Web hits: The month in review

Chelsea’s Milan goes from rental to condo back to rental

The Milan Condo on 23rd Street in Chelsea is going to need a new name. Joining the ranks of New York City’s many “nondos,” the 42-unit conversion will remain a rental building rather than going condominium as planned.

The Milan, which hit the market in June 2008, failed to sell enough units in time for its condo offering plan to be declared effective, according to Douglas Wagner, president of Benjamin James Real Estate, the exclusive marketing and sales agent at the building. Instead, the now-vacant units will be leased out, said Wagner, whose company has already started marketing rentals there.

The credit crisis and stringent lending requirements have stalled sales for new condo projects all over the city. Still, the Milan’s situation is rare because it’s one of only a few residential conversions, which have a time limit for declaring the offering plan effective, unlike new-construction condos, according to real estate lawyer Meg Goble, a partner at Hanley & Goble, who is not involved with the building.

Located at 120 West 23rd Street between Sixth and Seventh avenues, the Milan was constructed as a rental building in 1987. The owner, Manhattan-based Milan Associates, has since renovated the building with condo-quality finishes, like hardwood floors, sandstone tiles and mahogany cabinetry. The asking price of a 575-square-foot junior one-bedroom there was $515,000, according to Streeteasy.com, while a two-bedroom, two-bath unit was priced at $1.285 million.

Now, one-bedrooms in the vacant doorman building, where each apartment has a balcony, rent for $2,700, Wagner said, while two-bedroom units start at $4,100.
By Candace Taylor

Independent broker sues Massey Knakal for unpaid commissions

An independent broker is suing investment sales brokerage Massey Knakal Realty Services for nearly $200,000 in commission fees for a 66-unit Queens apartment building sold in 2006.

S. David Jagarnauth is seeking $184,000 plus interest from Massey Knakal for the buyer’s commission on the $12 million sale of 44-30 Macnish Street in Elmhurst, Queens, in September 2006, a complaint filed July 2 in New York State Supreme Court said.

The lawsuit, with charges including breach of contract and unjust enrichment, comes three years after the sale closed. Jagarnauth’s attorney, John Desiderio of law firm Adam Leitman Bailey, said the broker tried for two years to obtain the payment through phone calls and letters, but was rebuffed.

Paul Massey, CEO of Massey Knakal, said the money has been put aside and conceded a commission needed to be paid. He said the confusion was over who was owed the commission and whether Jagarnauth was a licensed broker. It is illegal to pay a brokerage fee to an unlicensed broker.

“From the outset we suspected we owed someone a brokerage fee related to this transaction. We have set aside the money, but there are many questions of fact related to who the buyer was and who the broker was and we hope to resolve those expeditiously,” Massey said. He said the parties were attempting to reach a settlement last month.

Jagarnauth was included as the co-broker in a 2003 contract of sale for the property but that contract was abandoned. His name was improperly removed from the 2006 sale contract that was ultimately used in the sale, the complaint said.

A person named Sookdeo Jagarnauth was first licensed as a broker in 2003 and is currently licensed, according to the state Department of State. Desiderio said Jagarnauth is a licensed broker. By Adam Pincus

Bruce Willis, wife scope out apartments in the Apthorp

The celebrity buzz around the Apthorp continues. Bruce Willis and his new bride, 31-year-old model and actress Emma Heming, checked out apartments in the iconic Upper West Side condominium conversion last month, sources confirmed.

Willis, 54, and Heming, who wed in March in Turks and Caicos, looked at the 101-year-old building’s interior garden courtyard and units, the sources said.

After a recent price reduction, apartments in the building start at $1.535 million, with the developers under a deadline to sell at least 25 apartments before September so the condo plan can be declared effective.

The “Die Hard” star, who has three children from his previous marriage to Demi Moore and divides his time between New York and Los Angeles, is no stranger to the Upper West Side. In 2007, he purchased a 2,318-square-foot Trump Place apartment at 220 Riverside Boulevard at 70th Street for $4.26 million.

Prior to that, he reportedly rented an apartment in the Trump International on Central Park West at a cost of $55,000 per month while working on the film “Perfect Stranger,” which also featured Heming. By Candace Taylor

Former CBHK agents leave Realogy nest, join competition

In the wake of Coldwell Banker Hunt Kennedy’s closure, many of the firm’s former agents have joined the competition rather than staying within the Realogy family.

Halstead Property nabbed 27 former CBHK agents, while its sister company, Brown Harris Stevens, hired four, according to spokespeople at the two companies. Meanwhile, Prudential Douglas Elliman snagged 22 agents from the independently owned Coldwell Banker franchise, founded in 1988. Charles Rutenberg Realty in New York also hired several agents.

That alone represents roughly a quarter of the agents at CBHK, which had 214 agents at the time it closed. That means that at most, only 73 percent of CBHK’s agents went to Realogy brands the Corcoran Group and Sotheby’s International Realty.

That’s far fewer than the percentage quoted by co-founder David Michonski, CBHK’s former CEO, who told The Real Deal as the firm prepared to close that agents were encouraged to go to Corcoran or Sotheby’s, and that “90 percent” would do so.

Corcoran and Sotheby’s are owned by NRT, a subsidiary of New Jersey-based Realogy, which operates Coldwell Banker franchises.

The percentage of former CBHK agents that stayed within Realogy could be even less, since it’s unknown how many agents left the business or went to smaller firms like Bond New York, Warburg Realty or Bellmarc Realty.

Residential firms Century 21 NY Metro, Core Group Marketing and Barak Realty confirmed that they have not hired any former CBHK agents, while the heads of Bond, Warburg and Bellmarc Realty did not respond to requests for comment. By Candace Taylor

Hamptons home sees $3 million price increase

Even as the Hamptons real estate market seems to be trending downward, a Southampton property returned to the market last month with a nearly $3 million price increase in the space of one month. The 2,750-square-foot property, at 450 Gin Lane, is on the market for $19.9 million. Harald Grant of Sotheby’s International Realty has the exclusive listing for the four-bedroom, five-bath property with views of the ocean and Old Town Pond, according to Streeteasy.com.

Grant called the $19.9 million price “ambitious.” But in this market, he said, “people are going to put in for what they think it’s worth anyway.”

The property was originally listed in June with Prudential Douglas Elliman for $17 million. The price was increased by 17 percent at the end of June before being relisted with Sotheby’s. According to the listing, the property has room to build a bigger 12,000-square-foot home. TRD

Manhattan mixed-use property values fall by half

A buyer could get twice as much mixed-use space in Manhattan in the first half of 2009 than in the same period the year earlier, according to a new citywide mid-year report from commercial sales firm Massey Knakal Realty Services.

The prices for mixed-use properties fell 53 percent to $535 per square foot from $1,135 per square foot in the first half of 2008, the firm’s data show.

The dramatic reduction highlights the changes in the market from a year earlier as credit tightened and the economy weakened.

Overall sales in the first six months of the year in Manhattan in all categories of buildings priced higher than $500,000 were down 82 percent to $1.9 billion, from $11 billion in 2008, and $30.8 billion in 2007, the firm reported. The transaction volume fell 74 percent from the first half of 2008 to 95 sales, totaling 122 buildings.

Company Chairman Robert Knakal said he expected prices would continue to fall even as the number of transactions increased.

“Even with a significant increase in volume, we expect prices to continue to drop as fundamentals deteriorate, caused by continuing increases in unemployment,” he said in a statement.

In Manhattan, the 15 mixed-use sales in the first half of the year included 81 Baxter Street, which sold for $3.57 million, and 102 Charles Street with a sales price of $6.5 million, city records show.

In other segments of the Manhattan market, the price of multi-family walk-up apartment sales fell 17 percent to $494 per square foot in 2009 from $599 per square foot in the same period in 2008, and elevator building prices fell to $468 per square foot from $532 per foot last year, the company reported.

In northern Manhattan and the outer boroughs, walk-up prices fell as much as 41 percent. In Northern Manhattan, which last year had the top price per square foot for multi-family walk-up buildings, prices dropped 41 percent, to $124 per square foot, from $211 per foot.

Queens, which now has the most expensive walk-up prices in the outer boroughs, saw prices decline 13 percent, the smallest percentage drop in the city. The sale prices fell to $176 per square foot this year from $204 per square foot in the first half of 2008, the Massey Knakal figures show.

Prices for walk-up apartment buildings in Brooklyn fell 18 percent to $148 per square foot, while in the Bronx they dropped 23 percent to $76 per square foot. By Adam Pincus

Intuit exec’s ex-wife pays $17.5 million at 15 CPW

The ex-wife of the chairman of the board of software giant Intuit recently bought a four-bedroom apartment at 15 Central Park West for $17.5 million, about $3 million more than the seller paid for the condominium 16 months earlier.

Roberta Campbell, formerly married to William Campbell, current chairman of the board and former CEO of the California-based company, is the only buyer named on the purchase, which closed July 15, according to city property records made public last month.

There was no mortgage filed for the 11th-floor unit in the House building of the development, indicating the purchase was all cash.

Campbell bought the 3,840-square-foot unit, with views to the east and west, from Paula Lascano, who paid $14.2 million in March 2008 for the sponsor unit.

Lascano first put the apartment on the market in April 2008 for $22.95 million, and its price was cut five times to $18.5 million in March 2009, before going into contract in May, data from Streeteasy.com show. By Adam Pincus