The Real Deal New York

Cover artwork by Squat DesignIn its eight years of publication, The Real Deal has covered the real estate industry in a city that’s been transformed by a massive building boom, was crippled by the subsequent bust, and is now in the midst of a tentative recovery. The compendium of stories we’ve written runs the gamut from the record-setting building and apartment purchases during the boom, to the toppling of mega-developers during the bust, to new entrepreneurs trying to get into the real estate game during today’s fragile recovery. This month, for the anniversary of our 100th issue, we bring you some of the most compelling stories we’ve tracked in these pages, many of which have unfolded and evolved over time, much as the magazine itself has.

Click here to flip through a Flash version of TRD’s September issue.

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Clockwise from top left: World Trade Center site, Port Authority Bus Terminal, South Street Seaport, Hudson Yards, World Financial Center and Farley PostOffice/Moynihan Station

“Mall” has been a four-letter word in the Manhattan retail world for some time now. Despite that, Manhattan property owners have begun to — or are planning to — rehab and build a historic amount of large-scale retail over the next few years. Currently, developers such as the Westfield Group, Brookfield Properties, the Related Companies and Vornado Realty Trust have more than 2.5 million square feet of retail space under construction, or at least on the drawing board, in mall-like projects south of 59th Street. If all of what’s planned gets built, it would be the greatest amount of large-scale retail space ever delivered in Manhattan during a five- or six-year period, a review of prior development by The Real Deal shows. [more]

Illustration by David ColeJuly 27 was a dark day for commercial mortgage-backed securities, or CMBS. On that day, Goldman Sachs and Citigroup were set to begin selling a $1.5 billion batch of CMBS, secured in part by some New York City properties. [more]

Brothers Meyer Chetrit, left, and Joseph ChetritTongues wagged in the real estate industry when news broke that the Chetrit Group — one of the city’s most prominent investment firms — had split in two. Brothers Joseph and Meyer Chetrit would be relocating from the company’s longtime headquarters at 404 Fifth Avenue into offices at 512 Seventh Avenue, Real Estate Alert reported in June. Meanwhile, their two younger brothers, Jacob and Juda, would continue working out of the Fifth Avenue office, but operate under the name of Chetrit Organization. Or would they? [more]

1212 Fifth AvenueWhen the stock market is plummeting and panicked investors are pouring money into gold, it would seem a less-than-prudent moment to predict the next cycle of new residential development in New York City. But despite the economic turmoil, some New York City developers and their consultants are holding fast to the theory that the increasing demand for living space in the city means that it’s a good time to bet on new residential buildings. [more]

Larry SilversteinJust over 10 years ago, Larry Silverstein, president and CEO of Silverstein Properties, closed on the then-largest real estate transaction in the city’s history: a $3.25 billion, 99-year leasehold on the Port Authority’s 10.6 million-square-foot World Trade Center site. Seven weeks later, the buildings were destroyed in the Sept. 11 terrorist attacks, and Silverstein has spent the better part of the past decade focused on the rebuilding. His 52-story, 7 World Trade Center office tower is now more than 90 percent leased, while the 72-story, 4 World Trade Center is scheduled to open next, in 2013. [more]

When you have a baby, you are afraid they are going to get into your medicine cabinet or accidentally roll off the bed. You have to keep a close watch. Even when that baby grows up, as a parent you are still afraid they’re going to get hurt. That’s the way I feel about my one-year-old daughter, Sophie, and it’s also the way I feel about The Real Deal. Even though it’s reaching a milestone moment this month with its 100th issue, I still worry about the stray typo or flat headline that is going to jeopardize the magazine’s survival and consign it to the dustbin for readers. [more]

August in New York City is usually a sleepy time, with offices empty by noon on Fridays and co-op boards disbanded for the summer. Last month, however, was anything but quiet. After a bruising political battle over the debt ceiling, the U.S. saw its AAA credit rating downgraded by Standard & Poor’s for the first time in history, prompting the stock market to plummet. If that weren’t enough, the city — already bracing for the 10-year anniversary of the Sept. 11 terrorist attacks — suffered an earthquake and a hurricane. In the same week. [more]

In 2009, the landscape was bleak for New York City real estate lawyers. Many of the big firms tried shifting people between departments to deal with the slowdown in real estate business caused by the economic downturn. Then, they let people go through attrition, and even outright layoffs. But it still wasn’t enough, lawyers said. “When we were at our smallest, we still weren’t as busy as we’d like to be,” said Robert Ivanhoe, chairman of the New York office and the global real estate practice at Greenberg Traurig. “Even after the downsizing, we weren’t at capacity.” [more]

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The Manhattan office leasing market tightened last month even as the unpredictable stock market and stalled national economy unsettled landlords and tenants alike. Landlords, who have seen their leverage strengthen over the past year, lost a bit of confidence because of the new round of economic turmoil, some Manhattan brokers said. [more]

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Attorney General Eric SchneidermanWhen New York State Attorney General Eric Schneiderman took office earlier this year, some critics feared he would do more ideological grandstanding than consumer protection and reform. After eight months on the job, the former Democratic state senator (and ex-deputy sheriff) appears to be winning over some skeptics while enraging others. The relatively low-profile Schneiderman exploded into the national spotlight last month when he filed a last-minute motion to block a proposed $8.5 billion settlement between Bank of America and investors in 530 New York trusts represented by Bank of New York Mellon. [more]

Leslie Siben of JDF RealtyForget the Tea Room. There’s a new wave of Russian restaurants coming to Manhattan, driven by economic and political uncertainty in Europe, a weak U.S. dollar, and the allure of New York’s high-profile restaurant scene. With long-term leases and multimillion-dollar renovation budgets, more and more Russians are saying “da” to New York. [more]

“More people [are] coming from creative industries… For them, full service is less important.”

In Manhattan, a doorman is a marker of luxury and status. But as rents rise in a tough economy, tenants are increasingly willing to go without that friendly face to screen visitors and accept packages if it means staying in New York’s most exclusive borough, industry experts said. Data shows that the premium that renters are willing to pay for doormen has shrunk dramatically in the past two years. Between 2010 and mid-year 2011, the premium for rental apartments in buildings with attended lobbies dropped 36 percent for studios, 21 percent for one-bedrooms and 18 percent for two-bedrooms, according to a market report compiled by real estate consulting firm and brokerage Nancy Packes Inc., in collaboration with StreetEasy. [more]

Home energy efficiency and sustainability have been major policy priorities for the Obama administration, but lurking in the background are two consistent, pesky questions: Beyond the documentable savings on utilities bills, do such steps add to the resale value of a home? And do they make it easier or faster to sell property? Comments

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Richmond County Bank Ballpark

Staten Island trades parking lot for new project

The city last month announced a plan to redevelop two parcels of land on Staten Island’s St. George waterfront. The city-owned, 14-acre site is currently used as a parking lot for the Richmond County Bank Ballpark, home of the Staten Island Yankees. The city has asked developers to submit proposals for the site, and said it will choose one based on its potential for positive economic impact, job creation and waterfront improvement. Developers will also have to make up for the lost parking space for the ballpark. Proposals are due Nov. 10. Comments

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World Trade Center siteConstruction crews have been working feverishly at the World Trade Center site in anticipation of the 10th anniversary of the Sept. 11 attacks later this month. But when families and friends of the victims gather there for the commemorative ceremony and the opening of the National September 11 Memorial, they will also see major progress at many of the buildings around them. [more]

With a new Shake Shack in Grand Central, Five Guys all over Midtown and BareBurger in Park Slope and Astoria, the city’s ongoing burger boom is showing no signs of slowing down. But New York only has room for so many burger joints. So which of the many new options are winning over New Yorkers’ stomachs? Volume-wise, the clear winner is Five Guys Burgers and Fries, which has spread like wildfire over the past few years. Founded in Virginia in 1986, Five Guys was the fastest-growing restaurant chain nationally in 2010, according to Technomic, a market research firm. It currently has nine locations in Manhattan and Brooklyn, and is expected to open 12 to 20 new locations in the area over the next year, according to Andrew Moger, the CEO of Branded Concept Development, a design and construction firm that has worked with Five Guys. [more]

The real estate market may be cyclical, but a look at the future of new development in New York suggests that the city isn’t in for a second condo boom — at least not yet. Recent headlines give the impression that the city is being hit by a wave of pricey new mega-condo projects. Here’s a sampling: “Penthouses at Extell’s One 57 ask $98.5 million”; “CIM to begin work at Drake Hotel site”; “Nouvel’s MoMA tower is back before city”; and “Two St. Vincent’s sites enter public review.”But many of the headline-worthy projects in the so-called pipeline are still several years off. And while there are projects in the more immediate pipeline, there are far fewer than there were even last year at this time. [more]

Alchemy Properties’ Kenneth Horn at his under-construction 57-unit condo at 15th Street and Fifth AvenueAt the height of the boom, The Real Deal often wrote of the developers of massive condominium towers one-upping each other with newer, bigger buildings and the next best over-the-top amenity. At Midtown’s 220-unit Platinum, there was the golf simulator and the massage room. At the 258-unit Riverhouse in Battery Park City, there was the pet spa. And at the Financial District’s 319-unit William Beaver House, basketball and squash courts, a hot tub and an outdoor shower were all part of the original attempts to woo buyers.

Click here to flip through a Flash version of TRD’s September issue.

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Over the summer, New York City crossed the three-quarters mark on the way to Mayor Michael Bloomberg’s goal of churning out 165,000 units of affordable housing by 2014. In his announcement of the milestone, the mayor boasted that the number of New Yorkers ultimately benefiting from the plan will exceed the total population of Miami. Of course, Bloomberg has never been short of lofty ambitions. But he picked a challenging time to wager a piece of his legacy on real estate development. [more]

After a rocky few years during the downturn, New York City condo conversions are starting to make a comeback, and some of the city’s marquee developers are getting in on the action. Conversions are currently underway in Harlem, the Upper East Side, Times Square, Dumbo, the Lower East Side and Brooklyn Heights, to name a few neighborhoods. And several of those plans have been solidified over the past six months, adding a new sheen to the condo market that for the past several years appeared to be in a state of self-induced penance. [more]

Rudolph Giuliani1994: Giuliani launches program to sell foreclosed rental buildings

1963: REBNY follows Better Business Bureau in first-ever room-count standards

1937: Nation’s largest low-income housing project opens in Brooklyn
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For better or for worse, there are few places in Manhattan that have changed, or are changing, more radically than Astor Place. A mere 10 years ago, this intersection of Saint Marks Place and the Bowery was, architecturally speaking, a fairly quiet place that had not seen any noteworthy activity in over a generation. Change came in 2005 with Gwathmey Siegel’s winsome and silvery residential tower at 445 Lafayette Street, as well as, more recently, the Cooper Union academic building designed by Thom Mayne of the Los Angeles-based firm Morphosis. [more]

From left: Nicholas Ricci, Daniel Kozlov, Eric Liftin, Mark Martinez, Paul Barnla, Robert Didier and Justin Korhammer

New York City homeowners are doing far fewer gut renovations than in the past. Instead, many are opting for cheaper cosmetic upgrades like refinishing floors, installing new appliances and replacing countertops. In this month’s Q&A, The Real Deal talked to residential contractors and architects about what kind of activity they’re seeing in the home renovation business in the city, given the touch-and-go economy. Many said that while the wealthiest of clients are still breaking down walls, most others are sticking to kitchens, bathrooms and surface-level fixes. The one exception is for price-conscious young families that are leaving Manhattan for cheaper, farther-flung neighborhoods in Brooklyn and Queens, where they’re buying old, dilapidated homes and buildings as fixer-uppers.

Click here to flip through a Flash version of TRD’s September issue.

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A rendering of ESPN’s Digital Center 2 The state of Connecticut is loaning sports giant ESPN $17.5 million to construct a 193,000-square-foot production facility on the company’s Bristol campus. Ground broke on the so-called Digital Center 2, the future home of SportsCenter broadcasts, early last month. The facility is expected to open in 2014. When complete, it will be the largest of the company’s 19 Bristol buildings, according to the New London Day. In total, the state will invest up to $25 million in ESPN, with additional funding going toward job training and tax exemptions to help with the purchase of equipment and construction materials. [more]

The San Francisco skyline

San Francisco

San Francisco Bay Area sales dropped in July, as economic uncertainty kept nervous buyers out of the market, the San Francisco Chronicle reported last month. Throughout the nine Bay Area counties, the median price paid for an existing single-family house was $400,000, down 7.5 percent from the same month of last year, according to DataQuick, a San Diego real estate research firm. A total of 5,096 homes changed hands, roughly the same as in July 2010. Bank sales of foreclosed homes accounted for 26.6 percent of Bay Area resales in July, and short sales represented 18.8 percent. [more]

3915 Broadway

Uptown multifamily portfolio on the market

The mortgage note secured by eight prewar apartment buildings in Upper Manhattan is on the market for $70 million. Combining for 460 apartments and 25,000 square feet of retail space, the properties are located at 3885 Broadway, 4455 Broadway, 3915 Broadway, 3900 Broadway, 80 and 86 Fort Washington Avenue, 66-72 Fort Washington Avenue and 884 Riverside Drive. Seven of the buildings are located within a few blocks of each other between 160th and 164th streets. Eastern Consolidated is handling the sale on behalf of the special servicer. [more]

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Click here to try your hand at an interactive version of The Real Deal’s September 2011 crossword puzzle. Comments

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Murano at 519 Borden Avenue

Sales update

Harlem

2130 ACP
2130 Adam Clayton Powell Jr. Boulevard

Sales have relaunched at Cogswell Realty’s seven-story, 46-unit condo. The developer initially began preselling units in 2008, but suspended sales until construction was complete. The building, which is ready for immediate occupancy, has studios and one-, two- and three-bedroom units ranging in size from 533 to 1,508 square feet. Prices start at $289,000 and go up to $949,000. Amenities include a club room, fitness center and part-time attended lobby and virtual concierge. (note: correction appended) Many of the units also have balconies and terraces. Halstead Property Development Marketing is the agent. Contact: www.2130acp.com. [more]

35 Park Avenue

Murray Hill

$555,000

35 Park Avenue

1-bedroom, 1-bath, 800 sf co-op; doorman, live-in superintendent; hardwood floors and custom electronic blinds; five spacious closets and building storage; Sub-Zero refrigerator; garage and laundry; maintenance $959; 50 percent tax-deductible; asking price $600,000; 40 weeks on the market. (Brokers: Wendy Stark, Corcoran; Frank Seegitz, Bond New York) [more]

From left: Robert Morgenstern and Sabrina Kleier-MorgensternLong-time friends Robert Morgenstern and Jeffrey Kaye had often thought about
leaving their respective jobs and going into business together. Morgenstern, a real estate
broker, and Kaye, a vice president at the Gotham Organization, dreamed of starting a real
estate investment firm, and as 2010 drew to a close, they felt the time was right. [more]

Shamah Properties, a Brooklyn-based boutique real estate firm, has launched a $50 million investment fund to acquire multifamily properties in New York City. Founded in 1980, Shamah currently owns 13 properties, largely in Flatbush, Crown Heights and Prospect Heights. But lately, the company has been expanding its portfolio, according to CEO Alan Shamah, who said he is looking for cash-flow-positive, rent-stabilized buildings with potential upside that can be realized through interior improvements and repairs. In July, the firm closed on the $8.05 million purchase of an 80-unit apartment building at 1082 President Street in Crown Heights, and it is in contract to buy a 44-unit building at 1553 Ocean Avenue in Flatbush for an undisclosed price. [more]

Josh GubermanCore Development Group CEO Josh Guberman and Shaun Osher, founder of the brokerage Core, have a running, if obvious, joke: Who used the “Core” moniker first? The banter started several years ago, while the two were working together on Guberman’s last Manhattan development, Lux 74. But the joke has become less funny recently as the confusion between the two firms has grown. So Guberman, who will soon be marketing a new Hamptons project, has changed his company’s name to the Guberman Group. “Shaun runs a marketing brand, and I build buildings,” said Guberman, who has been a developer in New York City for 15 years. He said he initially chose the name “Core” because he liked its strong connotation, but with both firms working hard to build their brands, the confusion was getting in the way. [more]

Soleil Moon Frye as Punky Brewster and at the Azure book reading

Real estate events don’t usually involve glitter and tiaras. Then again, they don’t usually involve Soleil Moon Frye, the actress best known for playing a spunky foster child on the ’80s sitcom “Punky Brewster,” either. On a Thursday night last month, Frye celebrated the launch of her new parenting book, “Happy Chaos,” in a four-bedroom model apartment at Azure, a new condo at 333 East 91st Street. Organized by Divalysscious Moms, a networking group for New York mothers, the event featured glitter-sprinkled cupcakes and tiara-embroidered pillows. Frye, now a children’s clothing designer and mother to seven-year-old Poet, talked diapers and Dolce, read from her book, and signed copies for the stylishly attired New York moms in attendance. [more]

This ain’t no beauty contest. Or is it? Editors at the real estate website Curbed decided to spice up the news-poor days of summer by running a “hot brokers” contest, which pitted 32 male and female brokers against each other based solely on their looks. Competitors were picked by readers in a poll. The contest, concluded late last month, invited readers to vote for their favorites. Brokers had varied reactions to being included. Corcoran Group salesperson Gavin Hammon (who made it to the final round) said he was “honored.” “Repulsed and exhilarated” were the words Nest Seekers’ Ryan Serhant (out after round 2) used to describe his mixed feelings about being nominated. Serhant added that he eventually voted for his competition. “A broker should never get more publicity than the property,” he said. [more]

Colombian drug lord Pablo Escobar once owned a heard of hippos

This summer, real estate broker Amelia Gewirtz snail-mailed a thick sheath of papers to everyone on her contact list, including all of her former clients. But the missive wasn’t a market report. In fact, it wasn’t real estate-related at all — it was a printed list of free upcoming New York City events. “Life can be hard, and I want to pass something on that makes me smile,” said Gewirtz, a Halstead Property executive vice president, who last year sent out a sample of music from the band she sings in, “Parents with Angst.” Real estate brokers know it’s crucial to maintain strong client relationships, and in the past, many kept in touch by sending out market reports or the occasional postcard. [more]