Web hits: The month in review

Riverton appraised at less than half the value of loan

The Riverton Houses apartment complex in Harlem was reappraised at $108 million, less than half the value of its $225 million mortgage, according to a report last month from commercial mortgage tracking firm Trepp.

The property has now lost 68 percent of its value compared to its appraisal value of $340 million in January 2007, according to a source.

The most recent prior appraisal put the value of the property at $52 million below the loan value, or about $173 million, Trepp data indicates.

The complex of 1,230 apartments between 135th and 139th streets and Fifth Avenue and the Harlem River is owned by Stellar Management, which defaulted on the loan, and is in foreclosure. Stellar purchased Riverton for $131 million in August 2005, with a $105 million loan and $26 million in equity.

“The loan that served as the canary in the coal mine for [commercial mortgage-backed securities] is back in the news today,” Manus Clancy, Trepp managing partner, said in a report to clients.

“A new appraisal reduction was placed on the property [this past month], and the new number implies a potential loss of over half the value of the loan,” Clancy wrote. By Adam Pincus

Spanish investor pays $1,700 per square foot in Flatiron District

Developer Joseph Sitt’s Thor Equities sold an ornate, cast-iron Flatiron District commercial property at 901 Broadway for $24.6 million to a Spanish businessman who paid all cash on the deal recently, a broker on the sale said.

The 14,336-square-foot building sold for a jaw-dropping $1,715 per square foot.

The five-story building at the corner of Broadway and 20th Street, originally the home of retailer Lord & Taylor Dry Goods Store, was built in 1867, and is fully leased except for the fifth floor, sales broker Robert Knakal, chairman of brokerage Massey Knakal Realty Services, said. He said that the sale closed Aug. 27.

He noted of the price: “It is a very positive sign for the marketplace, which is in need of positive signs.”

The all-cash Spanish buyer, who Knakal said described himself as an “industrialist,” had real estate holdings in his native country but none in New York City, making him part of a trend.

“We have not seen such an influx of foreign buyers since the mid-1980s,” Knakal said.

His firm recently sold 115 West 57th Street to a Japanese investor for $5.8 million in cash, and has three more deals worth $27 million in contract, he said.

Thor Equities bought the building in 2006 for $17.375 million, city property records show. The company did not immediately respond to a request for comment. By Adam Pincus

Boymelgreen’s Novo condo sells out after three years on market

Embattled developer Shaya Boymelgreen has at least one piece of good news. Boymelgreen’s Novo, a 113-unit condo on Brooklyn’s Fourth Avenue, sold out after nearly three years on the market, with the last unit scheduled to close last month, according to Corcoran Sunshine Marketing Group, which exclusively handled sales at the project.

The condo, which encountered resistance from the community after using a local park for construction staging for the building, began sales in March 2007.

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Meanwhile, development along Fourth Avenue, once billed as the next frontier of gentrification in Brooklyn, has slowed amidst the real estate slump.

Novo, at 343 Fourth Avenue between the neighborhoods of Park Slope and Gowanus, had closed around 70 percent of its units by the time the Lehman Brothers collapse occurred in September 2008, so it didn’t have to contend with stiff presale requirements now in place from Fannie Mae, according to Gordon Hoppe, a senior vice president and director of sales at Corcoran Sunshine. Financing for buyers in the building “wasn’t an issue,” Hoppe said. According to Streeteasy.com, the average price of units sold in the building was $607,000, or $671 per square foot. By Candace Taylor

Broker creates $22.5M six-unit listing in FiDi

You have to hand it to Prudential Douglas Elliman Executive Vice President Ariel Cohen for creativity. In a tough market, Cohen took matters into his own hands by creating a $22.5 million exclusive listing from scratch by convincing five of his neighbors to put their apartments on the market along with his, giving buyers the option of combining them into one eight-bedroom, 9,500-square-foot Goliath.

The resulting apartment, at the new condominium Downtown by Philippe Starck, at 15 Broad Street, would have eight bedrooms, 11 bathrooms and 22 windows. The listing is the most expensive one on the market in the Financial District, and one of the largest. If it sold, it would eclipse the previous record for the area, set at the Setai with a $7.82 million sale in 2008, according to Streeteasy.com.

The listing hit the market in January in the midst of the post-Lehman crisis, but Cohen said he is seeing renewed interest now that economic and market conditions are perking up.

Recently, “we’ve gotten a lot of overseas inquiries” about the mega-listing, he said, adding that the current uptick in activity has made him optimistic the listing will move during the traditionally busy fall season. “Usually August is a dead zone,” he said. “But it [was] extremely busy in terms of business. It’s so bizarre.” By Candace Taylor

Related exec takes Columbia position funded by SL Green CEO

A Related Companies executive is heading back to school as the leader of Columbia University’s real estate development program.

Vishaan Chakrabarti, a developer, architect and planner, is leaving his position as executive vice president of design and planning at Related this fall to take charge of the real estate development program at Columbia’s Graduate School of Architecture, Planning and Preservation, the university announced last month. Chakrabarti will be responsible for expanding the program’s faculty, reviewing the curriculum and making admissions more competitive, he told The Real Deal.

“The idea is to make it the best-in-class real estate program in the world,” Chakrabarti said. “There are actually very few terminal professional degrees in real estate [and] it has all the makings because it’s housed in one of the greatest architecture and planning schools, and it’s got an affiliation with one of the best business schools.”

Chakrabarti said he thinks the 23-year-old master’s program, which recently expanded to three semesters, is at “a great pivotal point” and can accomplish its goals within five years.

The funding for Chakrabarti’s position, the Holliday professorship, comes from a donation from SL Green CEO Marc Holliday, an alumnus of the program, and his wife Sheree Holliday. By Sara Polsky

Core expands business to include more rentals

Real estate marketing firm Core is expanding its core business to include more rentals. The company has enlarged its rental presence and acquired its first rental director, Regis Roumila. Core CEO Shaun Osher said he still plans to focus on high-end units and new developments.

“I think there’s a niche that is very much needed in this marketplace, where the rental market is very much perceived as something on the lower end,” said Osher. “I think there’s been a void in the market, and we’re looking to fill that void.”

This move comes amid a time when more agents are getting into the rental game, to ride out a bad market. Osher said that his brokers — there were 38 at the group as of last month, according to Core’s Web site — will work on both sales and rental deals. While the group plans to expand — Osher wouldn’t say how many new agents he plans to hire — it will remain a boutique firm.

Osher said that Roumila was ideal for the job because of his extensive on-the-job experience as a rental broker.

“Regis [Roumila] was a very high-performing rental agent,” Osher said. “He owned his own company, and before that he was at Century 21 and Manhattan Apartments.”

Osher would not reveal any specific rental listings Core plans to represent.
TRD