UPDATED, 2:25 a.m., April 4: Joe Sitt is a Brooklyn guy who’s very much part of the international jet set: He holds court at MIPIM and has partied in St. Tropez for fleet week, so it makes sense he’d take the savvy that made him a Fifth Avenue baron and extend it to the playgrounds of the European elite. In 2012, he purchased 65 Boulevard de la Croisette, a luxury retail property in the heart of Cannes with tenants such as Burberry and Brioni. Sitt, like almost every other player in New York, never reveals his investors. But White House filings released Friday show that White House chief economic adviser Gary Cohn is a partner on the Cannes property, and on several other Thor Properties in New York.
The filings, first reported by TRD’s Will Parker, are yet another example of just how intertwined President Trump’s administration is with the elite of New York real estate. Last week, Sitt made an appearance on Fox Business in which he chastised critics of Cohn, Jared Kushner and Ivanka Trump.
“Those guys are more Democrat, candidly, then they even are Republican, and now you’ve got a balance in the government, at least in the White House,” Sitt said. Is that Joe Sitt the concerned citizen talking, or Joe Sitt the partner – or a little bit of both?
We also revealed that the money behind Harry Macklowe’s last two big deals, the acquisitions of One Wall Street and the retail at 432 Park, is Sheikh Hamad Bin Jassim Bin Jaber al-Thani. HBJ, as he is known, is one of the world’s richest men – though Forbes recently pegged him at being worth $1.2 billion, sources in Qatar told me that as with other high-ranking members of the royal family, he is likely worth many multiples of that.
Having HBJ in his corner may explain why many in the market don’t see Macklowe’s One Wall deal as being under the same time crunch as other projects in search of financing. Though Macklowe was first looking for a $1 billion construction loan, the developer and his partners will now plug the gap with additional equity.
“If you’ve got that kind of equity behind you, you can’t be in trouble,” one major developer active in the market told me.
And even if the smaller loan doesn’t materialize in full, Macklowe could once again dial Doha.
Bronx-bound money train: Bronx borough president Ruben Diaz Jr. released some astonishing numbers last week: His borough saw a record $3.3 billion of investment in 2016, with over 14 million square feet of development activity. A big chunk of that was residential investment, with developers adding over 5,000 units to the borough’s housing stock.
And there’s heaps more to come. Top of mind is Joseph Chetrit and Keith Rubenstein’s megaproject at 101 Lincoln Avenue, which aims to bring 1,300 new rentals to Mott Haven. It’s seeking a whopping $500 million construction loan, a record for a private development there, as TRD’s Mark Maurer reported.
If the project works out, I’d expect institutional funds to make their way to the Bronx in a big way.
Kushner’s very busy week: Where should we begin with Kushner Companies? The firm’s been grabbing headlines for a flurry of deals, as well as for one boondoggle. First, it is selling an Astoria multifamily package for $76 million.
Second, its impending deal with Anbang at 666 Fifth finally fell apart. With nonsensical numbers being bandied about – the project’s valuation leaped from $7.2 billion (still ridiculous) to $12 billion (pure poppycock) – it was but a matter of time before the Chinese insurer bowed out.
Then, it helped orchestrate a deal in which Normandy became the majority owner of 175 Pearl Street, the one Dumbo Heights building that has struggled to lease up. Normandy is investing $100 million, with Kushner Companies, Aby Rosen’s RFR and Asher Abehsera’s LIVWRK moving into minority positions and Invesco exiting the property.
Kushner Companies, Rosen and Abehsera used the cash from that deal, plus a Citi loan, to buy Invesco out of the four other Dumbo Heights buildings in a $600 million deal, Maurer reported. And, oh yeah, Jared will personally have a piece of the action – the new White House disclosures show that though he has divested or will divest from 666 Fifth, 80 Maiden Lane and some other holdings, he’s keeping his interest in at least 40 NYC real estate entities, including Dumbo Heights.
This week in optimism: “People have called me and said, ‘We would like you to come and appraise our home — we’re thinking of selling and we love Warren Buffett, we love the brand, we love what it stands for.’”
That’s Ellie Johnson, a Sotheby’s vet tasked with overseeing Berkshire Hathaway HomeServices’ entry into New York City. Out-of-towners have historically had a tough time making it in brokerage here, and counting on Buffett’s name to sell product in the Big Apple seems like a stretch.
(Paydirt is a weekly column that riffs on the biggest NYC real estate news of the moment, providing analysis and historical context on the deals and players that make this town tick. Read more from Paydirt here.)