New York-based 233 S. Wacker LLC. However, Trizec Properties Inc. s leasing efforts kept three 100,000-square foot-plus tenants at the 110-story building, and kept occupancy above the West Loop market at 89 percent.

Los Angeles

Residential

Many homeowners in Southern California believe the median price of $357,000 in the first quarter represents the top of the market, prompting some to sell now and either downsize, flee to cheaper locales, or rent until activity slows, according to the Los Angeles Times. Homeowners who resold their dwellings after just three years took in about $138,000 after paying off their mortgages, and those who sold their homes after two decades pocketed more than a quarter of a million dollars. Brookings Institution demographer William Frey speculates that robust appreciation in overheated markets like Southern California may spark the relocation of baby boomers entering retirement, many of whom are moving from the region to less expensive areas in Nevada and Arizona.

Others contend that most homeowners are either moving into larger dwellings or staying put due to lack of equity, the inability to secure new housing, or the desire to wait and sell at a bigger profit.

Miami

Commercial

The downtown office submarket saw overall asking rental rates drop and vacancy rates rise in April, according to CB Richard Ellis report on market conditions. While this submarket has seen just 81,000 square feet of leasing activity in the past six months, the firm said the long-term outlook is promising, as new Downtown developments will help create a 24-7 neighborhood.

Commercial

Miami Mayor Manny Diaz is expected to soon announce what may be the biggest private redevelopment project in the history of the Overtown district, which could have a widespread impact on the perpetually downtrodden neighborhood and environs. A $150 million project by Michigan builder Crosswinds would involve building 1,000 housing units in the neighborhood, more than have been built in Overtown in several decades. Around 200 of the units would be available for affordable housing. Fifty of them would be for current Overtown residents.

Philadelphia

Residential

The former Metropolitan Hospital is being transformed into a $30 million, 130-unit condominium complex, with amenities appropriate for a holiday resort. It will have an outdoor pool lined with cabanas, a spa and fitness center. The MetroClub, a circular eight-story, 230,000-square-foot building, is part of active housing growth in Center City during recent years, where construction projects have risen to meet demand. Between 1998 and 2003, the number of apartments and condominiums increased by 4,235 units.

San Francisco

Commercial

In San Francisco, building sales are expected to increase this year and in 2005, according to local brokers. There were relatively few transactions in the city last year because the market had not settled, making it difficult to price buildings accurately. Some brokers point to fire-sale prices. Stuart Shiff, co-chief executive of Divco West Properties of Palo Alto, bought the 555 Market St. office tower last year for $103 per square foot.

Commercial

California Governor Arnold Schwarzenegger issued an executive order calling for a thorough accounting of state-owned real estate assets and the underlying management process, saying the existing system is “disjointed” and “deficient.” The order calls for an accounting of all state-owned assets and identification of “high-value urban properties” that might be sold to help make up the state s multibillion-dollar budget shortfall. A report is slated for completion by June 30.

Seattle

Residential

Home sales in King County, Wash., rose 18.6 percent during the year-over-year period ended in April, while listings dove 20.5 percent to 3,741. The largest sales gains were seen in Maple Valley, Mercer Island, and Redmond. The amount of time that properties spent on the market shrunk from 65 days to 60 days during what is one of the busiest months for home purchases. The supply and demand imbalance has prompted some agents to send letters to homeowners in particular neighborhoods to see if they are willing to sell.

Residential/Commercial

Recent U.S. Census Bureau data shows that 18 out of 24 of the 100 largest metropolitan areas grew their downtowns in the 1990s. Atlanta and Seattle led the pack. Atlanta saw a 111 percent increase in downtown residents during the 1990s, and Seattle s downtown population grew by 44 percent in the same period.

Washington, D.C.

Residential

Home sales in the five-county Baltimore, Md., area surged 25 percent to 3,617 during the 12 months ended in April, while the average sale price shot up nearly 23 percent from $191,950 to $235,682. The city ranks fifth in the nation among overpriced markets, and the National Association of Realtors predicts it will surpass the national appreciation rate once again this year. NAR economist Lawrence Yun credits the city s lean housing inventory, robust job market, and lower prices in comparison to nearby Washington, D.C., for its robust performance.

Commercial

D.C. continued to have the strongest office market in the region with a vacancy rate of 7.2 percent during the first quarter, according to a study by brokers Advantis GVA, compared with 13.1 percent in Maryland and 14.5 percent in Northern Virginia. But there was only moderate leasing in the city despite current construction on office buildings creating 10.2 million square feet. Tenants leased only a net 161,000 square feet in the first quarter, well below the pace of 2003. But analysts say trends are favorable as rents remained stable. Several big law firms are poised to sign leases.

Commercial

The office deal that attracted the most attention recently has not yet been closed, but mortgage company Fannie Mae has signed a letter of intent for 1.5 million square feet of space at Southwest Washington s Waterside Mall, to be renovated and called Waterfront. If the deal is completed, it would be the blockbuster of the year and help trigger redevelopment in Southwest.

Commercial

New York isn t the only city with a new Mandarin Oriental hotel. A 400-room Mandarin Oriental Hotel in D.C. held an opening gala ceremony last month. The waterfront hotel overlooks the Tidal Basin in the southwest section of the city, and is part of an upscale mixed-use development known as the Portals. It took approximately $150 million to complete the property, the first five-star hotel in the District.

Suddenly, it seems as if New York is gaining on Los Angeles in the Adventurous Architecture sweepstakes.

Much to its chagrin, Los Angeles has pitched in to help the Big Apple. The sprawling city – or its beachy neighbor, Santa Monica – has provided New York with Thom Mayne and Morphosis, whose ambitious, exciting plan for the Olympic Village in Long Island City was chosen in late May by NYC2012 for the still-unawarded 2012 games.

Meanwhile, the committee overseeing a huge mixed-use project along Grand Avenue just outside downtown Los Angeles has passed over two locals – Frank Gehry, who one hesitates to call a favorite son, and developer Jerry Snyder – in favor of a very short list consisting of Forest City West, with architects AC Martin, and Related of California, with David Childs.

One key question in New York will be whether developers in Long Island City will proceed with the Morphosis design even if the city’s Olympic bid fails, as seems increasingly likely. The city scored poorly against Paris and other competitors in a recent weighting of potential sites by the International Olympic Committee. Add to that the prevailing – if, perhaps, faddish – anti-U.S. sentiment among the international community, and it appears that the strong support our bid may have enjoyed in the post-Sept. 11 world has weakened considerably.

Nonetheless, it is certainly too soon to give up, especially considering the impressive headway we’ve made and the remarkable planning that has taken place. There could be a deal on a West Side stadium for the Jets, or perhaps one in Queens, where some politicians are now pointing to as a superior site. There could be consensus – and funding – on improved mass transit to the far West Side that would help fulfill planner Alex Garvin and big guy Dan Doctoroff’s vision of an Olympic X. The conversion of the High Line elevated railroad to a pedestrian walkway tying Greenwich Village to Midtown could be completed. New Hudson and East River tunnels could be dug.

It is a great and compelling vision that encompasses our hopes and dreams for a vibrant, livable New York. It doesn’t rely on suburbanization a la Battery Park City; instead, it simply makes living here more fulfilling.

No, it’s not too late to give up. But perhaps more importantly, it’s not too early to start planning in earnest to move these plans forward no matter what the outcome in July 2005, when the final 2012 decision will be announced. Competitive games are great, and those who say they are too costly, too dangerous, too overwhelming or just too plain annoying should think hard about why they live here in the first place. But the real competition New York needs to get into is not one to host the Olympics. It’s the competition to remain a global leader as the new century reaches adolescence and achieves maturity.

There is serious competition on that score, not only from London and Paris but more pressingly from Shanghai and elsewhere in China. Los Angeles, already an industrial powerhouse, could grow in importance as a financial center as the Far East grows. Nothing will doom our future faster than a failure to move ahead of the curve in transportation infrastructure – transportation for goods and for people.

This is the time to begin to look beyond a single dream – the Olympics – toward a far more important reality: relevance and survival. The global economy is stealing up on us and will overtake us if we don’t work together to prepare for a marathon that will take us into the next century.

Real estate professionals are pros at buying and selling homes, adept at marketing properties and experts at reading building comparables. We are also, for the most part, absolutely terrible at securing our own financial well-being.

Take this quick financial quiz:

– What is current the profit/loss ratio of your business?

– Do you have a Self-Employed Pension Plan?

– What were your exact expenses for May 2004?

– Did you correctly estimate your June 15th tax payment?

If you re unable to answer any of the above, you re not alone. Many within the real estate community cannot. And that is extremely disturbing.

Financial planning is critical to every broker s success, but few of us practice it to our benefit. It doesn t matter if you are the industry s number one producer if you don t have a strong financial base. Massive debt, bad credit or bankruptcy can wipe out all of your hard-earned gains.

So why do so many brokers, including many industry veterans, pay so little attention to this business mainstay? “Most brokers don t see themselves as entrepreneurs,” notes Dorothy Somekh, vice president and associate broker at Halstead. I couldn t agree more. Like it or not, we are small business owners and that carries a unique set of responsibilities.

Another key reason is that too many agents rely on broker-owners to run their businesses. I have something to share with you: those days are over.

The real estate industry has changed radically in the past few years and has become much more self-directed. Take control of your business by creating a sound financial program. This is one of the most important business improvements you can ever make.

The first step is to get financial coaching from an accountant and a financial planner. We re in a 24/7 business, and managing the financial end of our business without professional guidance is not only time-consuming, but foolhardy. You don t want to open yourself up to an audit or pay more to Uncle Sam than you should. “My business is profitable in large part because I rely on a team of experts to guide me,” Somekh says.

“I see myself as the chief financial officer of my client s business,” says Lois Feldhendler, president, LFF Consulting, a financial planning firm.

“I assist my customers with their overall financial planning, from developing an annual budget, to analyzing management systems to paying bills.” For many of her clients, this is a huge relief. “They can focus on running their businesses knowing that the financial end of their day-to-day operations is being properly managed,” Feldhendler says.

Aside from tax preparation, a certified public accountant (CPA) can act as a business consultant by providing advice on a variety of complex financial issues such as new tax laws, investment strategies and retirement programs such as the Self-Employed Pension Plan (SEP). “SEP is based on a percentage of your net income after expenses,” says Gary Marks, president, Gary Marks & Associates, Ltd., an accounting firm. “It can significantly lower your tax rate.” He knows that accounting rules and regulations can be difficult to follow for even the most business savvy broker. “I would rather have my clients call me 10 times than make a single mistake,” Marks says. “Their understanding is necessary for their long-term financial success.”

The best way to find a good CPA and financial planner is through referrals or a service. Arrange a personal meeting with at least two or three candidates for each position and get additional references. Take the time to get your financial house in order – it s worth it.

Non-traditional appraisals lead to devaluation in Wall Street bond pools [more]

One out of eight deals delayed due to mortgage issues [more]

Billionaire investor Sam Zell told an international real estate group recently that the future of liquidity in real estate investment trusts was in a global standard.

“We are the last of the capital intensive companies that are not an oligopoly,” Zell said of real estate in a keynote speech at a Houston, Texas gathering in late May. “We need a rule of law and consistent world standards.”

A legal standard would create large, multinational real estate investment trusts, he explained, and give investors opportunities to invest in multiple markets with one company.

Zell is chairman and founder of the largest REIT, Equity Office Properties-one of three REITs traded on the New York Stock Exchange – that owns more than 124 million square feet, and Equity Residential Properties, which owns 210 apartment buildings with 192,000 units.

He typically makes speeches in jeans, but wore a dark suit to likely ensure the members of FIABCI, the International Real Estate Federation, and the National Association of Real Estate Editors joint session would take his message seriously.

Japan, Australia, Singapore, France, Argentina, Mexico and the United Kingdom have so-called REIT legislation pending or in place to allow properties to be publicly traded. But Zell complained the few countries that allow REITs mostly regulate through outside governance. This had proved disastrous for U.S. REITs from 1960 to 1992 as the goals of the outsiders and companies were not aligned, Zell said.

When U.S. laws changed and instant information was available through technology, the new “transparency” allowed the market value of REITs to shoot from $6 billion to $310 billion today.

Zell also claims the net asset value or NAV standard is “outmoded” and does not credit the economies of scale, efficiencies of management or fast financing that can be accomplished by large REITs.

“The future is not the collection of individual assets but an integrated platform that can deliver its services in an efficient manner,” Zell concluded.

“We are very much on the doorstep of a brave new world.”

For buyers in the market for an African nature reserve, there’s a finally a Manhattan broker who is selling one.

Sangeeta Kapoor of Douglas Elliman has a listing for the $14 million Chaminuka Nature Reserve in Zambia.

While $14 million (give or take a few hundred thousand) can buy you the penthouse, delivered raw, at the new 47 East 91st Street, or a 7,500-square-foot townhouse on East 69th Street, it gets you herds of wildlife and entire lakes in Africa.

“Twenty-two years ago it was established as a private retreat by a family who lost their heart to the ancient majesty of Zambia,” says the listing, adding there is a “startling array of wildlife including, cheetah, eland, giraffe, hyena, sable, monkeys, puku, wildebeest and zebra.”

The reserve has also got a view of four different lakes probably pretty similar to a nice view of the Central Park Reservoir from a pricey Upper East Side perch.

Kapoor got the listing from an Upper West Side couple that splits their time between the U.S. and Zambia. Her other listings are for a $8,995 a month rental at 170 East 87th St. and a $1,750 a month rental at 103 West 69th St.

How to Avoid Overexposed Billionaire this Summer [more]

Pop Star Buyers Find Small World in NY [more]

An agent’s profile section on a firm’s Web site can tell a prospective purchaser a lot about them. During research for a recent story, we kept an eye out for some “about me” sections we liked and others that didn’t work so well:

“‘Listen dollface, what’s wrong with looking out at a nice brick wall?’ If this kind of comment is what you loathe, then you will love working with Mary Lou Currier.” – MaryLou Currier, Bellmarc

“Your Dreams, No Assembly Required” – Elizabeth Sheehan, Coldwell Banker Hunt Kennedy

“Inequality of knowledge is the key to a sale” -quote cited by Marc Lawrence, Corcoran

“Susan loves New York, where everything is possible” – Susan Postman, Corcoran

“My trademark is homemade banana bread. Let’s do business, and I will make you a loaf!” -Corcoran broker

“I have the East River in my blood” – Bellmarc broker

Ranking Story Inaccurate

I thought your “The Ranking of the Firms” story in the May issue was inaccurate.

It didn’t make sense to rank firms and agents based on their Web listings – you should have done the rankings based on exclusive listings in contract or closed exclusives.

By basing the story on listings, it rewards people who have a lot of unsold properties just sitting around. Different firms also have different policies for posting listings, and this wasn’t taken into consideration.

Finally, in some cases, you failed to distinguish between agents who had exclusive listings and open listings.

Due to the unique nature of our market area, it is always difficult to get accurate information on comparables and listings, and this is something that needs to be worked towards.

Also, if all agencies had identical listing policies, the problem wouldn’t exist.

Richard Hamilton

Vice President

Halstead

The Editor notes: Often companies complain that figures released by rivals are inaccurate, so we decided to try and get “public” data, off firms’ Web sites. We chose listings instead of sales data because it is impossible to discern when a sale took place, whereas all listings on the Web are “current.” Unfortunately, our data did include a few open listings, because there was no indication these listings were open rather than exclusives. As Mr. Hamilton notes, the absence of a standard of information is a factor, and we believe our story will help inform that debate.

LIC Developers Disregard Community

I read your story “Residential Building Boom Ahead in Long Island City,” and the real deal is that these developers are coming into an existing neighborhood with no regard or respect for the people and buildings already in existence.

They never include the community in proposals, and when they do it’s basically to cover themselves, because the proposal has already been accepted and put forth. They have not tried to integrate into the existing neighborhood and the retailers going into the spaces (i.e. The Riverfront Cafe) have high-end prices which many in the community cannot afford. Instead, they are forming a separate community that might as well have a fence around it to keep the existing community out.

And now they want to build even taller buildings, when the tallest one was supposed to be City Lights and the owners of the condos in the upper floors were told that their view would never be blocked.

I’m an architect. In urban planning classes, it is considered good design, and it is stressed, that the surrounding community must be respected and taken into account. That is not happening here.

Debra Villa

Long Island City

Organize Before Staging

As a professional residential organizer, I thought your article about home staging was right on the money. I also think that the services of a professional organizer should be the logical first step prior to the home staging process.

An organizer can clear the decks- by eliminating the clutter the home stager has a better idea of the “bones” of the space and can concentrate on perfecting the space to make it more presentable.

Anita Dobin

Super Organizing Solutions