As the top two office leasing firms in the Big Apple, CBRE and Cushman & Wakefield are no strangers to competition. But it was their collaboration that earned them the industry’s top prize for ingenious deal making Tuesday night.
Cushman & Wakefield’s Jonathan Serko and CBRE’s Mary Ann Tighe and Ken Meyerson took home the Real Estate Board of New York’s Henry Hart Rice Achievement Award for their work to relocate the health care union 1199SEIU and its benefit funds to George Comfort & Sons’ 498 Seventh Ave. This is Serko’s first Deal of the Year win and Meyerson’s second, while the award takes Tighe’s haul up to nine.
“It’s not hard to appreciate the challenge of serving two indivisible clients – a union and its fund – in two separate locations to seek advice from two competing firms to help address each’s evolving and varied space needs,” said Woody Helller, co-chair of REBNY’s sales broker committee, explained at the trade group’s 74th annual awards ceremony at Club 101 on Park Avenue.
Cushman and CBRE’s “shotgun wedding” started to look like a dysfunctional marriage when the union and fund began to take divergent paths with regard to staying put and relocating, Heller said.
“The brokers came up with a suggestion of how to break through a logjam: Insert an impartial third party that was real-estate literate and sympathetic to the fund, union and its collective membership,” Heller explained.
That impartial third party turned out to be Bruce Ratner, who extolled the benefits of 498 Seventh Avenue: multiple entrances, two distinct sets of elevators, below-grade parking and well-capitalized and experienced ownership.
“In the end, the brokers’ solution resulted in a new 580,000-square-foot, 30-year lease that created a building within a building at 498 Seventh Avenue,” Heller said. “Further, it saved their respective clients $400 million compared to the costs of their existing locations and finally created one consolidated location for the 400,000 members of the 1199 union and the fund.”
REBNY’s second-place prize, the Robert T. Lawrence Memorial Award, went to Mark Weiss and Richard Bernstein of Cushman, who negotiated the purchase of a 67,000-square-foot condo at Silverstein Properties and the Elad Group’s One West End that will serve as a dormitory for Touro College’s Lander College for Women.
One of the keys to the deal was for the brokers to convince the owner of the retail condo below, the grocery store Morton Wiliams, to allow Touro to run drainage pipes for plumping through their space.
Weiss and Bernstein did so by convincing the grocer that having Touro upstairs would be a boon to its business.
“They could expand their high-margin kosher food department to serve the orthodox community that would be moving into the dormitory space above. Morton Williams would thereby increase the profitability of the store and thereby de-risk the retail-condo acquisition,” Heller said.
The deal took years to complete and led Newman and Eichner to knock on the door of a neighboring property owner who was concerned that if he agreed to a density transfer, the city might come looking around and uncover building violations that would lead to fines.
“The creation of this deal required six years to complete the assemblage, the purchase of two buildings, eight air-rights purchases, numerous residential tenant buyouts, the buyout of two restaurants, the creation of a 250,000-square-foot low-income housing project and – my favorite – a personal assurance letter from the Department of Buildings,” Heller recapped.