The Daily Dirt: David Koch and NYC’s “richest building”

David Koch lived among some of New York City’s richest residents. His co-op unit could soon hit the market. 

The death of the billionaire, who was a major funder of conservative politics and the city’s second-richest resident, has raised questions about the fate of some of his properties. Last year, he and his wife paid $40 million for a townhouse on East 76th Street and transferred ownership of his co-op unit at 740 Park Avenue to a trust. Some brokers say the co-op could hit the market once construction on the townhouse is complete, E.B. Solomont reports. 

Koch purchased the duplex in 2004 for $17 million. The building, known as the “limestone fortress,” was once home to John D. Rockefeller Jr. and a young Jacqueline Bouvier. Current residents include Ronald Lauder, the Blackstone Group’s Stephen Schwartzman, Merrill Lynch CEO John Thain and hedge fund manager J. Ezra Merkin. 

Koch’s relationship with New York City real estate has elicited attention for other reasons. According to the New York Times, Koch lived in a rent-stabilized apartment off Central Park South for 14 years. A 1986 Times article noted that he ultimately traded the apartment for a “more spacious quarters in the prestigious United Nations Plaza.” The Housing Stability and Tenant Protection Act of 2019 discarded major tools used to deregulate apartments — including vacancy and income-based decontrol —  and the elimination of the latter has led to calls for means testing in the city from landlord groups, who argue that regulated apartments aren’t going to New Yorkers who need them most. But it’d probably be more surprising if Koch rented an apartment that wasn’t rent stabilized in the 1980s. Stabilization applied to buildings with six or more units built between February 1, 1947 and December 31, 1973.  

The mayor is taking aim at hotel development. Interestingly, he recently secured the endorsement of a big hotel union for his presidential run. 

Mayor Bill de Blasio is pushing to restrict hotel development in the city by forcing such projects to go through the Uniform Land Use Review Process (the dreaded ULURP), Crain’s reports. The city already requires special permits for hotel construction in manufacturing zones. 

Back in June, the New York Hotel and Motel Trades Council threw its support behind de Blasio’s presidential campaign. The HTC has supported earlier efforts to limit hotel construction, having advocated for the special permit requirements in manufacturing zones. 

The union represents more than 40 percent of Manhattan hotels, but only covers 4 percent of hotels in Brooklyn and Queens, according to an earlier TRD analysis. While it might seem counterintuitive for a hotel union to support a measure that cuts down on hotel development, expanding special permit requirements would likely further limit hotel construction in the outerboroughs, where HTC has struggled to gain members.

What we’re thinking about next:
What the heck is going on with the U.S-China trade war? Send a note to kathryn@therealdeal.com.

CLOSING TIME
Residential: The priciest residential closing recorded on Monday was for a condo unit at 2376 Broadway on the Upper West Side, at $8.3 million.
Commercial: The most expensive commercial closing of the day was for an office building at 360 Lexington Avenue in Midtown East, at $180 million. Savanna is the buyer, and AEW Capital Management is the seller.

BREAKING GROUND
The largest new building filing was for a 35,000-square-foot residential building at 2337 Pitkin Avenue in East New York. Concern for Independent Living filed the permit application. 

NEW TO THE MARKET
The priciest residential listing to hit the market was for a condo unit at 76 11th Avenue in West Chelsea, at $3.6 million. Douglas Elliman’s Ronnie Diamonde, John Gomes, Noble Black and Madeline Hult Elghanayan have the listing. — Research by Mary Diduch

A thing we’ve learned…

Getting a refund from the city can be … an ordeal. Attorney Joshua Stein says he was accidentally charged twice for an application fee to renew his notary commission. The city sent him a list of instructions to receive his $20 back. He would need to send his personal information and a copy of the letter the city sent him acknowledging that he was owed $20… via fax machine to the County Clerk’s office. Stein says he hasn’t used a fax machine in 10 years.

“That’s kind of a microcosm of how our city government works,” he said. “It’s incredibly complicated. It’s like buying and selling the Empire State Building.” 

Top stories from our other markets:

NATIONAL
Camber Creek, a venture capital firm focused on real estate tech, is targeting $120 million for its largest fund to date. Launched in 2011, Camber Creek has raised $50 million to date — including an initial $20 million fund and a $30 million second fund in 2017. The company filed paperwork for its latest capital raise with the U.S. Securities and Exchange Commission last month.

CHICAGO
The luxury market in Chicago continues to be propelled by Downtown condo sales. Last week’s five most expensive home sales all came from condo buildings in the central business district. Through three weeks in August, only one in 15 of the most expensive home sales was for a single-family home.

LOS ANGELES
Seven months after Beijing-based Oceanwide Holdings Company halted work at its three-tower $1 billion megadevelopment in Downtown, U.S-China trade relations have only worsened. While some local industry pros believe the project — which topped out in 2018 — will restart soon, others say the trade war coupled with the $100 million in liens Oceanwide has accrued have dealt it a death blow.

MIAMI
South Florida hotel occupancy rates fell slightly in the first half of the year as the supply of rooms increased faster than bookings. Research by hotel industry monitor STR shows the tri-county inventory of South Florida hotel rooms increased by 3,668 in the first half, but revenue per available room was lower than last year. — Compiled by Alexi Friedman