The Real Deal New York

 1. What is the thing that s improved the most in the last five years in the industry?

Brokers say:

John Sheets, Director
Brown Harris Stevens
“Technology is getting to the point where it s really saving time.”
“Within the last month and a half at our company, our R.O.L.E.X. listing system now links directly to agents web pages. What might take a buyer a couple of hours on the web to search can take a few minutes for us.”

Jim Mazzeo, President
Weichert Realtors, Mazzeo Agency
“The cooperation among the brokers is much better. The 72-hour rule helped.”

Eddie Shapiro, President
Nest Seekers
“With technology, there is an opportunity for smaller companies to rise up and offer what most major companies have.”
“A kick-ass website can create a certain perception with the public. Ten years ago, if you weren t Elliman, you couldn t pretend to be.”

Adele Brechner, VP
Douglas Elliman
“The whole Internet has opened everything up. It s made it much easier and faster. The downside is you re never off.”

Mary Vetri, SVP
William B. May
“The Internet has been a huge help with my overseas clients. I sold an apartment at the Ritz Carlton in Battery Park – twice – to overseas clients – both times sight unseen.”

Robert Rosa, Associate Broker
Dwelling Quest
“The consumer is a lot more educated. That makes it a bit more difficult getting an exclusive, but a lot of people who try to sell their apartment themselves will go to a broker two or three weeks after they see what s involved in the process.”

Steven Hauser, VP
Corcoran
“I think sharing information has gotten much better.”

Ingrid Johnson, Senior Associate Broker
Corcoran
“Brooklyn is trying hard to start co-broking.”

2. What is the thing that s gotten worse in the last five years in the industry?

Top answers:
43 percent- too many new agents
19 percent problems related to technology
7 percent shortage of inventory
7 percent co-op board-related issues

Brokers say:

Lisa Maysonet, Lisa Maysonet Group
Douglas Elliman
“Too many newcomers. Veteran brokers used to give offers over the phone. Everybody knew each other before. Now, you better put everything in writing.”

Adele Brechner, VP
Douglas Elliman
“I wouldn t be surprised if there were double the number of brokers compared to five years ago.”

Linda Fenn, SVP
Douglas Elliman
“Lots of brokers who haven t been in the industry long enough are burning their bridges. They haven t been through a down market, when they will need other people s help.”

David Goldsmith, Broker
DG Neary
“The thing that has gotten worse is the amount of untrained people coming into the industry. They call on a six-unit building in Soho and ask if there is a doorman.”

Marillyn Abrams, SVP
Douglas Elliman
“Poor cooperation from boards and managing agents. The ego involved in some of these people on boards. They don t say no ; they don t say anything. I think it s gotten worse.”

Linda Baron, The Baron Group
Halstead
“There is far less product than there was five years ago.”

Eddie Shapiro, President
Nest Seekers
“I don t think we are anywhere close to full consolidation. Once Terra Holdings, Elliman and Corcoran sit down together, we re in major trouble. It won t happen now, because they are all earning enough money.”

Lori Berti, VP, Midtown Manager
Coldwell Banker Hunt Kennedy
“As prices got higher, the greed factor goes higher and higher. For example, a seller accepting two offers and sending out two contracts – where each buyer doesn t know the other exists. Or to have an accepted offer and accept another.”

Marie Okada, VP
Douglas Elliman
“People s midnight hobby now is looking for a good deal on the Internet. For the brokers, that means we have to work harder.”
“Also, some people spend too much time on the computer. Buying is so much involved with emotion, and if you rely on the computer too much, you can make a big mistake.”

Laura Matiz, SVP
Bellmarc
“The Internet has made it better. But it both helps and hurts.”

David Margolies, Associate Broker
Fenwick-Keats
“Studios and one-bedrooms have to some degree become easier for people to sell on their own because of the Internet. But they won t necessarily get the best price, or access to the most qualified buyers if they don t use a broker.”

Mary Vetri, SVP
William B. May
“While of course technology has been positive on the whole, my colleagues who only have cell phones is an inconvenience. You can t return calls at odd times. Overall, there seem to be more virtual brokers.”

James Perez, Director
Brown Harris Stevens
“With the Internet, some complain about a little less loyalty among buyers. It hasn t impacted the better brokers; it s more on the margins.”

Naomi Davis, Broker
Coldwell Banker Hunt Kennedy
“We need a real MLS in New York City for the ease of buyers and the brokers.”

Robert Doernberg, Managing Director
Warburg Realty
“I d like to see more cooperation between brokers. A little more civility.”

David Goldsmith, Broker
DG Neary
“Square footage inflation continues to run rampant. We joke in this office that sometimes people determine the asking price, then figure out the square footage.”

3. What is your current take on the market? Is there a real estate bubble?

95 percent Said there is no bubble
5 percent Said there is a bubble

Brokers say:

Alan Sands, VP
Corcoran
“Perhaps a little bit of the air has come out. I tell clients that if you hold on for three to five years, you have to make money.”

Ira Lieberman, Associate Broker
Corcoran
“There is a bubble in everything in life. But I don t see it right now.”

Marillyn Abrams, SVP
Douglas Elliman
“I don t think it s a bubble, but I don t think it can go much higher. A lot of people are waiting around for prices to drop. They are going to miss the low interest rates. They are foolish.”

Marie Okada, VP
Douglas Elliman
“It s a bubble. The sellers are now dreaming, and it s been a strange summer.”

Michael Pellegrino, SVP
Sotheby s
“Sometimes it s true and the bubble bursts. But it goes up higher than it s ever been.”
“It s a strong market now. In general, I tell people to go in with expectation of holding onto a property for at least 7 to 10 years.”

Thomas Healy, VP
Douglas Elliman
“Prices will come down if we have a real recession. It almost took place in 2001, but the recession was short-lived.”
“Buyers got wary because the market was so strong. The election factors in. I think things will heat back up in January.”

Robert Doernberg, Managing Director
Warburg Realty
“I don t buy into the idea of a bubble. It s always people in finance talking about a bubble.”

Adele Brechner, VP
Douglas Elliman
“Some people thought after Sept. 11 it would tank, and it didn t. Some people thought the market would tank after the tech bust, and it didn t.”
“Customers have been telling me there has been a bubble for five years now.”

Laura Matiz
Bellmarc, SVP
“Nothing seems to be affecting demand. This is the longest cycle I ve seen. The 1980s was maybe seven years. This has been 10 years. There is no bubble.”

Linda Baron, The Baron Group
Halstead
“The fact that there is so little product is why the market is holding firm.”

Jim Mazzeo, President
Weichert Realtors, Mazzeo Agency
“The Internet has made the market more efficient, and it has made real estate more liquid, and more valuable.”

4. Are you planning to do more business in Brooklyn, or does the gentrification of Brooklyn not greatly affect you? Do you feel more comfortable selling in any area of Manhattan versus five years ago?

Brokers say:

Brian Babst, Associate Broker
Corcoran
“I m seeing more agents in the Village not turn up their nose at going to Brooklyn.”

Steven Hauser, VP
Corcoran
“Access to Brooklyn is easier in Lower Manhattan, and agents in those areas might be more likely to find their way to Brooklyn.”

Steven Ganz, VP
Douglas Elliman
“In our office [at 90 Hudson Street], probably two or three out of 50 brokers do a significant amount of work in Brooklyn. You have to cover a smaller area to be efficient. I probably leave the office 10 times a day to show.”

Mary Vetri, SVP
William B. May
“All of Manhattan is now popular, but most brokers focus in one or two areas. We have to at least be aware people are more likely to look in different areas, even if we don t specialize in that area.”
“There is a lot more interest in Downtown. I have brokers coming into our office from uptown and asking for directions.”

Marie Okada, VP
Douglas Elliman
“Lofts are becoming so expensive and many people want to go Downtown, especially the new money and young executives from Wall Street.”

5. How are developers meeting or not meeting buyers needs today, and what trends are you are seeing in new developments versus ten years ago?

Top answers:
42 percent better finishes and amenities today
11 percent there are fewer new units
8 percent brokers need to be hired sooner for development teams

Brokers say:

Linda Fenn, SVP
Douglas Elliman
“I think buyers these days are more savvy and looking for greater finishes. For a while before that it seemed like new developments started to look the same.”
“I am working on a new development Downtown. We are looking at bringing in media rooms, pantries, and maids quarters.”

Naomi Davis, Broker
Coldwell Banker Hunt Kennedy
“I just sold an apartment at the Time Warner Center for $4 million. My buyer loved the simplicity of the finishes. It felt elegant and done, but not too fancy.”

John Sheets, Director
Brown Harris Stevens
“More recently, the finishes have gotten much better. It s trickled down to the resale market, and has influenced more renovations taking place.”
“Owners should consult with a real estate agent before making renovations, even if they are not selling right then. Most people don t.”

Michael Pellegrino, SVP
Sotheby s
“Developers have finally started to put in quality finishes. I don t think that was the case 10 years ago. They re usually very neutral, so people are not going in there and ripping stuff out.”

Mary Vetri, SVP
William B. May
“260 Park Avenue is a good example of a developer that is not trying to outdo themselves, which is good. It s not hey look at me , it s unpretentious.”

Robert Rosa, Associate Broker
Dwelling Quest
“Developers are going into neighborhoods with a lot of co-ops and offering condos, like in the Gramercy area with 260 Park Avenue.”

Alan Sands, VP
Corcoran
“In a development I was in last week, there was so much real estate in the bathtub – and so few people use it. It s just sitting there. Double showers would make more sense.”

Laura Matiz, SVP
Bellmarc
“Back in 1986 and 1987, there were an incredible number of units built. There is nothing like that now.”
“We re seeing smaller buildings and not as many sites. You can only build so much compared to the past – that s why the market is doing well.”

Eddie Shapiro, President
Nest Seekers
“Ten years ago, there were 40,000 new residential units a year in the city. It s about half that now.”
“The bar is raised more and more in terms of new amenities. We re not even at the top of where it could be.”

Merle Belaief-Witt, Associate Broker
Coldwell Banker Hunt Kennedy
“In the 1980s, a two bedroom was 900 square feet. There are more family-sized apartments around now.”

Rita Fisher, Broker
Gumley Haft Kleier
“Buying into new developments, you are not going to break even if you rent it out. This was easier to do before.”
“This is true of buildings as well. People are selling the potential, that you can convert it to condos, for example- rather than the rental income.”

Lisa Maysonet, Lisa Maysonet Group
Douglas Elliman
“The biggest problem with developers is not hiring a development team early enough.”
“Sometimes the floor plans are screwed up by the time they come to us. They should hire a development team the second they hire the architect.”

Ingrid Johnson, Senior Associate Broker
Corcoran
“Developers do not do enough market research.”

Paula Novick, VP
Corcoran
“I think the commission structure is better for brokers now – the fact that developers are not discounting to the outside public.”

Steven Ganz, VP
Douglas Elliman
“The overtaxing of new conversions is a negative trend. You could have 80 cents per square foot being just your taxes.”
“Unlike new construction, conversions are for the most part not abated; the most you ll get is 10 percent off. Taxes are maybe 40 percent higher than five years ago. If they went and reassessed that, it would be good.”

Robert Doernberg, Managing Director
Warburg Realty
“I m shocked by some of the prices, but that s New York. At 55th Street and 2nd Avenue [where the Milan was recently completed], if you told me ten years ago you d get $1,000 a square foot in that area, who would have believed you.”

David Goldsmith, Broker
DG Neary
“One of things I saw was as prices went up, developers were more loathe to do things specified in the contract with a buyer, like getting the certificate of occupancy on time, in hopes that buyers would back out and the developer could sell the unit for a higher price.”
“No buyer walked away before, because they knew they would make money. In the last five months, some people have started to walk away if the developer doesn t come through. I don t want to make the impression that all of this was widespread, though.”

Lori Berti, VP, Midtown Manager
Coldwell Banker Hunt Kennedy

“As more and more of us are working longer hours, we have to have a lot more things done for us. I think we ll see a lot more concierge-type services.”

6. What is the most difficult part of your job, or the most difficult person (or type of person) you have to deal with?

Top answers:
1. Setting up appointments
2. Preparing buyers for co-op board process
2. Decreased buyer loyalty as a result of Internet

Brokers say:

Steven Hauser, VP
Corcoran
“The hardest part of the job is setting up appointments.”

Linda Baron, The Baron Group
Halstead
“Co-op boards have gotten tougher. The reason is that apartments might have gone up 50 percent in value, but people s incomes haven t. Many people who purchased a few years ago wouldn t qualify now.”

Edith Tuckerman, SVP
Brown Harris Stevens
“With technology, people expect direct results. When things are not accelerated, people get upset.”

James Perez, Director
Brown Harris Stevens
“You need to be a little quicker pointing out stuff to buyers, or they will move on to the next agent.”

Rosita Sarnoff, SVP
Stribling
“The hardest part is making the deal stick. Buyers and sellers are much more nervous than they were before.”

Brian Babst, Associate Broker
Corcoran
“There is a significant difference in servicing among agents. The tough part is showing your value to buyers and sellers without being ham-handed.”

Alan Sands, VP
Corcoran
“Frustrated buyers who have lost bidding wars are the most difficult. They are on the edge. They are frustrated. It s understandable.”
“Sellers that still don t want to believe its July, not January, market conditions are also tough.”

Ingrid Johnson, Senior Associate Broker
Corcoran
“Dealing with evil people. People who lie and are unprofessional, who promise and can t deliver.”

Tom Healy, VP
Douglas Elliman
“The difficult part is the competition. It s caused me to want to develop personal contacts to a greater extent.”
“Five years ago, you could find a slew of open listings, and when you contacted them, they d say yes right on the phone. Now, 500 other people are contacting them, so why bother.”

David Margolies, Associate Broker
Fenwick-Keats
“It s gotten a lot more vicious in pitching. Instead of extolling one s own virtues, you re seeing more criticism of other companies. I ve seen this with some agents at the larger companies.”

7. Should there be more (or different) education and requirements for agent and brokers licensing?

62 percent – Yes
38 percent No

Top responses:
1. There should be more hours for licensing
2. Shouldn t be more requirements; experience matters more
3. Curriculum should be changed for licensing

Brokers say:

Michael Pellegrino, SVP
Sotheby s
“It should be made much more strict for the brokers and salesperson s license. There should be more hours put into it.”
“I have a broker s license in Florida. Getting your license is more difficult in Florida and California.”

Thomas Healy, VP
Douglas Elliman
“They need to change the licensing so it addresses aspects of selling in the city versus the suburbs – apartments versus homes.”

Alan Sands, VP
Corcoran
“I just did my brokers license exam. Twenty-two and a half hours for continuing education doesn t seem like enough.”
“As far as educational programs, the NYU programs are good.”

Linda Fenn, SVP
Douglas Elliman
“There needs to be more support and a little bit more policing from the managerial side.”
“I respect the managers highly, but companies that are expanding are getting so many new agents, it s hard to micromanage them.”

Lisa Maysonet, Lisa Maysonet Group
Douglas Elliman
“I think there should be better standards for new agents. On Wall Street, you have to take the Series 7 exam. Buying a home is more serious than a Wall Street trade.”

Rita Fisher, Broker
Gumley Haft Kleier
“A lot of people get their license instead of paying commission on something they want to buy. At least that s the case in Florida.”
“There have always been a lot of brokers – but the good ones are going to do all right.”

Laura Matiz, SVP
Bellmarc
“Ninety-five percent of transactions are done with brokers, and there is a reason for that. But more licensing wouldn t matter – you have to have experience, and high ethics.”

Steven Hauser, VP
Corcoran
“It s more about experience. The market works out who will and who won t stick around.”

Edith Tuckerman, SVP
Brown Harris Stevens
“The cream rises to the top.”

Jim Mazzeo, President
Weichert Realtors, Mazzeo Agency
“I try to only hire college graduates.”

Poll finds new agent influx worst trend, tech best [more]

If Manhattan is the borough of concrete canyons, Brooklyn is the borough of stoops and walk-ups. Brooklyn dominates all other boroughs with 43 percent of all walk-up buildings in the city.

Market tracking company First American Corporation says there are 40,388 walk-up apartment buildings in New York, with 17,665 in Brooklyn, 10,834 in Manhattan, 6,410 in Queens, 5,119 in the Bronx and 360 in Staten Island.

The sheer size of Brooklyn the most populous borough with 2.4 million residents, versus 2.2 million in Queens and 1.5 million in Manhattan is one reason why Brooklyn leads the pack.

Rents are the other reason. Georgia Malone, president of commercial brokerage Georgia Malone & Co., says high Manhattan rents gave developers economic incentive to build more high-rise elevator residential buildings in Manhattan than in Brooklyn, which has seen proportionally less redevelopment along its tree-lined streets.

Brooklyn beats out Queens because Brooklyn is an older, more densely settled borough. Much of Queens’ modern urban development happened in the 1950s, and most new construction was and remains elevator buildings rather than walk-ups, says Malone.

When it comes to walk-up revenues, though, an investor probably would fare better with a building in Manhattan compared to Brooklyn, says Eric Roth, president of Friedman-Roth Realty. This is partly because maintenance costs are higher in the outer boroughs than in Manhattan, because of the higher turnover of tenants which require more expenses when preparing units for new tenants. Insurance premiums are higher in the outer boroughs than in Manhattan as well, he says.

More fundamental is the fact that rents are lower in the outer boroughs than in Manhattan, making it more worthwhile to spend money on improvements in Manhattan when a vacancy occurs, in order to maximize return on investment.

Walk-up apartments make up 25 to 30 percent of the city’s residential housing stock, and new investors are trying to cash in on the tricky, but potentially lucrative segment of the market.

Still, real estate brokers among the best informed members of the pool of potential buyers aren’t joining the ranks of new building owners in any sizable numbers, because the market is so hot. Maybe too hot.

“It’s just a small percentage because the prices have gotten so high,” says Marc Lewis of Manhattan Apartments Inc. “The average broker doesn’t have $5 million to buy property.”

Bargains are so thin on the ground they are almost nonexistent, he says. The lower prices from a building’s first sale are largely gone since most walk-ups have already been sold two or more times.

In addition to prices, probity is also an issue. Bob Knakal of Massey Knakal Realty thinks it’s a bad idea for brokers to be buying these properties, citing potential problems down the line. “I don’t think it’s a good policy,” Knakal says. “I think it’s a conflict of interest and it’s something that our firm doesn’t do.”

Knakal says a broker with a reputation for buying properties would make potential buyers wonder why he’s not buying the property he’s selling. Other brokers don’t see a conflict of interest, especially if the listing isn’t exclusive. They says problems are avoided if the broker fully discloses his interest to the seller.

“Why should real estate brokers not have the same benefit as everybody else?” said Eric Roth of Friedman-Roth Realty. “If they disclose [their interest], then it’s not a conflict of interest.” He readily admits that exclusives are a different matter. “Of course, it’s different where someone is listing property with a broker as an exclusive.”

Joel Radmin of Extreme Realty says Knakal’s view stems from his firm’s practice of dealing mostly with exclusives.

Georgia Malone, of commercial real estate brokerage Georgia Malone & Co., says brokers would be foolish to forego the upside of the current market. But she admits that conflict of interest is a real challenge.

Apart from full disclosure, Malone thinks a way out of the potential “quagmire” is for the broker to agree not to buy the property for himself if it isn’t sold. This way, Malone says the broker will exert his best efforts to represent the seller and still collect his commission.

Foreclosures on home loans have trended downward in the city during the last year, according to Foreclosures.com, a company that provides foreclosure lists for investors.

While foreclosures are the ugly side of home ownership that everyone hopes to avoid, buying a foreclosure can be a lucrative investment.

There were 1,960 foreclosures in New York City during the second quarter of 2004, a 17 percent drop from 2,354 during the second quarter of 2003, the company said.

Foreclosures also have been trending down in Chicago, Los Angeles, and San Francisco, but not as dramatically as in New York. New York had a higher rate of foreclosures at the beginning of 2003 due to the after-effects of Sept. 11, foreclosure analysts say.

There are many places to look for foreclosed properties. The federal government forecloses on hundreds of thousands of homes each year. Banks and financial institutions also take back homes that they have loaned funds against.

Banks refer to the properties they retrieve as REOs, for “real estate owned.” Within larger banks, there are REO departments devoted to the resale of these properties. Many smaller banks do not have REO departments, but do have a person who handles the disposition of foreclosed properties.

Finding a foreclosure before anyone else – or a “pre-foreclosure” that allows you to be the only person negotiating with a motivated seller – can give you an additional advantage.

In the case of bank REOs, becoming familiar with local contacts of REO departments can help. You can tell them the type of home you are looking for and the area. If you check back regularly, you may obtain information on homes before they are added to public databases.

Newspapers can be another source of information about pre-foreclosures. Check “for sale by owner” and “homes for rent” ads. Sometimes, these represent the last efforts of homeowners who are so strapped that they can’t afford to lose money toward a real estate commission.

Finally, public court documents give you information about homes 30 to 180 days prior to foreclosure, according to a story by Scripps Howard News Service. In every state, a legal notice must be filed before a foreclosure can be finalized.

The length of time between the initial legal action and the final resolution varies nationwide, but the procedure is the same. In most states, a “forcible detainer” is filed. It may indicate the property address, name of the homeowner and amount owed. This action is filed prior to the actual foreclosure and gives you enough information to contact the homeowner directly.

Prices shoot up, even as rents decline; still a good buy [more]

If Manhattan’s commercial market has only one word for some of its biggest buyers, then lately, that’s been “Wilkommen.”

A favorable exchange rate, looser domestic investment regulations and years of low interest rates mean German investment funds, most backed by money from individual investors, have become major property buyers in New York, amassing a 16-million-square-foot portfolio that includes both Class A Midtown trophy space and, increasingly, purchases in other areas of Manhattan, including condominiums, Class B office space and Downtown properties.

While the peak purchasing period has probably passed, industry observers say the shift beyond the blue-chip properties of the past reflects a changing market on both sides of the Atlantic, and those shifts account for a more than 200 percent increase in total German investment here since 2001.

According to commercial market tracking firm Real Capital Analytics, German investors pumped $780 million into New York property in 2001 and have closed transactions valued at $2.5 billion for the year to date, making them the biggest foreign buyers in the city.

In the 1980s, Japanese buyers were by far the most prominent real estate investors, snapping up marquee properties that included Rockefeller Center and a stake in the Empire State Building, but those investments eventually yielded little in the way of profits.

German investors won’t be making the same mistake, says Barbara Knoflach, a senior managing director at SEB Immobilen Fonden, in Frankfurt. The 4.7 billion euro ($5.8 billion) fund last year bought 2 Park Ave. from Vornado Realty Trust for $292 million. Although the 964,000 square foot office building isn’t surrounded by the typical Class A space favored by foreign interests in the investment sales market, SEB thinks it’s a winner, she says.

“We are focusing on the income stream of tenants in their investment sale properties,” she says. “Trophy buildings usually have the highest volatility, and we are making conservative, income-oriented, long-term investments.”

That suits the dentists of Dusseldorf and the burghers of Berlin just fine – the individual investors who’ve given funds such as Jamestown Properties an average of 28,000 euros ($34,400) each are expecting steady yields of around seven percent, and U.S. properties have delivered.

New York remains the biggest U.S. market for funds such as SEB and Jamestown, buyers of a 25 and 75 percent interest in Chelsea Market, respectively. Real Capital Analytics figures show New York properties account for 71 percent of all $3.5 billion worth of German purchases of U.S. real estate this year.

“They invest in places that they know,” says Dan Fasulo, a Real Capital associate. “And every euro that comes this way is worth about 30 percent more than it was three years ago. These properties are looking very cheap.”

Changing Tastes Follow Changing Laws

Not long ago, New York was verboten fruit for German investment funds. Germany was long home to some of the most onerous investment restrictions in the European Union, but in 2002, the country liberalized its investment laws. The changes allow Germany’s 19 open-ended real estate investment funds to commit greater percentages of their capital outside the EU, lifting the 20 percent ceiling and allowing them to hold minority stakes in properties. That has allowed buyers such as DEGI, Deka, Kanam and the Paramount Group to get footholds in New York property portfolios.

In some of the big recent deals in addition to the Chelsea Market purchase, Jamestown this March paid $185 million for a 70 percent stake in 111 Eighth Ave., a 2.9 million square foot building at West 15th Street between Eighth and Ninth avenues. Last September, Frankfurt-based GVA Geno bought a majority stake in 150 Fifth Avenue. The 11-story, 208,000 square foot building at 20th Street serves as the North American headquarters of EMI Records.

The shift from Midtown offices reflects a market that’s also shifting, prompting prospective buyers to look harder for investment sales properties. This summer, the Federal Reserve Board approved two interest rate hikes of 25 basis points each, and put the key federal funds rate at 1.5 percent. That put sellers and buyers on a countdown clock, says Eric Negrin, a senior vice president at CB Richard Ellis, which late last year was involved in GVA Geno’s $102 million recapitalization of 150 Fifth Avenue, in which it remained in partnership with L&L Acquisitions.

“There are a lot of sellers, and there’s a lot more product these days,” he says. “Part of the reason is that people are trying to get product into market before anticipated rate increases accrue.”

Market observers say buying has subsided since a Haus-Invest global fund went into contract for the Manhattan Mall earlier this year in a transaction valued at $400 million. Still, the alignment of eager sellers and buyers that are newly confident in the New York market has kept brokers busy.

“There was a period [after the new law was passed in 2002] where nobody wanted to go first,” says Woody Heller, head of the capital transactions group at Studley.

“They wanted to let their retail customers know they were making a change, and so they had enormous surplus capital. They didn’t say ‘We’re anxious to be more flexible’, but these funds did say, ‘Ideally, here’s what we’d like’, but we’re willing to be more flexible.”

Yields Yield Deals

Flexibility, sagging equity market returns and a slumping bond market put other parts of Manhattan real estate on the boil, say brokers. The attractiveness of real estate yields means buyers are willing to pay for secure income streams, such as the one Knoflach saw at 2 Park Ave.

“We’re on pace to meet last year’s sales volume of $86 billion,” says Negrin at CBRE. “Even a six percent return looks pretty good compared to stock investments where you might actually lose money. And yield compression has become so great that Germans, along with other investors, have expressed interest in Midtown South and Downtown. Now they’re better known in the market and are proven closers.”

Steve Zoukis, a partner in Jamestown’s Atlanta office, says “a lot of people thought we’d lost our minds” when his group bought One Times Square in 1997. That willingness to cast a wider net brought them to the Chelsea Market deal and to the 111 Eighth Ave. deal his group closed in March, and he says investors are pleased.

“We have a brand in Germany that tells people we’re going to deliver highly reliable yield and at least modest appreciation,” he says.

But part of making investors happy, he says, is knowing when to pull back.

“We’re out of good ideas right now, and we think today’s market is just goofy,” he says. “There’s no way that we can, with a straight face, project even modest appreciation. We’re pretty much out of the market right now.”

Leasing remained strong through the normally slow month of August, according to a report by Colliers ABR, though another look at the market said it remained subdued.

The Manhattan class A vacancy rate dipped to 10.1 percent in August, down from 10.3 percent in July, due to strong direct leasing, while sublet activity remained flat.

A report by Grubb & Ellis had a somewhat different take, finding the market “quiet,” mostly because it was August. The vacancy rate held steady at 10.7 percent from the month before, it said.

“Overall vacancy and average rental rates were as flat in August as the temperatures: not too hot, not too humid,” the report said. “In fact, things were pretty mild.”

The report also noted that “availability rose slightly” when JP Morgan Chase put 588,000 square feet at 1 Chase Manhattan Plaza and 297,800 square feet at 95 Wall Street on the market. The move proved that “despite restoration of transportation and all the rebuilding Downtown, tenants are not yet ready to commit to staying.”

Other companies, including CB Richard Ellis and Cushman & Wakefield, did not release their reports by press time.

Midtown

Midtown saw its class A vacancy rate drop to 9.8 percent, the first time it has fallen below the magic 10.0 percent figure since February 2003, the Colliers report said.

Activity was especially strong in Times Square where the vacancy rate dropped sharply to 10.1 percent from 11.7 percent, thanks to Ann Taylor taking 300,000 square feet at Times Square Tower and other deals.

“The Times Square class A vacancy dropped significantly,” said Robert Sammons, research director at Colliers ABR. “And all the other submarkets in Midtown are doing well generally.”

Sammons said the news that Time Warner will take back 200,000 square feet of space at Columbus Circle that it had planned to lease out “will help the Midtown West submarket.”

He said that the Rockefeller Center submarket was “struggling a little” because Time Warner gave up its old space there and the Associated Press moved to 450 West 33rd Street.

In the Plaza submarket, space being vacated by Bloomberg LP at 110 East 59th Street is “also an issue,” said Sammons. Cantor Fitzgerald announced it would take 122,000 square feet of the Bloomberg space, “but that’s only part of it,” Sammons said.

Class A average asking rents in Midtown edged up to $54.95 per square foot in August from $54.63 per square foot in July, the Colliers report said.

The Grubb & Ellis report found the Midtown vacancy rate dropping to 9.8 percent from 10 percent the month before, similar to the Colliers findings.

Midtown South

Midtown South recorded some improvement in its class A vacancy rate in August as it dropped to 8.0 percent from 8.3 percent in July, the Colliers report said.

The largest block of space remains the almost 300,000 square feet available at 51 Madison Avenue from New York Life.

Average asking rents remained relatively flat at $29.17 per square foot, just 2 cents below the $29.19 per square foot recorded in July.

“There are a lot of firms looking in Midtown South for price reasons,” said Sammons. “There are a lot of older buildings being renovated, convenient transportation and a real mix of residential, retail and office space.”

The Grubb & Ellis report found the vacancy rate at 10.8 percent, up from 10.4 percent the month before, in contrast to the Colliers findings.

Downtown

Progress continues to be made Downtown with the area’s class A vacancy rate falling to 11.3 percent from 11.6 percent in July, the Colliers report said.

The current vacancy rate is Downtown’s lowest since December 2001, when it was 9.6 percent.

However, JP Morgan Chase and Prudential space that is eventually being vacated was not factored into the Colliers report, because it hasn’t been put on the market yet.

“It’s really mixed,” said Sammons. “We’re probably talking about 1 million square feet of added space.”

Some Chase space 20 Pine Street will be converted to residential, easing the impact, however.

New and diverse tenants are also looking in the area, with WOR Radio signing a 15-year lease for 22,150 square feet at 111 Broadway last month and Newsweek looking in the area.

“Downtown is half the cost of Midtown when you factor in incentives, and it’s becoming hip,” said Sammons.

He said he is optimistic going forward.

“It might even drop to 10 or 10.5 percent vacancy, which is great for Downtown. It’s better than people probably thought it would be at this point.”

The class A average asking rent climbed for the fourth month in a row to $35.47 per square foot in August, up from $35.11 per square foot in July, the Colliers report said.

The Grubb & Ellis report found the vacancy rate steady at 13 percent from July to August.

The top three industries for new real estate transactions this year have been the usual suspects: law, financial services and not-for-profit and government organizations, according to a report by Colliers ABR.

But the fourth on the list is a surprise – apparel manufacturers.

“Garment makers are doing quite well,” said Robert Sammons, research director at Colliers ABR. “That’s kind of a surprise.”

In the first eight months of 2004, new leasing among these firms in Manhattan has hit over 1.1 million square feet versus just over 800,000 square feet for all of 2003.

Three transactions make up the majority of that figure, with Ann Taylor taking 297,000 square feet in the newly opened Times Square Tower, Ecko Unlimited taking 271,000 square feet at 28 West 23rd Street, and Tommy Hilfiger signing for 205,000 square feet at 601 West 26th Street.

Another 30 smaller tenants also signed deals as well this year, primarily in the garment district west of Sixth Avenue. The leases reported include firms taking additional space.

“There are lots of smaller tenants too, not just the big boys,” Sammons said.

The spaces being leased are headquarters office locations, not actual manufacturing locations, which for the most part have moved out of New York City, the Colliers report said.

As Times Square has gone from real estate pariah to darling, nearby neighborhoods are trying to copy its success.

In the Penn Station area, one company has decided that giant billboards are one way to emulate its neighbor to the north.

Vornado Realty Trust, which owns many of the buildings in the neighborhood, including 1, 2 and 11 Penn Plaza, as well as 330 West 34th Street, put up a gigantic sign on Seventh Avenue, a block north of Penn Station, which advertised the Fox News Channel during the Republican Party convention.

“We’ve been trying to change the feel of the area,” said Mel Blum of Vornado Development, a division of the REIT. “The city agreed the area needed change, and allowed more signage.”

Many people say the billboards and other measures are starting to have the desired effect.

Ben Korman, a principal at C & K Properties, put $91 million behind his optimistic assessment of the once run-down area with backing from Zamir Equities. This summer, the two companies purchased a 16-story office building at 132 West 31st Street, also known as Penncom Plaza. “Obviously, it’s a neighborhood we believe in,” Korman said. “The West Side is a target development area.”

Mitchell Kunster, an executive vice president at Cushman & Wakefield, agrees. The neighborhood benefits from proximity to Midtown and the train station, he said.

“Most important, though, is price,” Kunster said. “It’s still a cheaper alternative to Midtown.”

But Michael Forrest, executive managing director at CH Commercial, an affiliate of Citi Habitats, is less sanguine. He thinks the neighborhood will not continue to develop until the New York economy starts producing more jobs. He said low rents are not enough to draw tenants.

“As a tenant you have a lot of choices,” he said. “People looking for deals have other areas of Manhattan to go to.”

Many of the buildings around Penn Square also used to hold garment manufacturers and still don’t offer the basic amenities that attract office tenants, Forrest said. While 132 West 31st Street is 99 percent occupied, and Vornado’s buildings do well, the neighborhood as a whole won’t take off until the market is tighter and would-be tenants are priced out of other markets, Forrest said. But right now many landlords won’t invest in upgrading their buildings on spec. “Class B and C properties there haven’t had extreme makeovers yet,” he said.

Kunster disagrees. He said that many landlords have indeed renovated their buildings to accommodate non-manufacturing tenants. In the past year, his firm has worked on a deal with Calvin Klein for Class B showroom space on a side street, he said. The company renewed and expanded in a lease for 140,000 square feet at 205 West 39th Street. Even if the old factories are gone, the neighborhood is still the garment district, Kunster said.

“That’s where their buyers are,” he said.

C & K Properties’ Korman also said the loft buildings offer plenty of opportunities. They are “a very good alternative to traditional buildings.” They appeal to more artistic companies, from photographers to music industry companies to architects, he said.

The neighborhood’s feel has improved, on a qualitative basis, over the past four to five years, due to increasing residential development as Chelsea creeps upward to 34th Street, Korman added.

“It’s bringing with it better retail,” he said. That means commercial development will naturally follow suit, Korman said, bolstered even more by the convenience of being located close to the train station and burgeoning development on the far West Side.

And who could forget its neighbor to the north, Times Square?

“It’s filtering down,” Kunster said.

Whether Vornado’s billboards have played a part is anybody’s guess.

Brokers believe Downtown could become the next retail hot spot, and hope Wall Street bonus money will drive sales and spread the wealth.

The desired lift could come from a pair of proposed automobile dealerships that could augment a commercial market largely known for a few stalwarts, such as the Century 21 department store and J & R Music World.

Lincoln and Range Rover dealerships are eyeing showrooms in the area, according to Joseph Aquino, a managing director of Garrick-Aug Worldwide Ltd.

“It appears to be a real sleeper, but it’s a powerful market and could be an alternative to Tenth and Eleventh Avenues,” he said. “Once one of them makes a commitment, there could be a flurry of activity because the whole market is untapped.”

Aquino is not alone in this hunch. In its summer retail market report, Colliers ABR made the same prediction. It said that car showrooms will locate there “looking for Wall Street ‘players’ to spend their bonuses as soon as they walk out of their offices.”

It’s plausible, agreed Steve Soutendijk, an associate with CB Richard Ellis’s Tri-State Retail Services Team. But Soutendijk said automobile dealers wanting to move Downtown haven’t been “knocking on our doors.”

Still, Downtown has the right combination of relatively low prices and high traffic, at least during the week, so it could happen, he said. “For Manhattan retail, it’s the lowest rent south of 125th Street,” he said.

Downtown rents seem to be staying low. The average retail rent this summer was $59 per square foot, an increase of only $1 a square foot from last summer, according to the Colliers report. That compares to average retail rents of $125 a square foot in Midtown, up from $112 last summer.

Those prices mean that automobile dealers could afford to rent larger spaces than the 5,000- to 10,000-square-foot mini-showrooms that exist on Park Avenue.

“It just makes sense,” Aquino said. Automobile dealers “couldn’t afford to be on the Sixth Avenue, but here they have the same market. On the one side are big earners, and on the other side are administrative employees.”

That’s buttressed by the thriving fortunes of the financial services industry, which anchors the district. According to the Colliers report, bonuses have jumped 50 percent from 2002. That’s critical, because auto dealers are seeking “impulse buyers,” Aquino said. He also said it’s no accident Mercedes-Benz and Ferrari have the showrooms on Park Avenue.

With 280,000 workers Downtown making an average of $140,000 a year, the chances for impulse buys are many, brokers said. As Downtown’s residential base grows, retail should get a boost, Aquino said. “You want to get cars closer to people,” he said.

One limiting factor, however, may be a lack of spaces that lend themselves to auto showrooms, Soutendijk said. “It’s a question of the buildings Downtown,” he said. “They aren’t suited physically to retail.”

The maximum headaches at Max Capital Management Corp. are subsiding with the increased likelihood of a settlement between Adam Hochfelder, the real estate wunderkind who helped found the investment firm, and his partner Anthony Westreich, which would end a protracted battle for control of the $1.1 billion portfolio.

“It’s going to be closed soon,” company spokeswoman Roxanne Donovan said in late August. “I’ve been representing Max Capital for a long time, and this is the most optimistic I’ve ever been, and that’s good news for the company.”

No agreement had been worked out by press time, but people who know the company said the tension and hostility that marked chief executive and chairman Hochfelder’s rift with Westreich, the company president and son of a Virginia property magnate, ebbed considerably as the summer progressed.

Neither Hochfelder, who owns 51 percent of Max Capital, nor Westreich, owner of the other 49 percent, would comment for this article. Sources close to the firm say the principals mutually agreed to refrain from discussing the conflict.

If a settlement is reached, observers suggest that Westreich will continue to specialize in lease management, while Hochfelder will return to the wheeling and dealing of buildings that characterized the initial approach of Max Capital.

According to industry observers and previous reports, Westreich’s style is far less aggressive than Hochfelder, and his vision of the company curtailed its acquisitions.

Based on Max Capital’s track record, in which it did 21 major deals in its eight-year history, Hochfelder takes a markedly different approach to real estate.

The current split is not the first time Hochfelder’s business pairings have led to conflict. The current head of Max Capital is still embroiled in a lawsuit brought by former partner Richard Kalikow, with whom he founded the firm in 1996. Kalikow, a veteran real estate investor, teamed up with Hochfelder, and the company amassed a $2.7 billion portfolio estimated at 8 million square feet at its height – all while Hochfelder was still in his early thirties.

At different times, Max’s holdings included 230 Park Ave., the former Conde Nast Building at 350 Madison Ave. and 450 W. 33rd St., the home of the Daily News. Its four-building portfolio is now estimated at 2 million square feet of space.

After a disagreement over the direction of the company, in 2002 Hochfelder eventually bought out Kalikow for about $35 million, according to published reports. Kalikow then sued his former partner and Hochfelder’s wife, Amy Hochfelder, for allegedly withholding information he claimed would affect the purchase price.

That lawsuit, and a countersuit Hochfelder filed against Kalikow in 2003, continue to drag through the Supreme Court of the State of New York. According to court records, Judge Charles Ramos dismissed five of Kalikow’s nine complaints, but neither case has been resolved.

Cushman & Wakefield scored a coup last month when it hired away CB Richard Ellis’ head of brokerage operations for Midtown as well as other employees from the company.

CB Richard Ellis responded by drawing from its deep bench to appoint a new head for Midtown operations from the company’s Stamford office.

In the ongoing rivalry between the two biggest commercial firms in New York, Joe Harbert, previously vice chairman and general manager for CBRE, was lured away to Cushman as chief operating officer for its New York metro region.

Harbert started in real estate in 1987 at the Edward S. Gordon Company, which later became Insignia/ESG, and was part of the old establishment of that company, which merged with CB Richard Ellis last year.

Some industry observers had predicted a significant amount of departures from the company following the giant merger, but that has yet to materialize. Harbert didn’t return calls for comment, and it was unclear whether his departure was related to the aftermath of the two firms coming together.

Peter Riguardi, president of Jones Lang LaSalle in New York, said the move was unexpected.

“Joe Harbert was a surprise – though brokers tend to move around a little bit,” he said. “I’m sure that was a big loss for them.”

While he said he didn’t know the reason for the departure, Riguardi noted that “it always takes a couple of years” for things to settle out when mergers take place.

“Also, there is always a change when you go to a locally managed firm to a firm managed from somewhere else,” he said.

At CBRE, Harbert had also headed brokerage operations Downtown and was in charge of retail services. Prior to entering real estate, the political science PhD had co-authored a book on international relations and served as deputy executive director of real estate for the Metropolitan Transportation Authority.

To replace Harbert, CBRE drew from its Stamford office. Dean Shapiro had run the company’s Westchester and Fairfield operations since 1999, bringing about a 300 percent growth in revenue over that period, according to CBRE.

Shapiro was also part of a CBRE team that last year garnered the Fairfield County Deal of the Year Award from NAIOP, for a deal that secured a new corporate headquarters for the Golf Digest division of Advance Publications.

Steve Iaco, senior managing director for corporate communications at CBRE, said Shapiro would bring a more hands-on style than Harbert.

“Joe is a fantastic guy, and I think Dean brings different attributes to the equation,” he said, adding that Shapiro was more actively involved in “client services and business development” while Harbert had “more of a managerial role.”

Shapiro also has experience in New York City, working as a member of CBRE’s consulting group from 1989 to 2000. In Stamford, he will be replaced by Robert Caruso, who served as the second in command there.

Last month, C & W also rehired top broker Michael Burgio following a two-year stint with CBRE.

Burgio started with C & W in 1984, and was named as one of the company’s top 10 brokerage professionals in the nation on two occasions.

Some of his notable recent transactions include a 210,000 square foot lease renewal for New York Presbyterian Hospital and a 107,000 square foot lease for Beth Israel Hospital.

In another hire, C & W brought on board John Gallagher to serve as a director of brokerage services for its New York offices. The newly created position will be partly technological and research-driven in nature, and Gallagher will be responsible for monitoring and coordinating brokerage resources for business development opportunities.

Q. How is loss factor calculated for commercial space?

A. According to NYspace, the last thing a landlord’s agent wants to point out to you is the loss factor. If this is overlooked, it can be the most costly mistake you make.

Loss factor, theoretically, is the percentage of the space “lost” to the common areas of the building or the proportional share of common areas attributed to a specific space. Loss factor can and does vary between different buildings, and even from floor to floor within a single building.

The factors included as “common” are things such as the lobby, elevator shafts, stairways, super’s office, boiler room, storerooms, bathrooms, hallways, and other areas.

What isn’t factored in is that some owners have added an extra area for calculations imagination, according to NYspace.

Tenants should be aware that it exists. They should measure the spaces that seem to work best for them and over which they can negotiate so they will be able to determine the price per “useable” (as opposed to “rentable”) square foot. This way it creates a comparison of the value per useable square foot of one space to another, an apples to apples evaluation.

Q. I work in residential real estate and was curious about my counterparts on the commercial side. How are commissions structured for commercial real estate leasing deals?

A. According to NYspace, a commercial tenant-rep firm in the city, in the 1930′s, when Manhattan vacancy rates were very high, owners and landlords found that it was in their best interest to let every broker market their space.

They began to use an “override commission” system, where the owners paid both the listing and tenant’s brokers. Although this was a little more costly than a “co-brokerage” arrangement, where all brokers split one commission, the owners found that their space rented faster and they made more money in the long run. All brokers had access to all listings.

This system is still in use today, regardless of market conditions.

As far as income, overall, commercial brokers earn a lot on fewer transactions than residential agents.

Alan Schwartz, president of Glen Equities, says that commissions for commercial transactions are generally lower percentages than residential sales, but still offer significant earning potential, because the transactions are for larger amounts of money.

In leasing transactions, commissions are calculated on a sliding scale according to the rent as paid over the term of the lease.

August is typically one of the quietest months of the year for apartment sales, and brokers said this summer was no exception, with sales down from July. The market has slowed down since overheating early in the year, though brokers said sales are still relatively strong.

“It’s slowed down from a frenzy earlier this year, but it’s not slow,” said Lori Berti, Midtown office manager for Coldwell Banker Hunt Kennedy.

“The spring was phenomenal, and the summer market has been a little bit more typical,” said Linda Fenn, a senior vice president at Douglas Elliman.

According to a study by appraisal company Mitchell, Maxwell & Jackson, the number of signed contracts in Manhattan south of 96th Street declined 4 percent in August compared to the month before, decreasing to 534.

That was less of a slowdown than seen last year, when sales volume in August was 26 percent lower than in July, the study said.

The median sales price finished two percent lower in August from the month before, $611,500 compared to $625,864. Prices were 22 percent higher than last August, the study said.

“We haven’t really seen any break in prices,” said David Goldsmith, a broker at DG Neary Realty.

Brokers are generally more concerned with what happens in September, after Labor Day, when activity generally picks up.

“It’s been hard to determine whether it’s been a little slower because of the summer or because of something else,” said Judith Karnas, an associate broker at Douglas Elliman.

“After Labor Day we’ll really see what’s happening in the current market,” John Sheets, a director at Brown Harris Stevens, said at the end of August.

Goldsmith of DG Neary Realty said there will be several points at which market trends will become clearer.

“If it was really a summer slowdown, we’ll know a week after Labor Day,” he said. “If it is uncertainty about the election, we’ll know a week after the election.”

“If it’s a general market malaise, we won’t know until February,” he added. “By that time, we’ll know what bonuses are and we can factor that in.”

Jim Mazzeo, president of Weichert Realtors, Mazzeo Agency, said it will take a little longer than right after Labor Day to get a clearer picture of the market.

“The market is traditionally a bit slow in September as well,” he said. “September is a weird month-you have the Jewish holidays, the beginning of school, people closing up their summer homes. October gets much better.”

Mazzeo also said a slow market would not be all bad. “That would increase the inventory a bit,” he said.

Lofts, one of the only New York properties with a reputation for spaciousness, are shrinking.

The trend has been in evidence since Sept. 11, following a period when lofts were designed and built as big as possible.

During the second quarter, the average size of a loft apartment that was sold was 1,853 square feet, an 11 percent drop from the 2,077-square-foot average seen in the prior quarter, according to the Douglas Elliman Manhattan Market Overview.

While the report said the dramatic drop was influenced by the availability of housing stock during the quarter, shrinking lofts are becoming the norm, observers say.

“As far as a long-term trend,” said appraiser Jonathan Miller, who authors the report, “loft units have been trending downward in size over the last year-and-a-half.”

But if they’ve been getting smaller, lofts are still big. The average loft sold during the second quarter was more than 400 square feet larger than the average condo, and almost 600 square feet larger than the average co-op.

They’re still hot the average price per square foot for lofts set a record in the second quarter at $791 per square foot, up 13 percent from the year before.

The average sales price declined 6 percent, which may indicate that the units sold are smaller.

Younger buyers are fueling the loft lifestyle, said Leonard Steinberg of Douglas Elliman. Designs for lofts especially newer ones vary, but space never goes out of style, something to which younger New Yorkers seem drawn.

“The concept of loft living is very appealing,” Steinberg said, “because it’s versatile. The first and foremost characteristic when you have a loft is the big, open living space.”

Sean Murphy Turner, a senior vice president at Stribling & Associates who has specialized in Tribeca real estate for 10 years, said many of her most recent buyers are savvy enough to demand the spaciousness along with high quality interiors the kind of interiors featured in lifestyle magazines.

With living in a loft comes a certain kind of New York bragging rights one can’t claim, say, while living in an Upper West Side co-op or a Park Slope townhouse.

“It’s almost like people are buying a lifestyle, because, with the lofts downtown, they’re forming their own neighborhoods,” Miller said

While lofts got their start in the 1960s in buildings that used to be warehouses and factories, eventually turning Soho and later Tribeca into hot neighborhoods, they are now are creeping beyond these locales most notably in Chelsea, around Sixth and Seventh avenues in the 20s.

Dumbo, another residential neighborhood developed from converted industrial space, will soon see more loft space. Two conjoined buildings that occupy a full block at 70 Washington Street and 35 York Street are being converted into luxury apartments. Two Trees Management is spearheading the development. The buildings currently house a mix of industrial tenants, whose leases all expire this year.

More than a year ago, Sarah Gee, a broker with Citi Habitats, started the “Tenant Tattler,” a newsletter to keep family and friends informed about how she was navigating the currents of the New York real estate market.

She then added her own clients to the monthly newsletter’s e-mail recipient list, found new topics for articles and created a means of circulating her name in a competitive field.

Newsletters provide a regular report to a broker’s existing clients and have been an effective means of attracting new ones. In the New York market, these do-it-yourself newsletters are not a new phenomenon, but one that keeps spreading as apartment prices rise and competition for prime space spirals upward. There are no reliable figures on how many newsletters are out there, but dozens of agents have seen how they boost business.

In her newsletter, Gee answers questions, educating clients and sometimes herself in a breezy style light on jargon, but heavy on information.

“It obviously started out with friends and family,” Gee said, “and then I started adding my clients as I add on. The questions I get from people I try to turn into topics. A lot of it is things I think I should learn more about.”

John Venekamp, a director at Brown Harris Stevens, has published the “Venekamp Report” with a partner, Leslie Singer, for about two years. Mailed on glossy paper at least three times a year, the newsletter includes analysis of market trends, some current listings, and news about new developments.

“It’s a marketing piece for us,” said Venekamp, a veteran of more than a decade in New York real estate. “It’s a branding piece for us, and a chance for us to communicate on a regular basis.”

One of the first New York brokers to produce a newsletter, Roger Erickson, started his so long ago he says he can no longer remember the title.

“I started a newsletter in 1987, having discovered that keeping in touch with customers and prospective customers was an important ingredient for them to remember I was in the real estate business,” said Erickson, now of Sotheby’s International Real Estate.

Brokers follow simple guidelines to lay down enticing, readable newsletters, making them accessible and informative, so they don’t read too much like the marketing tools that, in fact, they are.

Successful newsletters use a conversational tone that packs in information tailored to a specific audience, according to broker-publishers. They tell of properties for sale, trends in the market, neighborhood demographics, and places to buy groceries near that dream Classic Seven.

“Keep in mind that the more general the content that is, non-targeted the less impact it will have,” wrote Internet marketing consultant Michael Russer in Realtor Magazine. “Articles should be short and punchy.”

Gee’s August newsletter, for instance, dissected the differences between co-ops and condos: “As you set out on the hunt for the perfect pad, you’ll be confronted with the two varieties of real estate ownership in our fair city: Co-ops and Condos. What on earth is the difference, and which one is right for you?”

In the summer edition of the “Venekamp Report,” the regular column “Singer Says” included an invitation for parents to a September seminar hosted by Brown Harris Stevens, “The Nursery School and Kindergarten Application Process.”

Contact information is also a must for newsletters, brokers say, because, while they do not often lead directly to new clients, newsletters can spark a buzz that may draw fresh clients. Plus, if they’re easy to forward, particularly by e-mail, they can provide a tidy introduction to a broker for someone in the real estate hunt.

Newsletters, too, can serve as reminders. Gee talked to a prospective client in the autumn of 2003 who wanted to buy but not right away. Nearly a year passed, and she used “Tenant Tattler” to remind the client she was still available.

With success stories like these to stoke the creative fires of their broker-authors, newsletters are likely to be a permanent feature of the New York market. Erickson says he stopped producing the newsletter he started in the late 1980s because of a glut in his market, as individual brokers and firms launched their own.

“I decided to move on, and many years ago began sending out announcements about my closings to my contacts and prospective sellers,” Erickson said. “After a while, this, too, became commonplace.”

Still, brokers say, the newsletter can provide a leg up in a competitive business that draws more and more new agents.

“It’s helped me keep customers,” Gee said.

Editor’s Note: The Real Deal wants to post agents’ newsletters on our web site. Please send info to se@trdeal.com

Brooklyn has another major player in the increasingly crowded residential brokerage market.

Last month, Douglas Elliman made its first foray into the borough with the acquisition of Marilyn A. Donahue Real Estate.

Douglas Elliman joins Brown Harris Stevens and Corcoran as the major Manhattan players in the Brooklyn market. The only Brooklyn-based firm that rivals those Manhattan firms in size is Fillmore Real Estate, which has more than 500 agents.

With the purchase, Douglas Elliman acquires two offices, one on Montague Street in Brooklyn Heights and another on Court Street in Cobble Hill. Terms of the deal were not disclosed.

Marilyn A. Donahue, which was founded in 1967, is a small firm with 10 agents.

But Dottie Herman, CEO of Douglas Elliman, said the plan was to expand quickly.

“We’re looking for space – we’re in the process of negotiating a lease for a 5,000 square foot office,” Herman said.

Herman said the buy is the first of many acquisitions and the first move towards the establishment of a “strong presence” in the borough.

“We’ll get ourselves situated there first,” she said. “Then we plan to grow through acquisitions, as well as grow from within. We have a lot of agents that currently live in Brooklyn.”

Herman didn’t say whether she plans to stick to the upscale parts of the borough – “Brownstone Brooklyn” – or whether she wants to expand to other areas.

Herman said she had known Donahue, who is a neighbor on the East End of Long Island, where both own houses, for the past two years.

“I knew her through one of our managers on the East End,” said Herman. They started talking about a deal “in the last six months or so.”

Donahue, who will become an executive vice president with Douglas Elliman, said the time was right to make a deal.

“Since 1997, it had been clear to me that the Manhattan market had discovered Brooklyn,” she said. “The success of the market right now is one of those ‘overnight’ successes that has taken 37 years.”

In June, Halstead bought 25-agent William S. Ross Real Estate, with offices in Brooklyn Heights and Cobble Hill. A month later, Brown Harris Stevens bought William B. May’s operations in Brooklyn, which include two offices.

Not every Brooklyn company wants to be bought by a larger firm.

“We’re very happy to be the way we are here,” said Danielle Moss , an agent at Harborview Realty, a high-end boutique firm of 15 agents in Brooklyn Heights. “Now we’re more or less the only one special, because the other companies are being bought up.”

“I don’t see a reason to be a part of a bigger company,” added Moss , who once worked at Corcoran. “I don’t want to work in a factory.”

Foxtons, the discount brokerage that has drawn the ire of many in the industry with a business model and ad campaign boasting 2 percent real estate commissions, has tweaked its plans and will now phase in a 3 percent commission rate for fuller services.

Foxtons will become a more traditional, full-service residential brokerage that will post home listings on multiple listing services, according to the Star-Ledger newspaper in Newark.

Under its original business model, Foxtons marketed its own listings and would not post the listings on a MLS.

The company’s web site, Foxtons.com, still features promotions for the 2 percent package, though the company will reportedly phase in the new 3 percent rate, which is still half the traditional commission rate.

Heads of some Manhattan firms, including Citi Habitats president Andrew Heiberger, had called the 2 percent business model “unsustainable.”

“At the end of the day it’s not going to be two percent,” Heiberger

predicted at the end of last year. He said the company’s business model shortchanged sellers in not conducting weekly open houses, in not marketing properties to the broker community or mounting professional marketing campaigns, and in not being able to draw enough traffic to its web site.

“It’s very na ve and unprofessional of them to think all a broker does is list and show. Forget the two versus six percent issue. You could lose out on, say, 14 or 15 percent of the value of your home in selling it incorrectly,” he said.

Van Davis, former president and CEO of Century 21 Real Estate Corp., took over in July as the head of Foxtons after the departure of former chief executive Glenn Cohen.

Cohen, who founded the company in 2000, said he could not comment on the change.

The West Long Branch, N.J.-based company operates throughout the tri-state area with around 300 agents, but only has a small presence in Manhattan.

Fort Greene
The Brig
There’s new life for the site of the Brig, a former naval prison adjacent to the Brooklyn Navy Yard, which was later used as a city correctional facility before prisoners were transferred to Riker’s Island in the 1990s. The building will be demolished to make way for up to 400 apartments, as well as retail and community space, Mayor Bloomberg announced last month. It will include both affordable and market-rate apartments. The city’s Department of Housing Preservation and Development will issue a competitive request for proposals for development for the 104,000-square-foot site in 2005.

Midtown
Plaza Hotel
Fifth Ave and Central Park South
The Plaza Hotel is being sold for $675 million and some rooms are going condo. The price was the highest per room ever paid for a New York hotel at $838,000 a chamber. The sellers were Saudi Prince Alwaleed bin Talal, the fourth-richest man in the world, and British hotelier Millennium & Copthorne. The buyer is an affiliate of El Ad Properties, which owns hotels throughout Israel and is known in Manhattan for its conversion work. Projects include 21 Astor Place. The as-yet-unspecified number of condos will sell for $2,000 per square foot.

Harlem
279 West 117th Street
A 138-unit mixed-income apartment building opened last month at 117th Street and Frederick Douglass Boulevard. There are 42 apartments reserved for low-income tenants, with rents ranging from $380 for a studio to $879 for a three-bedroom apartment. The project was completed with the participation of the city’s Department of Housing Preservation and Development.

Park Avenue South
260 Park Avenue South
The former headquarters of the United Federation of Teachers is being converted into 110 condo units. There are 70 contracts out already, and 55 are signed. One-bedroom apartments of about 900 square feet start at $860,000, two bedrooms of 1,300 square feet start at $1.2 million, and three bedrooms of 2,650 square feet start at $2.92 million. The 4,000- square foot duplex penthouse, which has a swimming pool, is selling for $7.99 million. The conversion, by Tessler Developments, will be completed in 14 months. Douglas Elliman is marketing the project. Contact: sales office, 212-505-6260.

Prospect Heights
1 Prospect Park
Architect Richard Meier, who designed the celebrity magnet towers at 173-176 Perry Street, is working on a new project in Prospect Heights. The building, on Eastern Parkway, is for developer Mario Procida of Seventeen Development LLC and should be ready in two years. It will be 16 to 18 stories tall, and feature one-, two- and three-bedroom units, but will \”not be luxury,\” Meier told New York magazine. It is tentatively known as 1 Prospect Park.

Red Hook
60 Tiffany Place
The 36-unit condo development will have one-, two- and three-bedroom units selling for between $475 and $600 a square foot. The building will likely be finished at the end of the year. The developer is Marshall Sohne.

Upper East Side
170 East End Avenue
Garden Homes Development, which recently purchased Beth Israel Medical Center’s Singer Division property at 170 East End Avenue, is planning a new residential development for the site, which it says will maintain the original footprint of the former property. The building will be geared towards families who want to work and live in Manhattan, and empty nesters missing the city. The purchase also included two adjacent apartment buildings at 530 East 88th Street, and Garden Homes said it plans to renovate the rental buildings, which have 74 apartments.

West Village
423 West Street
Developer Michael Yanko is planning a narrow 10-story tower with eight condo units. The project will likely include a chef stationed in a basement kitchen who would cook dinners for residents. Contact: Corcoran Group Marketing, 212-343-5400.

West Village
163 Charles Street
Developer Kenny Schachter is planning a nine-story building with six condo units on a 22-foot lot next to architect Richard Meier’s planned 165 Charles Street project. Architect Zaha Hadid, winner of the Pritzker Prize, is designing the building. Construction could begin by early next year.

Construction Update

Upper East Side
One Carnegie Hill
A 40-story, 400-unit project on the north side of 96th Street between Second and Third Avenues broke ground in August and is expected to open in late 2005. Developed by Related Rentals, it’s the first of the company’s 16 rental buildings throughout the city to offer both rental and condo units. The bottom half of the tower will be rentals and the top half, starting at the 23rd floor, will be sale units.

Sales Update

Wall Street
Downtown by Philippe Starck
15 Broad Street
Contracts have been signed on more than half of the 326 units at the project, according to The New York Times. The former headquarters of J.P. Morgan and an adjoining 42-story tower is being designed by Ismael Leyva Architects and Starck. Collaborators on the project include Manish Chanda and Natalia Tunon. Sales began on Aug. 4, and prices have ranged from $470,000 for a studio to $2.64 million for a two-bedroom apartment. Contact: downtownbystarck.com.

New Developments From Previous Months

The Chelsea Club promises to be a home that feels more like a hip hotel.

The 12-story, 42-unit condo building now under construction on West 19th Street near Tenth Avenue is being targeted to Chelsea’s stylish set, with touches that include everything from double showers to plasma TVs in leather-clad elevators.

“Part of the plan was to take away the residential aspect and have a more clubbish feel,” said Andres Escobar, whose company designed the interiors for the building. “It’s like a hip hotel environment. The whole design is sexy.”

Apartments will range in size from 700 to 1,600 square feet, and 10 contracts had been sent out by mid-August, a week after sales began, said Mona Gora, a principal in Moe-Joe Developers. The firm’s most recent project was the conversion of the former Bloomingdale’s building in New Rochelle into 72 condos, and this is their first out-of-ground construction.

Gora used terms like “icy” and “floating” to describe the building, which will feature a nearly all-glass façde designed by Karl Fischer Architects.

Inside, residents will walk into a two-story lobby with serpentine columns wrapped in stainless steel and a “floating” glass desk where there will be 24/7 concierge service.

A private clubhouse and lounge on that floor will be a bit warmer with more wood and leather and serve as a place for residents to meet guests or just hang out.

“When you go into a boutique hotel, it’s a scene, and it will be similar to that,” said Escobar, whose other projects include The Gretsch Building in Williamsburg. “Also, you won’t have to invite people up to your apartment if you don’t want to. You can meet them in the lounge.”

Two sets of elevators will, in a majority of units, open up directly into one’s apartment. Residents can watch TV as they ride up from the on-site parking garage, which has 18 parking spaces.

“It’s a seamless transition from parking your car to the door of your apartment,” said Gora.

Apartments will feature all the top amenities, and bathrooms will feature double shower stalls, with back-painted glass, instead of bathtubs.

“There is a sensual aspect to it,” said Escobar. “It’s about no inhibitions.”

Linda Alexander, who is representing the developers, said the project is “targeted for Chelsea.”

“I don’t think you’ll see many Upper West Side families,” she said.

Prices for units ranged from $400,000 to $1.8 million as of last month.

The summer movie “I, Robot,” features a future in which robots are an everyday household item and parking garages automatically stack, store and dispense cars like they were items in a vending machine.

While you probably won’t see robot-servants anytime soon, the first automatic parking garage is set to debut in New York.

123 Baxter, a new condo building under construction in Little Italy, will feature a 67-car garage that retrieves cars for owners automatically.

Owners who swipe their keycards as they board the elevators will find their cars waiting for them by the time they reach the lobby of the 25-unit building, which is being built by developer ADG Organization. The building is set to be completed in 10 months.

Monthly parking permits will cost around $375, or $4,500 a year, and residents of the building will get a discount.

Meanwhile, buying a parking space in the city the old-fashioned way of parking. can run more than $150,000.

In the Grabler Building at 44 Laight Street, each of the 14 parking spots cost $169,000 as of earlier this year.

All this pales in comparison to the mother of all parking spaces – Jerry Seinfeld’s private Manhattan garage on West 83rd Street.

After five years of renovation, the two-floor garage was completed this past spring. It holds only five cars, plus a bachelor pad with plasma screen TV and pool table upstairs.

Atlanta

Commercial

Cousins Properties is planning a new Buckhead skyscraper, paying what brokers say is the highest price ever for land in the Downtown area. The developer is under contract to buy 10 acres at the corner of Peachtree and Piedmont roads, where it plans to build a 20-story, 500,000-square-foot office building. Cousins will pay an estimated $92 a square foot, or $4 million per acre for the land. The developer recently sold its Pinnacle office building in Buckhead for $145 million, a record $343 per square foot.

Commercial

Wal-Mart is starting to make inroads in urban markets after a decades-long strategy of opening stores in rural areas. But the retailer faces opposition with its plans to open stores in Fulton, Forsyth and DeKalb counties, where residents are concerned about declining property values and traffic. Wal-Mart hopes to open three sites encompassing 613,000 square feet of space at a cost of $30 million, Globest.com reports.

Boston

Residential

The high vacancy rate for old office and industrial buildings in downtown Boston and Cambridge, coupled with the increasing demand for city housing, has given property owners the opportunity to sell their less desirable assets to residential developers for conversion into condominiums. The most recent example is One First Street in Cambridge, which was originally built in 1866 and formerly was the home of the Davenport Furniture Co. The six-story, eight-building complex was purchased by Legatt McCall for $14.4 million, and the company plans to develop 199 condominium units, parking, and retail facilities at the site.

Commercial

Fan Pier, the 21-acre mixed-use project considered the heart of the redevelopment of South Boston’s waterfront, was sold to Lennar Corp. last month. The Florida-based, publicly traded home builder said it will build housing, a hotel, a new home for the Institute of Contemporary Art, retail space and public parks on what is now a giant parking lot overlooking Boston Harbor. Lennar, which was something of a surprise buyer, promised to “keep faith” regarding the city’s previous vision for the site. The purchase price was reportedly around $125 million.

Chicago

Residential

As mortgage rates have fluctuated this summer, there has been a rush of home buying around Chicago. Sales of new houses in Chicago, for instance, soared 68 percent in the second quarter, while suburban sales edged down 5 percent, but only because there was a shortage of supply, according to real estate consultancy Tracy Cross & Associates Inc. In the second quarter, Chicago-area home prices were running 10 percent ahead of a year ago.

Commercial

One of the city’s prime retail buildings was set to fetch a record price last month. Developer Thomas Klutznick was poised to sell 730 North Michigan Ave. to a client of J.P. Morgan Chase for $250 million. At roughly $1,150 a square foot, the deal would make the building one of the most expensive pieces of real estate in the city’s history. The seven-year-old building, with only 217,000 square feet of space, includes tenants Tiffany & Co., Polo Ralph Lauren and American Girl Place.

Las Vegas

Residential

Las Vegas is the hottest real estate market in the nation, according to a report last month by the National Association of Realtors. In June, the median price of an existing home in the Las Vegas area was $245,000, a 48.5 percent increase from the previous year. In one example cited by the association, a house in northwest Las Vegas that sold for $236,000 in June 2003 sold for $409,000 a year later. However, industry experts said the market is beginning to show signs of strain, and agents report fewer bidding frenzies for homes, though the market is still active.

Commercial

Donald Trump is going to Las Vegas. The Donald filed plans last month to build a $300 million tower, clad in the developer’s signature glass and gold, which will become the Las Vegas Strip’s tallest building. Hotelier Ian Schrager is also planning a project in the city.

Los Angelos

Commercial

A surge of spending on luxury goods is sending ripples down Rodeo Drive. Several luxury boutiques have seen business increase since the city of Beverly Hills completed an overhaul of its streets. The revamp, finished a year ago, widened sidewalks and medians on the opulent thoroughfare and added new palm trees, street lights and crosswalks. Prada opened a three-story store last month that reportedly cost $40 million. Clothier Dolce & Gabbana recently doubled its space at 310 and 312 North Rodeo to 12,000 square feet. Across the street, accessories purveyor Coach recently signed a lease. London developer Grosvenor is also erecting a speculative four-story building at 308 North Rodeo that it hopes to lease to a single tenant when it’s completed this fall.

Residential

The median price for a home in Orange County was $525,000 in July, compared to $400,000 for all of Southern California. Many buyers are seeking more affordable alternatives in areas such as the Inland Empire, north and east of the boom market. The median prices in San Bernardino and Riverside counties in July were just $257,000 and $327,000, respectively.

Commercial

The Related Companies, which developed the Time Warner Center, was chosen as the prospective developer for 3.2 million square feet along downtown’s Grand Avenue by Los Angeles city and county government. The New York company beat out several rivals to win the right to negotiate on an estimated $1.2 billion of new development.

Miami

Commercial

The Miami Arena, a facility with a long history of troubles, has a new owner with a controversial reputation, according to The Miami Herald. Palm Beach County investor Glenn Straub won an auction to buy the arena for roughly $28 million. Straub, who once publicly described himself as a “dictator,” has drawn strenuous criticism from former neighbors and was once sued by his own brother, according to the newspaper. He said he intends to keep the 14,696-seat venue going, despite the fact that it has lost money in recent years. Staub, who owns Broward Yacht, plans to hold conventions, boat, car and horse shows, and other events in the arena.

Philadelphia

Residential

Foreclosures have reached stunning levels in the Pocono Mountains, especially among home buyers new to the area, according to The New York Times. A report by two state agencies found that nearly one in five households in the region are in foreclosure proceedings. Many owners in foreclosure are former renters from Brooklyn, Queens and the Bronx who were drawn by marketing campaigns. The newspaper said many paid more than market value for their homes.

Commercial

Brandywine Realty Trust, the largest owner of prime Philadelphia-area office space, announced last month it was buying the real estate assets of the Rubenstein Co., a veteran player in the region. The $600 million, 3.5 million-square foot deal includes trophy buildings in Center City One and Two Logan Square and a near monopoly in the suburban Radnor office market. Brandywine owns nearly 30 percent of the Philadelphia region’s Class A office space, and will have around 23.8 million square feet of office space with the new purchase.

San Francisco

Residential

A listless labor market has pushed thousands into real estate jobs in San Francisco but there are too many agents and not nearly enough listings. Since 1999, the number of Bay Area Realtors has surged 44 percent, from 21,700 in 1999 to the current 31,200. In the same period, the number of home sales has increased only about 10 percent meaning there are about four transactions annually for every agent in the region, compared with nearly 5.5 deals per agent in 1999.

Commercial

Marsh & McLennan Cos. agreed last month to the biggest office lease in San Francisco since 2000. The world’s largest insurance brokerage struck a deal to take 250,000 square feet at One Front Street. The new digs will consolidate 1,000 employees now housed at three city locations. Rent rates were more than $30 a square foot. Cushman & Wakefield represented both the insurance company and landlord Morgan Stanley in the deal.

Seattle

Residential

Sales of King County homes priced over $1 million nearly doubled from July 2003 to last month, according to the Northwest Multiple Listing Service. In all of western Washington last month, pending sales of $1 million homes offers that have been accepted but have not closed rose to 95, one of the highest numbers in five years. Sales of multimillion-dollar homes have risen partly because more are for sale and partly because sellers have reduced prices from Internet boom levels, agents say.

Commercial

The leasing pace for industrial space south of Seattle is on track to quadruple by the end of the year, according to a story in the Puget Sound Business Journal. Already during the first two quarters of this year, 3.2 million square feet of industrial space has been absorbed in the Kent Valley. That’s twice the average annual net absorption rate for that region during the past 10 years. Brokers said the industrial sector is at the early stage of a new growth cycle.

Washington, D.C.

Residential

Many people who can’t afford the prices in the Washington area are moving to Baltimore and commuting, according to the Greater Baltimore Board of Realtors. The average home price for Baltimore and its five surrounding counties was $262,000 in June, up 20 percent from $218,000 the year before. Total units sold were up 14 percent compared to the year before.

Residential

Two years ago, the corner of 13th and U streets NW was a commuter parking lot for the Green Line of the Metro. Now, it is home to one of the city’s newest apartment buildings, the Ellington (named for jazz composer Duke Ellington), which is selling itself as a cool place in a hot neighborhood. There has been a wave of condo and apartment construction near U Street, in addition to new bars and boutiques. Many brokers are promoting the area as up-and-coming, active and safe, though the neighborhood is still not as densely populated as some other D.C. areas popular with renters.

Fort Greene, a neighborhood dotted with landmark buildings, the Brooklyn Academy of Music campus, and impressive brownstones and brick townhouses, has seen boom and bust for more than a century, but the latest wave of gentrification appears to have some staying power.

Brooklyn’s neighborhood-by-neighborhood evolution as a destination location for Manhattan refugees has driven real estate prices up and prompted plenty of new development in Fort Greene, where townhouses are selling for about $1 million. Brokers says prices have gone as high as $1.6 million, and believe those closings indicate a solid turnaround for a community where the same buildings sold for as little as $250,000 after the stock market crash of 1987.

“They’re coming here because it’s a proven lifestyle to a lot of people,” said broker Anthony Santangelo, manager of the Fillmore Real Estate office in Fort Greene. “It’s not like they’re coming here just because it’s a good deal.”

Ralph Jawad, 39, whose family has owned a store and other buildings around Fulton Street for three decades, said he has seen the fortunes of the neighborhood rise and fall over the years.

“I’ve watched the neighborhood go and come a couple of times,” he said. “But the last five years, it’s going one way now with real estate prices. Rents just went up to the roof.”

The Jawad family is developing three two-bedroom units in a building on Fulton that may rent for $1,500 to $1,800 a month, though a neighbor’s luxury two-bedroom unit on Lafayette Avenue recently rented for $3,500. Still, Jawad said he is more likely to turn the units into co-ops. Santangelo said a 1,000-square-foot, two-bedroom co-op in Fort Greene may sell for $500,000 to $600,000.

Jawad’s father, Abdul Jawad, plans to move from Bay Ridge to Fort Greene, his first move in decades.

“The neighborhood is quiet and clean,” said Jerusalem-born Abdul Jawad. “It’s changing a lot. Anybody who has a house is fixing it before it was not like now.”

The history of Fort Greene has been one of contrasts. Once predominantly a community of middle-class African-Americans, it was known as the “Black Belt” from 1880 to 1930, when half the blacks in Brooklyn lived in its northern section. It was the site of two stations on the former Underground Railroad, which helped fugitive slaves reach freedom, often in Canada. Fort Greene Park is reportedly where Richard Wright penned Native Son.

But the neighborhood fell into disrepair in the mid-20th century. Many spectacular townhouses built in the mid-19th century by speculators to attract Manhattan millionaires to the south side of Fort Greene were abandoned, and the park became a haven for drug dealers.

Eva Daniels, founder of Eva M. Daniels Realty, remembers repeated showings of the same houses when she started her real estate career in 1982.

“When I moved here, it wasn’t the safest neighborhood,” she said. “It was mostly rooming houses and shell buildings.”

Daniels witnessed a sea change in the spring of 1998. She knew the tide had turned when she sold “a beautiful brownstone” on South Portland Street for $555,000.

“I think that happened because things in Manhattan and other parts of downtown Brooklyn were so expensive,” she said. “People said, okay, I’ll look in your area.”

When Daniels first moved into her storefront on Fulton Street in 1986, most of the surrounding block was boarded up and one bar, Frank’s Cocktail Lounge, made up the nightlife in the neighborhood. Now, the community is rife with cafes, bars and ethnic restaurants that draw youthful Manhattanites on weekends. The renaissance invites comparisons to Greenwich Village.

“There was a time when that wasn’t so,” said Daniels. “Now it is so. It’s just unbelievable what’s happened.”

One designer who is intimately familiar with the neighborhood is Ben Bruno, who has worked on the upscale restaurant Gia, as well as a refined brownstone townhouse on South Portland Street, for the past four years.

“Other than Brooklyn Heights, Fort Greene is probably the most preserved neighborhood in Brooklyn,” he said.

The allure of Fort Greene is spreading north of the park, despite wariness about proximity to public housing projects. City-guided redevelopment of the Brig, a 104,600-square-foot site containing a naval prison adjacent to the Brooklyn Navy Yard, will feature as many as 400 new homes and apartments, some affordable and some selling at market rates, as well as commercial and community space.

West of the park, the new 549-unit co-op development at University Towers comes with parking, a rare find in Fort Greene, an area known for ample public transportation but scant space for private vehicles. A block north, Myrtle Avenue is now a small-scale restaurant row.

Townhouses north of the park, surrounding the landmark Masonic Temple, along with various universities, schools and medical centers, are going for $800,000 and $900,000, Daniels said.

“People were afraid of the other side of the park, because of the projects,” she said. “That’s changed. There are people being displaced out of the projects right now. I feel the projects will become condos some day.”

The City of New York has been steadily selling off its property since the end of the 1990s, and those sales of land and subsidized development opportunities have been rich fodder for the developers who have snatched up some of the 8,000 municipal properties sold.

Those same buyers will likely head up the queue when the Metropolitan Transportation Authority begins its much anticipated divestment program for its estimated $1 billion worth of property (see related story).

Overall, more than five agencies handle sales or leases of city-owned property to private entities, and all of them use separate advertising, bidding and sales practices.

The Department of Administrative Services, or DCAS, is the city’s clearing house for property leases and sales, which means it matches 44 city agencies, and 20 mayoral departments with their needs for property. It also disposes of property, and since 1996 has reduced the city portfolio of 11,000 properties to about 3,000, according to Warner Johnston, a spokesperson for the agency.

“Many of these were sliver lots, and mapping errors,” said Johnston, “and others were tax foreclosures,” or in-rems, from the 1970s and 1980s. All of the property held by DCAS is sold at auction, with 20 percent cash required at the time of sale. The city offers buyers the mortgages.

“There’s always good deals to be had,” said Johnston, especially if you hold property next to a sliver that has little value to other bidders.

In the fiscal year ending July 30, DCAS sold more than $20 million in property, offered $12 million in mortgages, and generated $51 million in leasing revenue.

At an auction held Aug. 4, the city sold 70 parcels for a total of $30 million. A former police precinct house at 72 Poplar Street in Brooklyn fetched $9.6 million, paid by local investor Maurice Laboz, well above the minimum bidding price of $225,000.

Four large lots with frontage on Lenox Avenue and 125th Street in Harlem were sold for $2.6 million well above the minimum bid of $844,000. At 9,000 square feet, the property is now worth $288 per square foot.

In 2003, DCAS sold over more than 60 community gardens to the Trust for Public Land in a bid to assuage local communities that had converted them to local public spaces.

No further auctions are planned for the year, although investors can sign up to be notified by electronic or regular mail. More information is available at www.ci.nyc.ny.us html/dcas.

Auction Alternative

While buying at public auction sounds like a great deal, developers agree it’s possible to pay too much for property at a DCAS auction, and say buyers should realize that financing is not automatically provided.

The city’s department of Housing Preservation and Development (HPD) programs can be a less risky route to developing property because of the number of tax incentives and government supports provided, developers say.

“DCAS has a mission to auction land for a revenue stream,” said Carol Abrams, a spokesperson for HPD. “Our mission is to develop housing as a resource for the city’s residents.”

In fiscal year 2004, HPD was responsible for 8,600 new apartments in the city, a total derived from rehabilitation and new construction.

“The Mayor wants the revenue to fill this gap in the city budget, but he also has a mandate to provide affordable housing,” said Peter Murray of Loewen Development, whose projects have included building 74 townhouses in the Ocean Hill section of Brooklyn.

Developments under HPD auspices can lower your risk, according to Murray, because of the federal low-income housing credits you receive. These credits typically last 10 years, and can practically guarantee a return on a property. They can also serve the useful purpose of being a financing tool, since banks generally will pay 90 cents on the dollar in exchange for the credits.

Working primarily in the city’s distressed and formerly distressed neighborhoods, HPD focuses on obtaining private development for residential housing at an affordable price. A slate of new housing developments have sprung up in areas such as Harlem over the past four years, including 1400 Fifth Avenue, Strivers Gardens, and the newest, Malcolm Shabazz Court on 116 Street between Lenox and Fifth Avenues.

In exchange for the incentives, developers agree to rent their units at no more than 60 percent of the area median income, a number derived from the U.S. Census results. They also must meet a rigorous process known as a Request for Proposal and Request for Qualification. About 35 developers now constitute a stable pool of companies currently creating affordable housing in the city. A rolling database of bidders is kept by HPD, which facilitates the process, said Abrams.

“In New York there is an insatiable demand for affordable housing,” said Murray. Although the cost of construction is usually very high, at about $150 per square foot, Murray contends that “it is profitable, otherwise we wouldn’t keep doing it.”

Other financial incentives provided by the city and state reduce project risk, such as state funding through the Affordable Housing Corporation, City Council funds through Article 16, and some donations through the Borough President.

The development process is also very rewarding, said Murray, who feels he has gone full circle to return to his early love of urban studies. “We see this raw property, and typically it has junk and abandoned cars on it, and several years later it is transformed. It’s a great feeling.”

The announcement by the New York Metropolitan Transportation Authority this past month that it will sell a large amount of land to finance future capital construction has the real estate community guessing about what property will be sold and for how much.

The problem is that the MTA doesn’t know either.

“We’re doing an inventory of everything there, what the value is, and what we would get if we sold it,” said Tom Kelly, a spokesperson for Peter Kalikow, MTA chairman.

Published reports have put the amount of land to be sold at $1 billion, but Kelly said the agency was still looking carefully at what unused land, right-of-ways, and land adjacent to MTA bridges and tunnels that have no real purpose could be sold.

The biggest pieces for sale will involve the rail yards along Manhattan’s West Side and land in Downtown Brooklyn for a Nets stadium, but most of the parcels will likely be small ones.

“Some of that property people may have taken as their back yards,” said Kelly. “Are we talking about 50 extra feet on both sides of an MTA property? We don’t know.”

The extent of the task is daunting. According to an MTA document, the agency “possesses billions of dollars of real estate physical assets, including over 14,000 properties, nearly one thousand stations, and over 1,000 right-of-ways, and numerous bridges and tunnels.”

As detailed in their 2003 financial report, the MTA owns $124 million of land, and $10 billion in buildings and structures, both making up well over a third of the agency’s total fixed assets.

According to a senior member of the real estate group, the MTA advertises available property in the local newspapers, such as the New York Post and New York Newsday, but there is no schedule or notification system for large-scale property disposals.

The MTA’s hottest properties are a pair of rail yards on Manhattan’s far West Side which are potential sites for a multibillion dollar sports arena and mixed use development.

While developers don’t want the tracks themselves, the air rights are expected to have hefty price tags. While the proposed Jets stadium is to be built over the western rail yards, the eastern rail yards land would be sold and used to house over 10.7 million square feet of mixed commercial, residential and cultural buildings, and a park land about the size of Bryant Park.

Once decking over the yards is completed, the eastern rail yards are estimated to yield 5.7 million square feet of development space. Currently the land is valued at $812 million, a price tag of $159 per square foot.

But this valuation has been questioned by city and state officials, who say it does not represent the number that developers will pay once the amelioration of the surrounding area has been completed. The price is more than likely to double or more after the city has completed the decking, built street improvements, added the No. 7 subway line extension and completed new commercial zoning.

Despite government wrangling, developers’ interest in the properties is strong. Once the plan moves forward, the city’s Economic Development Corporation will offer three major mixed office and residential development parcels for bid. These will be built close to the proposed park and cultural building, which would raise the value of the land.

“I would love to be involved down there, though it is too preliminary to know whether we can get the density we want,” said Peter Murray, vice president of Loewen Development, a private firm that has developed 15 properties in the city over 12 years. Zoning densities are projected with a FAR, or floor area ratio, of six and over.

A bill introduced in the New York Assembly by Speaker Sheldon Silver in July attempted to subject the MTA sale to the land-use review process that other city properties must undergo before a sale is completed. The bill would have allowed the city council, community boards and the public to weigh in on the sale of the land, but the bill has languished in the Senate and is unlikely to pass, according to city and state officials.

“Fair words never hurt the tongue.” George Chapman, seventeenth century English poet.

After a few recent instances where my colleagues’ words scorched professional earth like runaway forest fires, I find myself wishing that more of my fellow real estate brokers would take Chapman’s wise words to heart.

Allow me to share a couple of examples. While enjoying an evening out at a real estate event with a friend of mine, another colleague came over and blurted out to my friend, “I heard how you treated your ex-husband!” Needless to say, we were both shocked at this woman’s indiscreet and unprofessional outburst. Later, I found out that she got this alleged tidbit from my friend’s doorman.

At another event, also related to real estate, I heard biting words about one of our industry’s rising stars an acquaintance of mine. The verbal venom took my breath away. What dismayed me and many others in attendance was the casual ease with which others partook in what I can only describe as a conversational lynching.

What is particularly sad is that the allegations from both incidents were completely false. Yet they were said and spread as if they were the truth. Unfortunately, these two incidents are not aberrations; they are becoming more and more commonplace, and accepted, within our industry. It’s not just a lack of civility that bothers me it’s the idea that the malicious chatter of a few will discredit most of us.

“Words have the ability to create their own reality,” says Allan Schranz, who has lectured on the power and impact of language. Hurtful, spiteful words can take on a life of their own. Truthful or not, they can have a severe, devastating impact on a person’s reputation or career. According to a Gannet News Service article that quotes Schranz, “gossip can undermine workplace morale, affect productivity and lead to bottom-line problems.” Some people engage in this activity for a specific reason. “They know the consequences of their actions,” says Schranz. “For them, this is a strategic way to advance their own cause.”

We’ve all gossiped, but have we ever considered the consequences of our words? “Negative language not only reflects badly about the person you are speaking of,” says Schranz. “It also reflects poorly on you.”

Think about what’s at stake: if Broker A will say something negative about Broker B, what is he saying about you or me? Would I really want to work with or trust Broker A, knowing that he may speak negatively of me?

So what can we do? A suggestion: we need to become more verbally aware and more sensitive as to how our words may affect others. “People have to be trained to listen to themselves,” says Schranz. This can be extremely revealing. We may not like what we hear, but we can learn from it.

This business is full of talented professionals. When was the last time you offered a compliment to a colleague on his or her exceptional work? Nobody has ever resented receiving praise, says Deborah Tannen, Ph.D., the linguist and author of the book “Talking From 9 to 5.” By building up another person, you create a positive reputation for yourself, as well as creating a foundation of trust and goodwill, all of which you may need for a challenging deal that requires outside assistance.

The next time you feel the urge to gossip, stop. You may accomplish more by saying nothing at all.

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Ms. Muller is the master teacher at The Real Estate Academy

You’ve heard of the refi boom. Now get ready for the refi ripple.

Lenders nationwide reported a significant late summer mortgage refinancing revival a 21 percent surge in applications during the last week of August alone, according to the Mortgage Bankers Association of America. While most of the applicants appeared to be simply taking advantage of the nearly half-percentage point downward flutter in interest rates, a sizable minority are “cashing out” converting their inflation-fed equities into spendable dollars through larger first mortgages.

Roughly two out of five refinancers are in the cashout category, according to the latest survey data compiled by mortgage investor Freddie Mac. But among certain lenders who specialize in refinancings notably online giant Ditech.com, a General Motors subsidiary the current proportion of cashouts borders on 70 percent.

You might scratch your head and wonder: Hasn’t every homeowner who could have refinanced already done it one, two, three times or more during the past 48 months? Will the last homeowner in America who hasn’t already refinanced please turn out the lights?

Well, yes and no. Freddie Mac deputy chief economist Amy Crews Cutts says “there are still significant numbers of people out there” for whom refinancing might make sense. Roughly one in six American homeowners has a mortgage with a note rate between 7 percent and 9 percent, according to Crews. Another 33 percent have rates between 6 percent and 7 percent. One percent of all homeowners are still paying rates in excess of 9 percent.

With fixed-rate, 30-year quotes of 5.5 percent to 5.75 percent with zero or minimal points at the largest lenders, refinancing is still a live option for vast numbers of consumers. Ralph Hall, chief operating officer of GMAC Mortgage, says a substantial percentage of recent refi ripple applicants are people who bought newly constructed homes during the past year and signed up for fixed-rate loans in the mid-6 percent range, possibly through their builders’ financing subsidiaries.

Refinancing is a no-brainer for these homeowners, says Hall. Not only does a new 5.5 percent mortgage save them money every month, but “they are likely to be able to spread out the costs of refinancing over the longer term because they plan to remain in their homes.” Those costs typically include appraisals, new title insurance policies and the usual grab bag of settlement and escrow fees.

Another key category of refi ripple applicants appears to be homeowners who have an immediate need for a large chunk of cash, and who view their home as their most consumer-friendly source. Though equity lines of credit are more popular than ever, many owners find the cost of money lower and interest charges more predictable in the fixed-rate 30-year market.

Say you need $40,000 to make a down payment on a vacation home or to invest in your business. By refinancing your existing mortgage and taking out an additional $40,000, fully secured by your equity in the house, you can obtain the money you need at nearly historically low costs in the 5.5 percent to 6 percent range, depending on your credit profile.

The easiest slam-dunks in the current refi environment, however, are zero-cost deals. These are widely available from lenders and through brokers, and involve a relatively simple concept: Rather than paying for your origination and settlement charges at settlement, you finance them by including them in the interest rate on the new note. Of course, zero cost refinancings are not literally zero cost. Like all loan transactions, they come with fees. You just don’t pay for them upfront. Instead you pay for them month by month in the form of a slightly higher interest rate than you would otherwise be charged.

Say you have a $250,000 6.5 percent 30-year fixed rate mortgage. Your current monthly principal and interest payments are $1,580.18. A lender or broker in today’s market might be able to offer you a zero-cost refi at 6 percent with principal and interest payment of $1,498.88 an $81.30 per month saving, or nearly $1,000 a year. The 6 percent rate might be one-quarter of a percentage point higher than the 5.5 percent or 5.75 percent rate the lender could offer you in a traditional refi transaction, where you pay all origination and settlement fees up front.

But ask yourself: Is there some good reason not to save a thousand bucks a year? Why not refi if there’s no out-of-pocket expense?

That’s apparently what many ripple refinancers are figuring even if it’s their fourth new mortgage since the late 1990s.

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Ken Harney is a real estate columnist for The Washington Post