What to watch in 2012

A roundup of developers, brokers, listings, projects, REITs and more to keep an eye on in NYC real estate this year

Last month The Real Deal spoke with real estate professionals to learn which projects and players will be on their radar in the year ahead. After dozens of interviews, hours of research and many editorial meetings, we winnowed down a list of real estate players and projects to watch in 2012. We weren’t looking for the city’s top brokers, or the biggest firms or the most successful developments. Instead, we were looking for the most interesting newcomers who are already making a splash, or the veterans putting their expertise to use in a different way. We looked at the developments that have the power to change a neighborhood — or demonstrate the folly of hubris. We looked at the new alliances that will be tested in the coming year, and the investors who have money to plow into property in the upcoming months.

In short, we zeroed in on those who are embarking on uncharted territory this year. For one reason or another, every entry on this list will be worth a look in 2012.

Ground-up condos

Extell Development Company’s One57 is capturing all kinds of attention between its record-breaking 90-story height, audaciously priced $110 million penthouse, and its promise of luxury to rival the city’s glitziest residences. The question, however, is whether Extell can deliver such opulence — and find buyers.

The answer to that — which could come to light this year as the company starts up sales in earnest — could sway the luxury market across Manhattan, sources say.

At the same time, the overall lack of new luxury inventory is keeping everyone’s eyes on the relatively few new condo projects out there in 2012. Take Toll Brothers’s the Touraine at 132 East 65th Street: 18 of the 22 units have gone into contract since sales started in early October, according to David Von Spreckelsen, a senior vice president at the company.

Prices are averaging about $2,700 per square foot, Von Spreckelsen said. He anticipates buyers will move in at the end of 2012.

It’s a similar story at 250 West, the onetime fruit-and-vegetable warehouse in Tribeca that the El-Ad Group began converting into 106 condos in June. With more than a third of the units sold or under contract, Richard Cantor (principal of Cantor Pecorella, which is handling the building’s marketing) expects it to sell out by the end of 2012 if the current pace continues.

Units are on sale for about $1,500 per square foot on average, but Cantor said the team has increased prices seven times already, and anticipates future price hikes.

Meanwhile, the Brodsky Organization’s planned 19-story building at 135 East 79th Street may also go some way toward meeting the demand for luxury condos, although sales won’t start until late 2012 at the earliest. Brodsky reportedly secured a $120 million construction loan in November, and groundbreaking on the 30 residences, primarily three- to five-bedrooms, is set for this month.

A block further east, at 200 East 79th Street, the Wilf family’s Skyline Developers is finally making way on a condo that, city records show, will rise to 19 stories on a site the company began assembling as early as 2005.

Though Skyline project manager Jonathan Wilf remained tight-lipped about details, he said the attorney general’s office recently gave the green light to Skyline to begin preliminary marketing for the project in advance of approving the offering plan.

Skyline has tapped Alexa Lambert of Stribling & Associates to handle marketing, and has lined up construction financing, Wilf said.

Residential Conversions

Will the Salvation Army’s ladies dorm at 18 Gramercy Park South become Downtown’s 15 Central Park West?

No doubt that’s what developer William Lie Zeckendorf and architect Robert A.M. Stern are hoping. The pair, who famously collaborated on the actual 15 Central Park West, is teaming up once again, to transform the landmarked 17-story parkfront property into luxury condos.

Construction is well underway and is estimated to cost $14.4 million (in addition to the $60 million they paid for the site), according to city records. No word on exactly when the units will hit the market, however, and Zeckendorf did not respond to calls seeking comment.

Meanwhile, Extell is also converting the Helmsley Carlton House, a former hotel at 680 Madison Avenue, into 68 apartments. Though an Extell spokesperson said details are not finalized, the site is ready for construction, and the developer recently hired Manhattan-based commercial leasing brokerage Isaacs and Company to start shopping 32,000 square feet of retail space slotted for the lower two levels.

“[Extell founder] Gary Barnett is going to be one of the bellwethers of … super high-end luxury [in 2012],” said Andrew Gerringer, managing director of new business development at the Marketing Directors, a brokerage that specializes in new development.

At 150 Charles Street in the West Village, Prudential Douglas Elliman superbrokers Leonard Steinberg, Raphael De Niro and Darren Sukenik will be joining forces to market 98 condos the Witkoff Group is constructing around the existing façade of the former Whitehall Storage building. Pricing hasn’t been released, but it is said to match the nearby Superior Ink, where condos have sold at an average of $3,128 per square foot, according to real estate listings website StreetEasy. (Steinberg said the brokers could not comment, and Witkoff did not respond to requests for comment.)

The West Village is also home to the 184-unit Printing House at 421 Hudson Street, which a group of investors, led by Belvedere Capital, acquired in 2011. Plans call for converting 105 existing rental units to condos. Units will likely go on sale by mid-2012, according to Kelly Kennedy Mack, president of Corcoran Sunshine Marketing Group, which is marketing the project.

Also noteworthy: Harry Macklowe’s conversion of the 105-unit rental building at 737 Park Avenue to condos. Macklowe plans to spend $107 million to reposition the building, and filed suit in September seeking to evict a couple who allegedly wanted to stay put after their lease expired.

Rental developments

While New York by Gehry, the 76-story rental tower at 8 Spruce Street, is 65 percent leased, the remaining 200-odd units will hit the market this year — possibly as early as next month. The project’s backers expect all 903 of the units to be rented out by fall 2012.

But developer Forest City Ratner is making one adjustment, combining eight units on the top floor into three penthouses ranging from 3,000 to 4,000 square feet — priced between $45,000 to $60,000 per month. “They were nice,” Forest City executive Susi Yu said of the scrapped apartments, “but not up to the standards of these units that we are creating.”

Further north, David Picket’s Gotham Organization broke ground on its massive Gotham West project — a $520 million, four-building complex between West 44th and West 45th streets and 10th and 11th avenues with 1,240 rental units — in October. It’s been described as the largest new construction project underway in Manhattan.

On a smaller scale, Toll Brothers and Equity Residential paid $134 million for a former parking lot at 400 Park Avenue South, with plans to erect a 40-story rental-condo hybrid on the property, which comes with 400,000 square feet of development rights. Equity Residential, headed by Sam Zell, will own and operate the lower 22 floors, with 265 rental apartments, while Toll’s upper floors will house 100 condo units.

Meanwhile, Jeffrey Levine’s Douglaston Development, the firm behind the Edge condos, is planning another massive Williamsburg project, this time at the site once set aside for the third Northside Piers tower. Unlike the Edge and Northside Piers developments —which once competed for a shrinking pool of buyers but are now mostly sold — the new tower will reportedly contain 500 apartments for rent, testing the rental market even as the North Brooklyn condo glut burns off. Douglaston will work with Toll Brothers’s former partners at the site, L+M Development Partners and RD Management, and will reportedly start construction in March.

Back-from-the-dead development

The story of One Madison Park is frequently invoked as a parable of the recent boom and bust. Now, however, the 50-story skinny tower — built by the relatively untested developers Ira Shapiro and Marc Jacobs and forced into bankruptcy in mid-2010 after about a dozen sales closed — is starting a new chapter.

56 Leonard

Stephen Ross’s Related Companies and Ziel Feldman’s HFZ Capital Group are moving swiftly to take over the property, after emerging as the only bidders before an auction planned for last month. Related, HFZ and a One Madison entity still need court approval for a restructuring plan that revolves around the developers’ purchase of about $234 million in debt, but the building could change hands as early as February.

That would allow Related and HFZ, as the building sponsors, to sell the remaining 57 units and finish construction on amenities including a pool and a gym.

Another revived development attracting attention in 2012 will be 56 Leonard, the Herzog & de Meuron–designed tower, which was set to rise 57 stories above Tribeca in a Jenga-like construction of glass and concrete. However, work stopped in late 2008 when developer Alexico Group had trouble obtaining additional financing.

Now, Houston-based developer Hines has joined Alexico on the 145-unit project, which will contain a mix of one- to five bedroom units priced from nearly $2 million to $30 million. With a sales relaunch planned for mid-2012, brokers and buyers are calling on a daily basis to check on progress, said Corcoran Sunshine’s Mack, who will head up marketing.

Trophy listings

As the 2012 calendar year starts up, the Woolworth Mansion at 4 East 80th Street, which came on the market for $90 million in March, is New York City’s priciest townhouse listing. Paula Del Nunzio, the Brown Harris Stevens broker handling the sale, declined to discuss whether any offers had come in, or her expectations for a sale in the coming year. “The only thing I don’t have is a crystal ball,” she said.

Meanwhile, Steven Feder, founder of the Psychic Readers Network (who might have a crystal ball), has been trying to sell his Time Warner Center penthouse on and off for several years; at $60 million, the listing was the second most expensive on the market during a stretch of 2011. Elizabeth Sample and Brenda Powers, of Sotheby’s International Realty, are representing Feder.

Several recent offers for the 9,000-square-foot four-bedroom have come in, but the unit is currently being rented out (although the tenant could be made to leave in three months, Sample said). She expects a sale in 2012.

Speaking of pricey rentals, Juergen Friedrich, a former Esprit Holdings executive who owns the Plaza’s Astor Suite, put the 5,087-square-foot three-bedroom up for rent last month. The $165,000 monthly price tag makes it the city’s most expensive rental listing, according to listing agent Melanie Lazenby of Elliman, who is hoping for a signed lease this year.

Also set to hit the market in 2012 is Brooklyn’s 96 St. Marks Avenue. The units there may not be fetching the same exorbitant prices, but the building will be the first multifamily residence in the country to seek certification from Germany’s Passive House Institute, which has established standards for “zero energy” houses that maintain comfortable temperatures without active heating and cooling systems. The 80-year-old four-story brownstone has three two-bedroom units and a garden duplex, according to developer Brendan Aguayo. Pricing is not yet set.

Also worth watching this year? The brewing legal battle over Huguette Clark’s three sprawling Fifth Avenue apartments (see related story here).

In the last five years, New York’s supply of hotel rooms has grown by 24 percent, according to Mayor Michael Bloomberg. But citywide occupancies have remained relatively unchanged, said John Fox, a senior vice president at PKF Consulting who tracks the hotel industry.

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“In general terms, it means that we’ve absorbed all these new rooms,” he said.

Luckily for the new hotel developments set to get underway in 2012, that trend shows no signs of stopping.

At 1717 Broadway, Marriott International and Granite Broadway Development are erecting what they say will be the tallest standalone hotel tower in the city, at 752 feet, nine inches. While the Nobutaka Ashihara–designed structure isn’t set to open until 2013, construction will be nearing completion this year. It will house 639 rooms split between a Marriott Courtyard and a Residence Inn by Marriott.

New hotel brands are also set to come to New York this year.

This month, the city’s first Conrad Hotel & Resort — a luxury brand from Hilton Worldwide — will debut at the former Embassy Suites in Battery Park City, with 463 rooms each at an average of 550 square feet. Goldman Sachs bought the hotel in 2006, after it was briefly closed following the September 11 terrorist attacks.

Additionally, the latest iteration of Ian Schrager’s hospitality concept, the Public Hotel, will soon arrive in New York as part of Durst Fetner Residential’s 56-story rental tower at 855 Sixth Avenue. (The first Public opened in Chicago in October.) Groundbreaking on the 250 rooms is scheduled for April.

The Out NYC at 510 West 42nd Street, the city’s first gay hotel, will add another 105 rooms when it opens in early 2012.

Lastly, one familiar property — the Cooper Square Hotel — will be getting a makeover during the next year now that hotelier Andre Balazs has begun transforming it into the Standard East Village (a more subdued version of his Standard Hotel in the Meatpacking District), with 145 rooms.

Commercial brokers

The former Eastern Consolidated investment sales brokers Eric Anton and Ronald Solarz made the big switch to Brookfield Financial, part of Brookfield Asset Management, in September. But this year is when their deal-making action is likely to start up.

“We’re brand-new; we’re babies,” Anton said.

The pair will continue to work on land and multifamily sales, but they also plan to ramp up their work with office properties, focusing on Class A and B buildings from $50 million and up. Given Brookfield’s national and international operations, Anton and Solarz are angling to get involved with office transactions outside New York City. With Chris Wilson, a real estate finance specialist, the team will also branch out to handle mergers and acquisitions, Anton said.

Meanwhile, last January Benjamin Fox left his post as president of Winick Realty Group to head up Massey Knakal Realty Services’ retail leasing division. As of early last month, the team had 70 sales and leasing listings. The leasing arm is a departure for Massey Knakal, and the firm’s chairman, Robert Knakal, could be found at a holiday party boasting of the division’s success. (Fox declined to discuss details.)

While they’re not quite a Brookfield, two smaller firms are worth keeping an eye on.

Ivan Hakimian’s HPNY, founded in March when the broker left Itzhaki Properties, is currently shopping two off-market hotel development sites in the Financial District. Last month, the firm found buyers for a “big” retail building in the Meatpacking District and two properties in the East 20s, one residential and one office, Hakimian said.

“I want to push him down the stairs,” joked David Schechtman, a principal at Eastern Consolidated, describing his competitor as a “tremendous” off-market broker.

Also in the category of burgeoning firms, Tarter Stats O’Toole, a 25-year-old Manhattan-based commercial sales and leasing brokerage, grew from five agents to almost a dozen in 2011, and shows no signs of stopping. That’s thanks in part to vice president Catherine O’Toole, who helped increase the firm’s agency representation by 1 million square feet up to 3 million square feet in the last year. The firm plans to recruit several more agents in the coming months.

(clockwise from left: Andre Balazs, Ronald Solarz, Eric Anton, and Ivan Hakimian.)

Clients include New Jersey’s Hartz Mountain Industries, Renaissance Properties, Lincoln Property Company and the Eretz Group, O’Toole said. But she prefers to stay out of the spotlight. “I function well behind the curtain,” she said.

Residential brokers

Elliman’s Fredrik Eklund is literally a broker to watch in 2012, not only because he and partner John Gomes will help design and market half a dozen new developments Downtown this year, but also because he’ll beam onto your TV screen as a cast member of “Million Dollar Listing,” Bravo’s Manhattan spinoff of its Los Angeles–based reality show.

Eklund said the chance to court international buyers on the show, which is set to debut sometime this year, motivated the Swedish broker to join the cast. “How many realty agents are known from New York in, let’s say, China or in the U.K. or in Sweden?” he said. Connecting Scandinavian buyers with properties overseas is also the motivation behind Eklund Stockholm New York, which in 2012 will launch its first London storefront and a second Stockholm office.

When Kyle Blackmon was 28, he helped former Citigroup chairman Sandy Weill buy a 6,744-square-foot penthouse at 15 Central Park West for $43.7 million. Now in his early 30s, the Brown Harris Stevens broker, who The Real Deal included in its “Moguls in the Making” story in April, recently helped Weill find a buyer for the apartment, which was listed for a whopping $88 million.

Depending on the final sale price, it could set a high (and early) bar for the most expensive residential sale ever in the city, and will almost definitely eclipse last year’s priciest deal, the $48 million sale of a condo at the Plaza.

As far as newbies go, Morgan Turkewitz, a rental agent at Citi Habitats, is not doing too badly either. Turkewitz, 24, was named Citi Habitats’ Rookie of the Year in 2010, her first full year at the firm, partly because she closes between six and 10 deals a month and partly because she starts answering e-mails at 5:45 a.m., she said. “Some of my clients think I’m crazy,” she noted.

As a college student at the University of Delaware, Turkewitz spent a summer selling office supplies door-to-door in Tennessee. She said she wound up ranking as the company’s second-best salesperson nationwide. When Citi Habitats senior vice president Brian Morgan, now Turkewitz’s boss and an acquaintance of her brother, heard about her performance, he said, “Imagine what she could do with real estate in New York,” according to Turkewitz.

On the firm level, while Elliman has always handled rental listings, the city’s largest residential brokerage is focusing anew on the rental sector. The man behind the expansion is Mark Menendez, the firm’s director of rentals, and head of its flagship rental office in Tribeca.

This year, Menendez will continue to recruit rental agents, as well as run a planned Wall Street office, which will cater to tenants in the Financial District. “We feel like it’s a very strong part of the market,” Menendez said, “and in Manhattan, the rental market is always going to be important.”


While 2010 may have been the year of the new venture — between the founding of Keller Williams NYC, Town Residential and a host of start-ups such as Broker Heaven and RentJuice — the last year gave birth to two noteworthy alliances that could flourish or flounder in the upcoming year.

In October, the financially struggling commercial firm Grubb & Ellis revealed that mogul Andrew Farkas, founder of Island Capital Group, would invest a significant stake in the commercial brokerage. Indeed, an Island affiliate is investing $10 million and, separately, joining Colony Capital, a California-based real estate investment firm, to hold Grubb’s senior secured debt.

Sources have told The Real Deal that Colony and Island are looking to fashion a deal that could give them total control of Grubb. (Grubb would not comment.)

Also in October, Howard Lutnick’s global financial brokerage BGC Partners closed on its acquisition of the U.S. commercial real estate brokerage Newmark Knight Frank, creating a 1,600-broker powerhouse.

Things started changing immediately, beginning with the commission structure: A November news report said the 425 ex-Newmark brokers would be forced to give up part of their commissions in exchange for BGC stock. But it remains to be seen whether further policy changes will affect the ranks. (Representatives from the firms declined to comment.)

Real estate investment trusts

After making its first New York City acquisition in March, the Denver-based UDR went on a Manhattan tear, spending nearly $1.2 billion to nab 10 Hanover Square and 95 Wall in the Financial District, Rivergate in Murray Hill and 21 Chelsea on West 21st Street. All told, that’s more than 1,900 rental apartments.

But UDR isn’t quite finished, according to CEO Tom Toomey. The goal is to invest up to $800 million more in Manhattan rental buildings, particularly in older, under-rented neighborhoods, Toomey explained. And he hasn’t ruled out ground-up development down the road.

In the nearer term, UDR plans to spend $60 million in 2012 renovating the 706 residences and common areas at Rivergate, with the goal of raising the rent from about $3,200 to $4,000 per month, Toomey said.

No doubt shareholders and analysts will be anxiously waiting to see how this expansion affects UDR’s stock price in 2012.

For its part, Equity Residential has already taken the plunge into the field of new construction, first building 70 Greene in Jersey City, New Jersey. (see related story here). Its first ground-up development in Manhattan, the 111-unit Ten23 in Chelsea, went on the market in October; it’s now 15 percent leased and slated for occupancy this month.

But keep watching. Along with its stake in 400 Park Avenue South, Equity also signed a 99-year lease worth a reported $76.5 million for the site at 170 Amsterdam Avenue, where the REIT plans to erect a 224-unit rental building. Groundbreaking is scheduled for the second quarter.

Brookfield Asset Management may have grabbed headlines in 2011 as the owner of Zuccotti Park, the site of the Occupy Wall Street protests, but in 2012 the REIT will be in the spotlight for its other projects.

First, there’s a joint bid with the Stuyvesant Town–Peter Cooper Village Tenants Association to buy and transform the complex’s 11,232 rental apartments into co-ops or condos, depending on the outcome of discussions with tenants. The Toronto-based trust is also seeking fashion retail tenants for 200,000 square feet of space at the World Financial Center.

Stephen Plourde of the McDevitt Company, which is handling the leasing for Brookfield, said the firm would likely have a deal to announce in the first quarter.

Lastly, a Brookfield affiliate recently paid $110 million to buy Prudential Real Estate and Relocation Services, making the company the world’s second-largest employee relocation services provider behind Connecticut-based Cartus Broker Network.