Aidan Gardiner

  • Clockwise from top left: Billionaire investor Howard Marks buys four Amagansett parcels for $35M, China-themed Bridgehampton home hits the market again with a $20.1M price cut, celebrity chef Rachael Ray brings the ask for her Southampton compound down to $4M and East Hampton’s “White House” lists for $12.5 million.

    Despite a down market, Hamptons resi brokers remain resolute
    The Real Deal rolled out this week it’s annual ranking of the top East End brokers and brokerage firms, and one again, the Vichinsky brothers from Bespoke Real Estate topped the list. Cody and Zachary Vichinsky, both former Corcoran Group brokers, set up their Water Mill-based boutique in 2014. The broker duo had topped previous Hamptons broker rankings put together by TRD, but this year were well-poised to hold on to their No. 1 spot. Bespoke focuses on the $10 million-plus luxury market, which was what TRD used this year to measure the brokers and brokerages who handled the most single-family sales between April 1, 2018 and March 31 of this year.  “You don’t need to buy a home in this market — it’s a desire,” Cody Vichinsky told TRD when asked to explain the East End’s slumping sales market. “It becomes like a Hamptons standoff. There are qualified folks on both ends, but there’s just not a meeting of the minds.” [TRD]

    Oaktree’s Howard Marks buys 4 Amagansett parcels for $35M
    Howard Marks, the billionaire co-founder of Oaktree Capital Management, has bought for $35 million four properties in Amagansett from Barbara Zuckerberg, the ex-wife of former Goldman Sachs executive Roy Zuckerberg, according to the New York Post. The quartet of East End properties — 5, 7 and 9 Tyson Lane, along with 310 Further Lane — sit behind a Further Lane property that Marks bought for $30 million in 2010 from television personality and former advertising industry titan Donny Deutsch. Two of the Tyson Lane parcels are developed and sold for $15 million and $8.75 million, according to 27east, which didn’t note their respective addresses. The third Tyson Lane parcel and the one on Further Lane are empty. Those two sold for $8.75 million and $2.5 million, respectively. The Tyson Lane properties collectively make up 3.4 acres, while the 310 Further Lane property is eight acres of agricultural reserve. The Post noted that the Zuckerbergs, now divorced, bought their former Tyson Lane compound in 1999 for $7 million from developer Bruce Ratner. At the time, the property hosted a Francis Fleetwood-designed home that was moved in 2005 to a nearby lot on Tyson Lane. [NYP]

    Ahead of Memorial Day, a look at the Hamptons’ new hotspots
    With the holiday weekend suddenly on the horizon, so is the start of another busy Hamptons summer season. In its Spring 2019 Tri-State issue, which went live this week, The Real Deal took a deep-dive into the East End’s commercial real estate sector, from Southampton’s sagging retail scene to Montauk’s hopping hospitality sector. TRD examined the $300-a-night “glamping” experience being offered to guests in East Hampton and a rush of new restaurants setting up shop on the South Fork, both of which are looking to cater to well-heeled weekenders and a less seasonal, yet still ultra-luxury, customer base. Still bugging commercial brokers, however, are a dearth of prime development sites for new hotels and a revolving retail landscape that has led to more than a dozen empty storefronts in Southampton alone. [TRD]

    After $20M price chop, Bridgehampton home lists again
    The owner of a China-inspired home in Bridgehampton has brought it back to the market, but only after hacking a whopping $20.1 million off the $28 million that it had initially sought when coming to market in 2013, the Wall Street Journal reported. Stanley and Susan Reifer picked up the empty five-acre property at 5 Paumanok Road in 2002 for $450,000 and built the Sino-style home. They purchased 500-year-old Ming Dynasty doors for its entrance. Artist Jian Guo Xu designed the property’s grounds, which hold a replica of a 15th-century temple in Beijing that has a 40-foot mural by a Tibetan artist. The 8,378-square-foot home has seven bedrooms, seven bathrooms, five half-bathrooms, a library and a wine cellar. Outside, there’s a two-level pool and spa, a tea house, a bamboo garden, curved bridges, a moon gate, meditating gardens and other features. Douglas Elliman’s Paul Brennan, No. 8 on The Real Deal‘s current ranking of top Hamptons brokers, has the listing. The Reifers never got any offers when they put the property on the market six years ago so they removed the listing in 2014. “It was such a different period and we thought that prices looked to be close to the peak,” the Reifers’ son, Jeremy, told the Journal. “We have a much more realistic view of the market now.” The Reifers passed the home to their son, who now owns the property through a trust set up by his father. The residential sales market that Jeremy Reifer is now seeking to sell the home in, however, is one where sellers and buyers are increasingly unable to find common ground. [WSJ]

    Sono Osato’s former Bridgehampton home sells for $26M
    The onetime waterfront home of late ballerina Sono Osato in Bridgehampton has sold for $26 million, Mansion Global reported. The final sales price for the property, which went to contract last month, is $8 million less than its most recent $34 million ask. The home at 286 Quimby Lane was first listed for $37 million in March 2018. The buyer, whose identity has not yet been revealed, plans to demolish the 102-year-old home on the property. The 7,200-square-foot residence has five bedrooms, six bathrooms and two half-bathrooms, a relatively modest footprint compared to the twice-as-large home that could be built on the site under current zoning laws. “It was a conundrum for a lot of people who saw the house,” the property’s listing agent, Deborah Srb of Sotheby’s International Realty, told Mansion Global. “It wasn’t oriented to the way that people want to use the space today.” The new owners, represented by Bespoke Real Estate, plan to repaint the home and use it as a summer house until they can secure permits for a more modern construction. Mansion Global noted that the sale is one of the priciest of 2019 in the Hamptons, where high-end home sales have fallen when compared to previous years. [Mansion Global]

    East Hampton’s famous ‘White House’ lists for $12.5 million
    The early 18th century East Hampton home that developer and bicycling enthusiast Fred Mengoni bought in 1989 and completely refinished has been put back on the market for $12.5 million, the New York Times reported. Mengoni, who was born in Italy, died in February 2018 at 94. The Georgian home at 6 Woods Lane was built around 1725, but had fallen into disrepair by the 1980s. “I gutted it,” Mengoni told the Times a decade later. “It was a piece of junk.” Sitting on nearly three acres, the 7,600-square-foot home has four levels, seven bedrooms, six bathrooms, two half-bathrooms, a marble-covered main floor, a rosewood-paneled library, a dining room with a fireplace, an indoor Jacuzzi and a wine cellar. The grounds also hold a pool, pool house, three-car garage and a barn. Douglas Brown and Paul Brennan of Douglas Elliman, the latter of whom came in at No. 8 on The Real Deal‘s annual ranking of top Hamptons brokers, have the listing. Mengoni, for all his efforts to make the place shine, rarely stayed in the home, opting instead for his Manhattan townhouse. Behind the Hedges and Dan’s Papers noted that Mengoni slept in the home less than 15 times in the nearly 30 years he owned it, and the Times reported that the late developer would sometimes stop by at 5 a.m., grab his bike and pedal off into an East End sunrise. [NYT]

    Rachael Ray cuts ask for Southampton compound to $4M
    Small-screen celebrity chef Rachael Ray and her husband John Cusimano have sliced $690,000 off the ask for their Southampton compound, bringing the potential purchase price for the property down to an even $4 million, the New York Post reported. Ray had initially listed the properties at 224 and 234 Tuckahoe Lane for $4.9 million in August 2017 before dialing back that ask to $4.69 million in April 2018. Would-be buyers can also choose to pick up the Ray-owned properties separately. The property at 234 Tuckahoe Lane, listed at $3.5 million, has a 3,000-square-foot home with three bedrooms, five bathrooms, two fireplaces, a chef’s kitchen (of course), a pool and a 1,500-square-foot pool house. The other property has an ask just shy of $1.3 million. Angela Boyer-Stump of Sotheby’s International Realty has the listing. [NYP]

    Broker-lawyer, media exec tout Hamptons real estate tips
    Dan’s Hamptons Media COO Eric Feil and attorney-broker Alan Schurman released this month a compilation of lessons learned and best practices from their experience acquiring coveted East End real estate, 27east reported. “I Can, I Will, I Must: Buying the Hamptons, Buying a Successful Future, Becoming the Best You Can Be,” seeks to serve as a buyer’s guide for those interested in investing in Hamptons real estate, as well as provide stories about how the exclusive enclave came to be built, as noted earlier this month by the New York Post. Schnurman, a founder of 1-800-LAWLINE, retired in 2011 as a senior partner at personal injury and insurance law firm Zalman Schnurman & Miner and joined Saunders & Associates the following year as a broker in Bridgehampton. In less than a year, Schnurman earned a commission from a $15.5 million sale, according to 27east, which noted that the retired lawyer has invested millions of dollars in real estate since he began buying up properties in the 1970s. [27east]

  • David Jeans

  • From left: JDS Development Michael Stern, 111 West 57th Street, and Property Markets Group founder Kevin Maloney (Credit: Getty Images)

    From left: JDS Development Michael Stern, 111 West 57th Street, and Property Markets Group founder Kevin Maloney (Credit: Getty Images)

    At 111 West 57th Street, the under-construction luxury residential tower’s legal history is as long as the tower is tall. And it’s about to get longer.

    AmBase Corporation, a Connecticut-based holding company that invested $65 million equity into the building’s initial partnership, has filed its fourth claim against the developers of the project, accusing them of a “corrupt agreement” that wiped the firm’s stake in the project and is now seeking to again to reclaim its ownership.

    The filing Thursday in New York State Supreme court follows a long trail of litigation between the sponsors of the building rising at the southern end of Central Park on Billionaire’s Row. In 2013, Michael Stern’s JDS Development Group and Kevin Maloney’s Property Markets Group partnered with AmBase to acquire the former Steinway Hall and its ground lease for $132 million, and develop a 1,428-foot-tall building above it; set to be the second tallest by roof-height in Manhattan. To cover the construction costs, the partners brought in financial firms AIG and Apollo Global Management to provide a $725 million loan.

    But amid cost overruns, the developers failed to make payments, and days before a forbearance agreement was set to expire, Apollo sold a $25 million junior mezzanine stake to Spruce Capital Partners in March 2017. Spruce promptly initiated a strict foreclosure proceeding on the building.

    After extended negotiations, Spruce brought Maloney and Stern’s firms back into the project to complete construction. AmBase has since then alleged that Stern and Maloney conspired with the junior mezzanine lender to foreclose on the property, and cheat AmBase out of its stake.

    AmBase, run by Richard Bianco, is now seeking a court-ordered constructive trust, which would force Spruce to control the asset on behalf of AmBase, effectively giving ownership to the latter. AmBase is also seeking damages for the sponsors allegedly breaching their fiduciary duty.

    But it remains unclear if AmBase’s latest attempt to reclaim its stake in the property will be successful. In January last year, a state Supreme Court judge rejected AmBase’s attempt to block the foreclosure with a temporary restraining order. And in October, a federal Supreme Court judge dismissed a RICO suit filed by AmBase against the developers.

    “As far as I’m concerned, AmBase owns the asset,” said Stephen Meister, an attorney with Meister Seelig & Fein, who is representing AmBase in the suit.

    Tad O’Connor, an attorney at Kasowitz Benson representing Stern’s JDS, said in an emailed statement that AmBase’s claim is “meritless, just like the numerous other allegations Ambase has made related to this project that have been dismissed by the courts. Our client intends to vigorously defend itself against these baseless claims.”

    Representatives for Maloney’s PMG and Spruce Capital did not respond to requests for comment.

    Other legal troubles have dogged the building since it began rising from the ground. Last June, brokerage Corcoran Sunshine filed a $30 million lawsuit against the developers, accusing them of self-sabotage, which affected the rate of condominium sales. Douglas Elliman has since taken over sales at the building, where apartments are priced from $18 million to almost $60 million on the upper floors. It is not clear how many apartments have been sold, but the building has a projected sellout of $1.3 billion, according to filings with the New York State Attorney General’s office.

    In December, The Real Deal revealed a $21 million investment in the building by two Russian oligarchs — including one who was deported from the United States for a bribery scheme — made through a web of shell companies, front men and promissory notes.  The current developers claimed to have no knowledge of their investment.

  • Rich Bockmann

  • Kushner Companies president Laurent Morali

    Kushner Companies president Laurent Morali

    Kushner Companies closed on its purchase of a $1.1 billion portfolio of Mid-Atlantic apartment buildings with financing from Warren Buffett’s commercial lending company, according to sources.

    Berkadia Commercial Mortgage provided Kushner with nearly $800 million in debt to finance the purchase of the portfolio of 6,000 rental apartments in Maryland and Virginia from private-equity firm Lone Star Funds, sources said.

    The deal closed yesterday.

    A spokesperson for Kushner Companies declined to comment, and representatives for Berkadia could not be immediately reached.

    Berkadia, the Manhattan-based lender owned by Buffett’s Berkshire Hathaway and Jefferies Financial Group, provided the 10-year debt through Freddie Mac.

    The Mid-Atlantic apartment portfolio is the biggest acquisition for Kushner Companies since the firm purchased 666 Fifth Avenue for a record $1.8 billion in 2007. The company – led by Charles Kushner, Nicole Kushner Meyer and Laurent Morali – sold the ground lease on the troubled asset last year to Brookfield Asset Management, and has since ventured farther outside the high-stakes world of New York City real estate that came to be the company’s calling card over the past decade plus.

    The family firm, which at one point owned as many as 30,000 multifamily units, is returning to its roots owning and managing apartments. In addition to the Lone Star deal, Kushner is working on developing a three-phase, $550 million apartment project in a Miami Opportunity Zone with 1,100 units.

    Kushner has also bought multiple properties in an Opportunity Zone in New Jersey. A watchdog group earlier this year filed a complaint with the Department of Justice asking the department to investigate possible conflicts of interest that White House advisor Ivanka Trump – who is married to Kushner family scion Jared Kushner – may have by benefitting from the program. (Jared Kushner stepped down as CEO in January 2017, and does not hold a role in the company now.)

    Kushner Companies has also been in hot water over some of its rental properties. Tenants in Kushner properties around Baltimore filed a federal lawsuit in 2017 accusing the company of charging improper fees and threatening eviction in order to force payment. A circuit judge last month reportedly denied the tenants’ request to certify for a class-action lawsuit.

    In New York City, an investigation by City Councilmember Ritchie Torres reported in March that Kushner buildings in the East Village were operating with expired certificates of occupancy – meaning tenants are not legally allowed to live there. Torres acknowledged that this kind of violation is commonplace across the city and not specific to Kushner buildings. The landlord told The Real Deal at the time that it had inherited issues from previous owners and would work to correct anything further.

    The landlord reportedly received a subpoena last year from the U.S. attorney’s office in Brooklyn seeking paperwork concerning its rent-regulated apartments. A Kushner representative at the time said the company was complying with the request.

  • Mary Diduch

  • HomeAway president John Kim

    HomeAway president John Kim (Credit: HomeAway)

    The city is suing HomeAway to force the short-term rental website to turn over records related to listings on its platform.

    As part of its investigation into short-term rentals, the city in February hit HomeAway and Airbnb with a subpoenas for records of thousands of listings. Information on listings for properties marketed on Vrbo, a HomeAway affiliate, also were requested.

    While HomeAway’s counsel has acknowledged receiving the request, the company hasn’t turned over any documents yet, according to the city’s new filing Thursday in New York County Supreme Court.

    HomeAway “has not produced any responsive materials and has refused to even determine the quantity of potentially responsive records through a search of its own records,” the filing states.

    The city and HomeAway did not immediately return requests for comment.

    HomeAway has not provided written objections to the request, but the city alleges that the platform’s counsel has raised various constitutional and statutory reasons why it doesn’t want to comply.

    Through its investigation, the city identified at least 900 listings that it wanted more information on, according to the filing.

    Meanwhile, a judge last week approved an agreement between the city and Airbnb that established a plan for the HomeAway rival to comply with its subpoena — a request for details on some 20,000 listings.

    Airbnb and HomeAway aren’t the only targets of the city’s crackdown on short-term rentals. The city also has gone after small homeowners, landlords and a brokerage firm.

    Expedia picked up HomeAway for $3.9 billion in 2015. Last year, the travel-booking site then acquired two more startup short-term rental platforms — Pillow and ApartmentJet.

  • Inside TheRealDeal
  • Eddie Small

  • Donald Brennan and Brooklyn

    Donald Brennan and Brooklyn

    Engel & Völkers will be the newest entrant into Brooklyn’s residential market.

    The firm announced on Thursday that it has opened three new locations in the borough in Dumbo, Prospect Heights and Cobble Hill led by broker Donald Brennan. Brennan’s eponymous brokerage, Brennan Real Estate, will now do business as Engel & Völkers Brownstone Brooklyn.

    The Brooklyn team will work with both buyers and sellers in the borough.

    “Now more than ever in this shifting market, it is vital that our sellers are able to expose their assets to the largest possible pool of potential buyers,” Brennan said in a statement, explaining his decision to franchise with Engel & Völkers.

    Engel & Völkers, a Germany-based firm run by president and CEO Anthony Hitt, has continued to open new offices even as many other residential brokerages close their storefronts. It inked a lease in October for 1,300 square feet at 430 Park Avenue in Midtown for a “shop and lounge” space that will incorporate its yacht and aircraft leasing operation with its real estate sales operation.

    The firm employs more than 11,000 real estate advisors across more than 30 countries overall.

  • Eddie Small

  • 1365 York Avenue and Carole Pittelman

    1365 York Avenue and Carole Pittelman (Credit: Google Maps and Steve Friedman (Pittleman))

    The deals between Prudential and Glenwood are continuing to hum along.

    Prudential Multifamily Mortgage has provided Glenwood with a $102 million loan backed by Fannie Mae to refinance their residential property at 1365 York Avenue, according to property records.

    The residential property is located by East 73rd Street and known as The Somerset. It stands 37 stories tall and contains 490 units, and rentals go for an average price of about $4,500, according to StreetEasy.

    Glenwood and Prudential did not respond to requests for comment.

    The management firm, founded by the Litwin family, also received a $127 million Fannie Mae loan from Prudential in March for their luxury apartment tower at 300 East 75th Street, known as the Fairmont. It received a $98 million Prudential loan in June as well for a trio of rental properties at 322, 330 and 350 East 79th Street.

    Leonard Litwin, the longtime leader of the firm, did at age 102 in April 2017. The firm is now run by Carole Pittelman, Litwin’s daughter. It broke into affordable housing for the first time last year with a project on Coney Island.

  • Mary Diduch

  • Ahmass Fakahany and 240 Centre Street's domed penthouse (Credit: Getty Images)

    Ahmass Fakahany and 240 Centre Street’s domed penthouse (Credit: Getty Images)

    Remember that penthouse nestled in the domed clocktower at the New York Police Department’s former headquarters? It’s back on the market — and with another price chop.

    Douglas Elliman’s Tal and Oren Alexander and the Modlin Group founder Adam Modlin listed the 5,500-square-foot penthouse at 240 Centre Street this week for $19.5 million.

    That’s down from its original ask of $39.9 million in 2015, back when it was first listed with Linda G. Calka.

    Tal Alexander declined to comment.

    The luxury pad has seen a string of price cuts in the years since. It’s most recent price change was in 2017, when it dropped to $27.9 million, per StreetEasy.

    In the 2000s, Calvin Klein sold the penthouse to Ahmass Fakahany, co-owner of the Altamarea Group, which owns several restaurants around the country, and his wife Alsun Keogh. They combined it with another unit, only to discover a secret, circular room in the domed tower.

    A representative for Fakahany referred comment to the brokers.

    The renovated, four-story unit — which has a Parisian flair — also comes with two terraces, two garden patios and a private elevator. It also has an iron spiral staircase leading to the building’s iconic clocktower.

    The building dates to the early 1900s and was once used as the headquarters for the NYPD. In the 1980s, it was converted into a co-op.

    The Alexander brothers also recently took over another penthouse listing. The team took over the listing at 252 East 57th Street along Billionaires’ Row and gave the pad another price chop — down to $27 million from a previous $29.75 million.

  • Ellen Paris

  • Should the new maxim of salesmanship change from ABC — Always Be Closing — to ABP — Always Be Posting? Some brokers might say so. Top producers in the tri-state area are now more than ever using social media posts to Instagram, Facebook and LinkedIn as a way to raise brand awareness and attract clients, while also promoting the luxurious lifestyle that goes along with their high-end listings.

    Using an unscientific sampling of tri-state brokers who are active on several social media platforms, The Real Deal dug in to learn their tips and tricks for growing an online audience.

    Opinions on how the platforms should be used are as diverse as the agents themselves, but there was some consensus among the brokers: Most agreed that Instagram produces the most engagement, through consistent posting and storytelling. Most agents insist that racking up scores of followers isn’t the goal, and they all believe that buying followers is a big no-no. Other strategic spending on social media, however, is acceptable. Several brokers said they pay to boost posts, which ensures they show up in the feeds of more users.

    The bottom line is that connecting, engaging and consistently establishing relationships is key. Read on for a look inside their social media habits.

    Elizabeth Shay
    Houlihan Lawrence
    Rye, NY
    Follower stats
    Facebook: N/A
    Instagram: 723
    LinkedIn: N/A

    Using only Instagram for her social media posts, Shay employs her IG expertise to target younger clients. As a result, top agents in her office are asking how she uses the platform, she said. “I recently hosted an event at a new development, Greystone on Hudson, an enclave of 21 estates, where we wanted to bring in local agents,” she said. “I came up with the idea to host an Instagram training session.”

    She brought in an expert to teach a 90-minute class. “The focus was how to properly use all features of Instagram, including posts, stories, Instagram Live and IGTV, and how it relates to growing your real estate business on Instagram,” Shay explained.  Examples included how to use the right hashtag or geotagging in order to be discovered by people who may not be your followers. Over 70 agents from all over Westchester County attended.

    “I am only focusing on Instagram because that is where I see success and that’s where my sphere of influence is,” she said. “Not only that, I love Instagram, it comes naturally to me.” Shay posts stories to Instagram weekly, which often net 100 views. Her regular Friday Instagram story, “Friday Favorites,” typically showcases new listings, price reductions or a unique property. A recently popular “Friday Favorites” post featured Bruce Willis’ Bedford home, which was recently listed for sale.

    Robin Kencel
    Compass in Greenwich, CT
    Follower Stats
    Facebook (Business Only): 1,270
    Instagram: 970
    LinkedIn: 1,587

    Broker Robin Kencel, a founding agent of Compass’ Greenwich office, was the co-listing agent on the recent much-touted $14.9 million sale of record executive Tommy Mottola’s Greenwich estate. 

    She focuses on Instagram and LinkedIn. Her Instagram posts — which she prefers to Instagram stories, since they remain for longer than 24 hours — showcase her personal interests and design expertise to attract followers. 

    “I’m looking for people who came to me because a posting caught their eye and they relate to what I do,” Kencel said.

    LinkedIn is her go-to for posting market reports and entries from her blog. “I often receive calls from my connections with market questions,” said Kencel, adding that her social media efforts have heightened her presence in Greenwich.

    “I am always surprised when people know who I am,” Kencel said. “For me, the first step to getting a client is having you come to their mind. That is what social media does for me.”

    Diane Cookson
    Prominent Properties
    Sotheby’s International Realty, Saddle River, NJ
    Follower Stats
    Facebook: 1,300 (personal) and 400 (business)
    Instagram: 800
    LinkedIn: 765

    For broker Diane Cookson, social mediA has led to several sales. Her strongest platform is her personal Facebook page. A live Facebook video of a modern farmhouse in Upper Saddle River led to several interested buyers contacting her, she said: “The list price was $1,549,000, and it sold way over that.”

    She is a frequent poster because she believes prospective clients want to connect on a personal level before meeting. “I show snippets of my life, including my boys and design features I’m using to freshen my own home,” she explained.

    Tasty treats have incidentally become key to her online branding. At Thanksgiving, Cookson gives clients apple pies. Last year, she asked her Facebook followers where she could find the best apple pies. With follower feedback, her kids did a taste test of locally made pies, and she posted that video on Facebook. The result: 8,000 views. The video garnered her several more followers, though she doesn’t have an exact count of how many.

    Live videos on Facebook of Cookson’s listings sans addresses with the question “Where is this house?” also get attention and new clients.

    “I was contacted by a woman who said, ‘My husband is on your page every day. We want to use you because we like what you deliver,’” Cookson said.

    Sarah Minardi
    Saunders & Associates
    East Hampton, NY
    Follower Stats 
    Facebook: 1,700 (personal) and 300 (business)
    Instagram: 1,300
    LinkedIn: 2,000

    As an East Hampton native, broker Sarah Minardi uses her social media posts to promote the lifestyle the enclave is known for. She recently posted a story on Instagram that featured a listing’s beach access with a walk from the street corner to the sand.

    “I like to share interesting highlights from homes I sell. The walk detailed exactly how close the house was to the beach. It got a lot of interest,” said Minardi, who added that the story racked up over 1,300 views.

    When she is doing an open house, she does boost the post about it on Facebook, which has increased the foot traffic, she said. Minardi also boosts her Facebook Live open house videos, which generally last five minutes. They feature a walk through the home highlighting the property’s assets, which has been effective in producing buyer leads, she said.

    Minardi’s expense to boost these videos depends on the seller’s needs and her own branding. Each home she lists has its own “plan” for social media and the budget around it. Now using LinkedIn more frequently, she shares current market knowledge and recently started posting new listing videos there.

    Bridget Elkin
    Daniel Gale Sotheby’s International Realty
    Greenport, NY
    Follower stats
    Facebook: 1,440 (personal)
    Instagram: 12,595
    LinkedIn: 440

    Broker Bridget Elkin recently sold a waterfront cottage for $1 million with both buyers and sellers coming from Instagram, which might be one reason why she focuses entirely on Instagram for social media marketing.

    It’s all about “capturing a special aesthetic of a region so when sellers come across my Instagram account, they want their homes presented the way I present on Instagram,” she said.

    Many posts and live stories are landscapes of the area with people in them. “I get out of the way and show how people live here, how they enjoy the beaches and even how they eat their oysters,” she said. Elkin does not post listings in a traditional way. “If I am marketing a waterfront estate, I chose to share the beach stairs instead of the house itself,” she said.

    As a big fan of Instagram stories, she relies on drone photography to capture the lifestyle aesthetic that buyers are looking for. “I am a drone pilot, and I have a lot of fun with it. This seems to be part of the allure to my followers, that I am taking all the video footage and photography myself,” she added.

    April Saxe
    with her sisters May Burke and June Hatch (not pictured)
    Houlihan Lawrence, Rye, NY
    Follower stats
    Facebook: 805
    Instagram: 740
    LinkedIn: about 500 per person

    April Saxe has been selling real estate since 2001. Her younger sisters, May and June, work with her as a
    team and introduced social media to her marketing plan about five years ago. And it’s a good thing they did, considering that a recent $2.15 million sale in Rye came directly from an Instagram post.

    “The home had been on the market previously and didn’t sell. We got the listing, and the sellers invested $50,000 to take it in a new direction. We posted before and after photos, and our buyer came from that,” Burke explained. 

    Though they use Instagram, Facebook and LinkedIn, Saxe said Instagram “gives us the most presence and the biggest response.” One popular Instagram post, for example, called on followers to vote on whether they’d rather have an oversized laundry room or a mud room. (Most preferred the laundry room.) They recently began boosting their Instagram posts, spending about $15 weekly, and plan to raise the budget once they see what content people are reacting to with their posts. 

    Maria Babaev
    Douglas Elliman Real Estate
    Roslyn, NY
    Follower stats
    Facebook: 4,078
    Instagram: 5,100
    LinkedIn: 1,144
    Twitter: 2,920
    YouTube: 2,505 subscribers

    When it comes to social media, Maria Babaev utilizes Instagram, YouTube, Facebook, Twitter and LinkedIn. “For neighborhood videos, I like YouTube and Vimeo. I use professional filmmakers to shoot mini-movies for my tours, which I then post on YouTube,” she said.

    Babaev sold a $7.5 million property after the buyer saw the YouTube video. She currently has a cumulative total of 521,875 video views.

    Since YouTube is so successful for her, Babaev does real estate-related posts three to four times a week.

    “Video/tours have been a key element to allow buyers to get an insider look at our properties from all over the globe,” Babaev said. While the price for these videos depends greatly on the size of the property, the general range is $3,000 to $5,000 per property. She added that her YouTube presence helps in her rankings in Google searches for Long Island’s North Shore.

    Christopher Covert
    Saunders & Associates
    Bridgehampton, NY
    Follower stats
    Facebook: 1,389
    Instagram: 15,000
    LinkedIn: 2,000

    Posting on a set schedule isn’t a part of broker Christopher Covert’s game plan. Instead, he prefers to be “reactive to what is going on and then deciding on the right outlet.” He likes Instagram and LinkedIn best since they both offer “different vibes.”  His Instagram posts are all about the luxury lifestyle experience of the Hamptons. LinkedIn is a strategically targeted process. “For me, it’s more networking with a buying population,” he said. Covert uses the Microsoft-owned platform to share data, metrics and his weekly video marketing report. “I see LinkedIn as good for investors, while Instagram is more of an emotional buyer looking for that special home.”

  • David Jeans

  • From left:  28 West 44th Street, 25 West 45th Street and 183 Madison Avenue with WeWork CEO Adam Neumann (Credit: Google Maps, APF Properties, and Getty Images)

    From left: 28 West 44th Street, 25 West 45th Street and 183 Madison Avenue with WeWork CEO Adam Neumann (Credit: Google Maps, APF Properties, and Getty Images)

    In its quest to gobble up as many leases as possible, WeWork has signed another four locations in Manhattan this week for its “headquarters” offering.

    The flexible office space giant, which is signing dozens of deals as it gears up for an initial public offering, inked leases with APF Properties on four Manhattan locations totaling 110,000 square feet, the firms said Thursday. The spaces, at 25 West 45th Street, 28 West 44th Street and 183 Madison Avenue, will be filled with Headquarters by WeWork, which provides un-branded spaces for mid-size clients. Asking rents were not immediately available.

    APF, which is led by Kenneth Aschendorf and Berndt Perl, now has WeWork in five of its seven properties, including 115 Sixth Avenue and another location in Philadelphia.

    “WeWork is exactly the type of firm we would want to have across our portfolio,” said Aschendorf. “Even if it meant additional costs to relocate our tenants.”
    He added that “four or five” tenants were relocated to get WeWork into the spaces.

    WeWork also said Wednesday that it signed a lease with the Adler Group, for a roughly 52,000-square-foot space at 550 Seventh Avenue. Both parties were represented by the Kaufman Organization in that deal. Earlier this month, WeWork closed on a 50,000-square-foot lease at 30 Wall Street for its headquarters business.

    WeWorks’ parent company the We Company revealed last week that its losses doubled during the first quarter. The $47 billion company reported $689 million in revenue, more than double that of the first quarter of 2018. Its net losses totaled $264 million, a figure that the company said was offset by more than $240 million in two one-time gain payments.

    But the We Company’s adjusted EBITDA losses more than doubled, rising to $220 million from $106 million year over year. That figure included $31 million in merger and acquisition fees and inventory write-off costs, the We Company said. The firm said its total cash and cash commitments dropped to $5.9 billion, down from $6.6 billion at the start of the year.

    The firm’s total member count jumped to 466,000 individual customers in the first quarter, during which time WeWork added 50 locations.

  • Eddie Small

  • Owen Thomas (Photo by Axel Dupeux)

    Boston Properties is riding high on Wall Street. But the success of some of its less tested plays in new development and shared office space could be riding on how much longer the economy grows.

    For now, the real estate investment trust is beating out two of its top competitors on the stock market, Vornado and SL Green, and has $2.7 billion in new projects underway — almost entirely ground-up — that are nearly 80 percent preleased.

    And, as the office landlord’s name boasts, it’s not just a New York story.

    Boston Properties is staying ahead in the hypercompetitive REIT industry, sources say, largely because of its long-term investments in other cities. Among its five key markets, the firm of about 650 employees has major stakes in San Francisco and Boston, which give it a competitive edge with the ongoing tech and biotech booms in those cities.

    “Those are markets that have a little more embedded growth than New York right now,” said Philip Kibel, an associate managing director in Moody’s real estate finance division, who pointed to rising rents and declining vacancy rates in both cities.

    At the same time, the nearly 40-year-old firm still has a major presence in the Big Apple, with 27 office properties spanning just under 12 million square feet, including 767 Fifth Avenue, the Times Square Tower and 510 and 540 Madison Avenue.

    Owen Thomas — who replaced Boston Properties’ co-founder Mort Zuckerman as CEO in 2013 — pointed to the REIT’s development projects, including Dock 72 in the Brooklyn Navy Yard, which are expected to start bringing in revenue soon.

    “We have positioned the company for strong growth in 2019,” Thomas told The Real Deal in a recent interview in his firm’s New York office.

    “If you look at our development pipeline, that’s been a substantial driver over the last few years,” he said, adding that the company’s growth forecast is likely “higher than all other office REITs and higher than most REITs, period.”

    But Boston Properties’ aggressive bets on co-working and new office development in Brooklyn — both of which have yet to weather a significant downturn — carry a fair amount of risk, according to some observers. In the case of another big recession, which most economists say is simply a matter of when, less established lines of business could be among the hardest hit.

    Steven Marks, a managing director at Fitch Ratings, said that while the size and scope of Boston Properties’ exposure is manageable, “the co-working model — at least as it’s evolved and expanded this cycle — is untested in a recessionary period,” and “demand there could be more volatile.”

    The equity upswing

    Following the stock market freefall late last year, Boston Properties’ share price has risen 25 percent since Jan. 1, trading at about $136 as of April 24. Within the past 12 months, the firm’s stock hit a high of nearly $140 and a low of just under $108 a share.

    In the same period, Vornado was trading at half the value while SL Green was at nearly $90 a share, with a high of about $107 and a low of just under $77.

    Boston Properties — which brought in $2.7 billion in revenue last year (on par with its development figures) — also has a higher growth estimate, at 9 percent, compared to 5 percent for Vornado and 3 percent for SL Green, according to financial services provider BMO Capital Markets.

    Analysts pointed to several reasons why the REIT has been outperforming two of its major competitors. Moody’s, which gave Boston Properties a stable outlook in its latest report on the REIT, cited a diverse tenant base, strong liquidity and a high-quality office portfolio in several major markets.

    But Alex Goldfarb, a senior REIT analyst at Sandler O’Neill & Partners, said Boston Properties is in a stronger position than Vornado and SL Green because its leadership team laid out a detailed growth strategy two years ago and has rigorously stuck to it. “They’re focused on growing the common dividend and growing earnings,” he said.

    Goldfarb added that he’s also impressed by how self-sufficient the company has been in recent years. “They have not sourced external capital — equity capital — and yet they’re delivering on several billion [dollars] of projects,” he said, noting that the REIT has been able to self-fund through asset sales and that its last common equity raise was in 2010.

    Kibel of Moody’s said any disruption to the company’s growth would likely have to come from a consequential downturn or another major market event.

    Thomas said he expects a recession to hit at some point but doesn’t think it’s as imminent as others are forecasting. He added that his firm is well prepared for that because it’s not overleveraged and its existing portfolio is already about 90 percent leased, with average lease lengths running more than five years.

    “This recovery has gone on for a long time, but I would also say that economic cycles are not on a fixed clock,” Thomas said. “It’s not like the bell goes off and the recession occurs.”

    Big on Brooklyn

    Boston Properties’ biggest ongoing project in New York is Dock 72 on the Brooklyn waterfront, its first Brooklyn property. The REIT is co-developing the 675,000-square-foot office building with Rudin Management and the We Company’s WeWork, which will also be the anchor tenant with a 220,000-square-foot lease.

    Rudin Management’s Michael Rudin said the partnership came about because of a few chance encounters his father, Bill, had with Zuckerman at industry events. The two realized they were both interested in building an office property on the same site and began discussing a plan to work on it together.

    Dock 72

    The $400 million-plus project, which broke ground in 2016 and is scheduled to open before the fall, marks the first time Rudin Management has partnered with Boston Properties — or with any REIT, for that matter.

    “It’s not the most natural or common partnership, but despite their structure [as a public company], they have a very long-term perspective on the business and on their assets,” Rudin noted. “That, for us, is very important, and it’s part of what made us comfortable proceeding with a deal.”

    WeWork is the only lease at Dock 72 the companies are ready to announce so far, Rudin said. While the co-working giant has attracted its fair share of skeptics, he said he’s confident it will be a good anchor tenant for the building.

    “People either love them or hate them and are fully bought in or not bought in at all,” Rudin said. “But we are firm believers that they bring value to a project and a property and will enhance the offering that we have at Dock 72.”

    John Kim, a BMO Capital managing director, was more skeptical about the ground-up development, saying the Brooklyn Navy Yard is untested as an office market and lacks access to public transportation. He said the fact that WeWork is still Dock 72’s only announced tenant may be a sign that demand for space in the building is not that strong, which could prove to be an unusual situation for Boston Properties.

    “Once it’s physically complete and WeWork moves in, maybe it gets some momentum after that,” Kim said. “But that’s been an outlier within their portfolio.”

    Thomas maintained that plans for Dock 72 are proceeding smoothly and said the building’s large, open floors should help attract tech and media companies. Boston Properties is a big proponent of co-working and WeWork specifically, he added, calling the business model a perfect fit for large property owners that struggle to lease space to individuals and small companies.

    “They aggregated that demand and then created more traditional leases for landlords like ourselves,” he said. “I think that’s been a big positive for the business.”

    Boston Properties even launched its own co-working brand, called Flex by BXP, which now occupies a floor in Boston’s Prudential Center. The REIT hopes the new venture will give smaller tenants room to grow so they sign longer-term leases once they get big enough. If that effort proves fruitful, Flex could expand to other cities going forward, Thomas said.

    Co-working aside, Craig Caggiano, executive director for the tri-state region at Colliers International, said he’s somewhat concerned about Brooklyn’s office market being oversaturated with new projects. Colliers teamed up with WeWork last year to help find tenants for Dock 72 but declined to comment on the project specifically.

    Caggiano, however, said a big question looming over the Brooklyn office market as a whole is where is the “demand going to come from to fill this space?”

    A recent Colliers report found that more than 7 million square feet of office space in the borough consists of ground-up or newly renovated construction expected to hit the market over the next three years. Other large office projects in the works on the west side of Brooklyn include Heritage Equity and Rubenstein Partners’ 25 Kent and JEMB Realty’s One Willoughby Square.

    Franklin Wallach, a senior managing director in Colliers’ research group in New York, said most of that space should eventually get leased, but it could take a while with so much inventory coming to Brooklyn in such a short time span.

    “It will get filled,” Wallach said of the ample supply of new buildings. “It’s just going to take time.”

    Beyond New York

    While Thomas and his associates are no strangers to the New York market, their biggest footprint, perhaps not surprisingly, is in Boston. Including the Prudential Center, where the firm is based, the REIT  owns 46 office buildings in the city totaling more than 13 million square feet. It also has significant holdings in San Francisco, Los Angeles and Washington, D.C.

    Vornado has long invested outside of New York as well, but that accounts for just 11 percent of its income today, compared to 73 percent for Boston Properties, per Moody’s.

    In its latest note on Boston Properties, the ratings agency actually singled out New York as a weak spot, citing persistent “leasing challenges” with its Manhattan holdings and, to an extent, its office properties in D.C. Kibel said the firm’s rent increases in New York have been much weaker than the rest of its portfolio.

    Thomas said the new supply of office space in Manhattan in recent years has put more pressure on rents. “If you go to Boston, San Francisco and Los Angeles, those markets have performed better,” he said. “Their rents are growing at a faster clip.”

    The CEO added that financial and law firms were major growth engines prior to 2008, and while both industries are still vital to office leasing, he now sees more potential with tech, life sciences and co-working companies — which are less Manhattan-centric.

    Eric Anton, an investment sales broker at Marcus & Millichap, singled out Boston and San Francisco as two prime markets for the firm to operate in these days, given the number of tech and biotech tenants in both cities. He said real estate owners that have invested in those two markets along with New York over the past five years are likely doing better than the ones that put all of their chips on New York.

    Los Angeles, on the other hand, was more of a curious choice for Boston Properties, BMO Capital’s Kim said. The city, in general, suffers from limited opportunities to build new office space, due to strict zoning requirements, and the REIT’s initial entry into the area “raised some eyebrows,” he said.

    “It was a new market for them in a very competitive environment and seemingly without the development potential,” Kim added. “Investors questioned how expensive it would be for Boston Properties to achieve scale in this market.”

    But the REIT is in a better position in L.A. after teaming up with other investors to buy Colorado Center and Santa Monica Business Park from the Blackstone Group in 2016 and 2018 for $1.1 billion combined.

    “The leasing has been successful, and there are some pretty significant redevelopment opportunities” with those properties, Kim said.

    While expanding to other cities is not a priority in 2019, Thomas said, he and his colleagues always have an eye on new markets. He named Seattle as an intriguing possibility going forward.

    “Most of the big tech companies all have pretty big positions in Seattle, so it’s a strong growth market from a demand standpoint,” he said. “The state of Washington has no income tax, at least for now. That’s probably a positive as well.”

    This story was updated to clarify that Colliers was discussing the Brooklyn office market in general, not Dock 72 specifically.

  • Adam Pogoff

  • In the second episode of The Real Deal‘s new series “Brokers In Cabs,” the Corcoran Group’s Sydney Blumstein talked about agent gossip, how a dating competition in her rental broker days led to gobs of new business, the appeal of first-time homebuyers, and why she thinks many developers are three years behind the curve and out of touch with buyers.

    Blumstein, a New York native who works with her parents on the Blumstein Team, has eight active listings, including a cast-iron building in Tribeca for $17.5 million.

    Check out the video above!

    Know of a broker who should be featured? Email James Kleimann at james@therealdeal.com.

  • Erin Hudson

  • Blackstone's Jon Gray (L), Colicchio's Phil Colicchio (R) and Skyview Mall

    Blackstone’s Jon Gray (L), Colicchio’s Phil Colicchio (R) and Skyview Mall

    Blackstone Group is sinking its teeth into Flushing’s dining scene with a new food hall.

    The development of the concept is being led by Colicchio Consulting, a boutique firm that brokers food & beverage deals between property owners and its in-house network of top chefs and restauranteurs.
    Phil Colicchio, the firm’s executive managing director, said the new Flushing food hall at the Shops at Skyview would span 30,000 square feet and feature upscale “chef-driven” and “fast-cash” eateries.
    “It’s going to be a game changer,” he said in an interview at the International Council of Shopping Centers’ annual four-day convention in Las Vegas.
    Blackstone confirmed a food hall was in the works at the center, but a source familiar with the project noted that the size was “still to be verified.”
    Colicchio’s firm is hired by owners to design, structure and curate food-and-beverage service deals. Their clients include Blackstone, Tishman Speyer, Simon Property Group and Jeffrey Soffer’s Fontainebleau Miami Beach.
    The consultancy was acquired by Cushman & Wakefield in November and Colicchio and his partner, Trip Schneck are now co-chairs of the commercial brokerage’s new F&B, entertainment and hospitality practice. According to Schneck, all new deals will go through their newly-formed group within the brokerage, but the Skyview project pre-dates the acquisition.
    The Skyview complex is owned and operated by Blackstone affiliate ShopCore Properties. Blackstone acquired the shopping center and an adjacent parking garage for $400 million in 2015. It was the real estate giant’s first project in Queens at the time.
    Colicchio is the cousin of acclaimed celebrity chef Tom Colicchio, who is also part of Colicchio Consulting’s network of chefs. Phil Colicchio also represents award-winning chefs such as April Bloomfield, Todd English and José Andrés.
    Colicchio said the inspiration behind Skyview’s food hall is chef George Chen’s China Live marketplace, which opened in San Francisco’s Chinatown in 2017.
    He noted that the design will accommodate performance spaces and programming for nightlife, too. (Grammy-winning musician Gabe Witcher is also one of Colicchio’s partners and works on designing the entertainment components of their projects.)
    “Frankly giving young people something to do at night” in Flushing is one of the new food hall’s primary goals, Colicchio said.
  • Ashley McHugh-Chiappone, David Jeans and Rich Bockmann

  • Clockwise from left: Ben Ashkenazy, 711 5th Avenue, Wafra CEO Fawaz Al-Mubaraki, and Nightingale Properties' Elie Schwartz (Credit: Google Maps; Wafra)

    Clockwise from left: Ben Ashkenazy, 711 5th Avenue, Wafra CEO Fawaz Al-Mubaraki, and Nightingale Properties’ Elie Schwartz (Credit: Google Maps; Wafra)

    Ashkenazy Acquisition Corp. is joining Nightingale Properties and the Wafra Group on their $907 million bid to buy the Coca-Cola building on Fifth Avenue.

    Ben Ashkenazy’s investment firm, a major player in high-street retail is putting $50 million worth of equity into the deal, sources told The Real Deal.

    Elie Schwartz and Simon Singer’s Nightingale Properties teamed up with Wafra Group – the investment vehicle owned by Kuwait’s Public Institution for Social Security pension fund — to buy the trophy property at 711 Fifth Avenue from the Coca-Cola Company for $907 million.

    Wafra is putting $140 million into the deal as preferred equity, and Nightingale is putting in $10 million, sources told TRD. The partners are looking for about $800 million in debt to fund the acquisition and cover closing costs.

    Representatives for Ashkenazy Acquisition and Wafra Group could not be immediately reached for comment. A representative for Nightingale Properties declined to comment.

    The partners’ acquisition of a prime corner on Manhattan’s premiere shopping strip is penciling out as something of a high-wire act.

    At $800 million in debt, the deal works out to more than 88 percent loan-to-value for the 345,000-square-foot retail and office building. Nightingale, Ashkenazy and Wafra are working on a plan to lower their basis by getting tenants Ralph Lauren and Breguet to buy out their pricey retail leases.

    While the three partners have a contract to buy the property, sources said they weren’t the highest bidders on the deal.

    An unidentified, high-net-worth individual put in a bid of $975 million, according to a source familiar with the bid process. And a partnership of Michael Shvo and Jeff Sutton – backed by a group of German pension funds – bid at $955 million.

    RFR Realty’s Aby Rosen is also said to have bid on the building, though he came in lower than Nightingale at $900 million.

    Representatives for Shvo, Sutton and Rosen could not be immediately reached.

    A Cushman & Wakefield team of Doug Harmon and Adam Spies is negotiating the sale on behalf of the Coca-Cola Company. Their Cushman colleagues Gideon Gil and Rob Rubano are working to secure a debt package for the buyers.

  • Eddie Small

  • Madison Realty Capital's Josh Zegen and the Broadway Triangle (Credit: Google Maps)

    Madison Realty Capital’s Josh Zegen and the Broadway Triangle (Credit: Google Maps)

    Madison Realty Capital has provided a $50 million mortgage for a condominium project in Brooklyn’s Broadway Triangle, the firm announced on Wednesday.

    The money is for developer Abraham Brach’s project, addressed at 58 and 66 Gerry Street and 25 and 33 Bartlett Street. The property includes a nearly finished condo project with two adjacent seven-story buildings and ground-floor retail, an office building spanning about 7,500 square feet and a vacant residential development site. Brach is developing the project with Parkview Management.

    Madison’s financing will be used to retire the existing debt on the development, finish work on the condo project and cover all development costs. Galaxy Capital brokered the deal.

    The condo project at 58 Gerry Street and 25 Bartlett Street will feature 41 units across about 80,000 square feet. It will also include 21 parking spots and nearly 13,000 square feet of retail on the ground floor and cellar. Construction should be done by the end of the year.

    The property features a 10,000-square-foot vacant lot at 66 Gerry Street as well, which could house another residential project.

    Brach could not be reached for comment.

    The site was the last remaining piece of Pfizer’s former headquarters, and Brach bought it more than two years ago for about $27.5 million. Parkview’s Juda Klein previously described the development to The Real Deal as “upscale religious housing” for the Orthodox Jewish community.

    Brooklyn’s Broadway Triangle will also be home to a controversial eight-building development from Simon Dushinsky and Isaac Rabinowitz’s Rabsky Group. Several community groups had sued over the project, saying the market-rate apartments it would bring would discriminate against people of color, but the suit was dismissed last year.

  • Mary Diduch

  • From left: 275 West 10th Street, 781 Fifth Avenue and 64 East 7th Street

    From left: 275 West 10th Street, 781 Fifth Avenue and 64 East 7th Street (Credit: Google Maps)

    The sale of two ultra-luxury pads at Vornado Realty Trust’s 220 Central Park South — to two fairly similar Luxembourg-based companies — wasn’t the only New York City residential sale that caught our eye this week. Other top deals include the sale of a townhouse in the East Village that dates to the late 19th century and a sponsor unit at The Shepherd condominium in the West Village.

    Source: A TRD review of public records filed with the New York City Department of Finance from May 15 to May 22.

    1.) An entity tied to William N. Joy shelled out about $15.75 million for a four-story townhouse at 64 East 7th Street in the East Village. Joy appears to be the principal of a Florida-based investment firm Water Street Capital Inc. The 7,500-square-foot, 25-foot-wide home comes with five fireplaces and a rooftop garden, according to its StreetEasy listing. It was originally asking $18 million, and Ron Teitelbaum had the listing. The sellers were two trusts and Lisa J. Fox.

    2.) Frank Roessler, founder of multifamily investment firm Ashcroft Capital, bought a sponsor unit at 275 West 10th Street— also known as the Shepherd condominium — for roughly $9.9 million, according to records. The deal pencils out to $3,322 per square foot. The Naftali Group, the private real estate development and investment firm founded by Miki Naftali, renovated the 12-story building, which dates to 1896. Stribling originally listed the six-room, 2,995-square-foot unit for $10.25 million in July 2018, according to StreetEasy. Penthouse B remains on the market for $23.95 million after seeing its price drop from $24.5 million.

    3.) Park Suite Hotel, Inc., whose president is listed as attorney Jeffrey Wacksman, a partner at Loeb, Block & Partners, bought back a co-op at the Sherry Netherland, located at 781 Fifth Avenue, for $5 million. The entity had first sold the two-bedroom apartment on the 23rd floor to seller AHST 71 LLC for the same price just last fall. And also in the fall, Park Suite Hotel bought Howard Lorber’s former pad on the 30th floor for $11 million.

  • Kathryn Brenzel

  • From left: 110 Greenwich Street, and Hersel Torkian of Torkian Group, and Mayor Bill de Blasio (Credit: Getty Images and Google Maps)

    From left: 110 Greenwich Street, and Hersel Torkian of Torkian Group, and Mayor Bill de Blasio (Credit: Getty Images and Google Maps)

    The Torkian Group has agreed to pay the city $300,000 to settle claims that the landlord wrongfully marketed and leased illegal short-term rentals at three of its buildings.

    The agreement, finalized on Tuesday, settles allegations against the landlord but not the individuals who were accused of running a scheme through altered listings at Torkian properties on Airbnb, HomeAway and TripAdvisor.

    David Tordjman (Credit: LinkedIn)

    David Tordjman (Credit: LinkedIn)

    As a condition of its settlement, Torkian must cooperate with the city against other defendants in the lawsuit — including Bedrose, Bedrose broker and former Norman Bobrow and Co. executive vice president David Tordjman and Yohan Atlan, a tax accountant — and ensure that no more apartments are leased illegally. (In New York, landlords are barred from renting apartments for fewer than 30 days in homes where the host is not present.) Bedrose, Atlan and Tordjman are also banned from the buildings as part of the deal with the city.

    “Today’s settlement is a victory for the city and further proof that owners who cash rent checks while turning a blind eye to illegal activity can and will be held accountable,” Christian Klossner, executive director of the city’s Office of Special Enforcement, said in a statement.

    Representatives for Torkian said it didn’t have any “involvement whatsoever with any alleged illegal activity perpetrated by certain tenants.”

    “The Torkian Group is pleased to have amicably resolved all claims with the City of New York with respect to alleged transient use violations without conceding any liability, without any finding of illegal conduct against the Torkian Group, and avoiding further unnecessary litigation costs,” Torkian’s Michael Kirkwood said in a statement.

    According to the January lawsuit and subsequent court filings, there were 1,096 short-term rental deals in the landlord’s buildings between February 2015 and October 2018. The transactions involved 17 different apartments at 110 Greenwich Street, 311 West 50th Street and 488 Seventh Avenue, which generated more than $1.1 million in revenue, according to the complaint.

    The lawsuit accuses Bedrose, Atlan and Tordjman — referenced as the operator defendants — of illegally advertising units at the Torkian buildings as well as other properties. They allegedly hid their illegal short-term rental business in various ways, including using fake host names on Airbnb and changing the addresses of the buildings slightly. In some cases, guests were instructed to sign fake leases and lie to city officials if questioned about the terms of their stay at the apartments, according to the complaint.

    An attorney for the operator defendants couldn’t immediately comment on the case. When reached by phone, Tordjman declined to comment.

    In addition to the $300,000 settlement, Torkian has paid the bulk of $120,000 in civil penalties imposed at its three buildings, city officials said.

  • Maya Rajamani

  • Clockwise from top left: Former NFL Pro Bowler Matt Birk’s Greenwich home heads to auction, Dressbarn to shutter stores in Westchester and Fairfield counties as the women’s fashion retailer winds down its business (credit: Dwight Burdette), a corporate benefits consultant moving from Stamford to Norwalk, and Chicago-based firm opens second East Coast office in Westport.

    Former NFL All-Pro Matt Birk’s Greenwich home heads to auction
    In what has been billed as an increasingly popular alternative to more traditional listings, former National Football League center Matt Birk’s Greenwich home is hitting the auction block, Patch reported. Birk bought the home at 26 Cobb Island Drive for $3.85 million in 2014, a year after the former All-Pro retired from the NFL, so he could get sacked for a loss when the property near Cos Cob Harbor heads to auction on June 1 with bids starting at $3.25 million. The 8,400-square-foot home, which was recently redone, has a swimming pool and a balcony. The news comes amid reports that luxury homeowners in Greenwich are increasingly taking price cuts on their homes — a notion that local residential brokers have pushed back upon — by turning to auctions or renting out their homes. The Greenwich Time reported that Avon-based Professional Real Estate Auctions will handle the auction of Birk’s home. Auctions can “accelerate the sale of your property by generating additional consumer interest and activity,” PREA managing partner Michael Pelzar told the outlet. Birk, a Harvard graduate who lost 75 pounds after leaving pro football behind, previously listed his Greenwich home for its $3.85 million purchase price in 2016. [Patch]

    Dressbarn, retailer with Stamford roots, to close its doors for good
    A rough year for retailers got worse this week as Dressbarn, a seller of women’s clothing that has its roots in Stamford, announced this week that it would end operations and close all 660 of its stores. Among those outposts being shuttered are Dressbarn locales in Fairfield and Westchester counties, including stores in Danbury, Greenburgh, Norwalk, Pelham, Port Chester, Scarsdale, Shelton and Thornwood, according to the Daily Voice Plus. It wasn’t immediately clear when the stores would close, but Dressbarn CFO Steven Taylor said in a statement that the chain would “work to assist our associates through the transition and maintain existing relationships with our vendors, suppliers and other key stakeholders through this process.” Taylor noted that Dressbarn the company “has not been operating at an acceptable level of profitability in today’s retail environment.” Melville, New York-based A&G Realty Partners has been hired by Dressbarn to assist it on “real estate-related matters,” the company said. Dressbarn, as noted by The Real Deal, is owned by Mahwah, New Jersey-based Ascena Retail Group, which also controls the Ann Taylor, Catherines, Cacique, Justice, Lane Bryant and LOFT brands. [TRD]

    Boston-based firm looks to sell Norwalk office building
    The Davis Companies, a Boston-based real estate investment firm, is looking to sell an office building in Norwalk, according to the Stamford Advocate. Davis bought the approximately 150,000-square-foot building at 40 Richards Avenue for $16.5 million in 2013 from Jersey City-based Mack-Cali Realty. The company has since carried out $6 million in renovations at the property, which is home to more than two dozen companies, including Fairfield County’s Community Foundation and Potoo Marketing, the Advocate reported. Davis has parted ways with several properties in the Fairfield area in recent years, including the $18.75 million sale of the Westport Center for Health in February. Davis, which has hired Cushman & Wakefield’s capital markets group to market its Norwalk office building, did not disclose how much it is seeking for the property. [Stamford Advocate]

    Amid US-China trade tensions, Yonkers resi project debuts
    Representatives from Strategic Capital and Yonkers officials gathered in the city last week for a ribbon-cutting at the River Club at Hudson Park, a 213-unit luxury rental building, the Daily Voice Plus reported. Strategic Capital is the investment arm of China Construction America, itself a unit of Chinese construction giant China State Construction Engineering Corporation. The River Club’s official opening was hailed by the Chinese state-run news agency Xinhua as a sign of U.S.-China cooperation at a time of heightened tariff tensions between both countries. The River Club, located at 63 Wells Avenue, overlooks the Hudson River and began leasing earlier this year. Studio, one- and two-bedroom units are asking between $1,720 to $2,870 a month. The River Club is just one of several residential projects to debut this spring in Westchester County. The DVP also reported that a luxury senior living facility dubbed the Club at Briarcliff Manor is poised to open its doors to residents within the next few weeks. And in Mamaroneck, the Mason M.V.S. complex, which includes 96 rental apartments and four rental townhouses, has begun leasing as well, LoHud reported. Fifteen units in that complex are already occupied, according to the outlet, which also noted the recent opening of Stratus on Hudson, a 74-unit luxury apartment complex in Yonkers. [DVP]

    Chicago-based CRE firm Mag Mile sets up shop in Westport
    Mag Mile Capital, a commercial mortgage and real estate firm formerly known as Aries Conlon Capital, is opening an office in Westport. The Chicago-based firm said in a press release that its office on Post Road West will be its second on the East Office. Mag Mile, which is led by CEO and principal Rushi Shah, already has an office in Manhattan. “Westport is home to numerous [private equity] firms that play in both the debt and equity space and we’ll look to leverage these local relationships while continuing to maintain our New York presence,” said a statement from Rob Bernstein, Mag Mile’s executive vice president of capital markets and originations, who will head the office and the firm’s presence in New York City. [Mag Mile Capital]

    Corporate benefits consultant moving from Stamford to Norwalk
    CBP is leaving Stamford — but it isn’t going far. The corporate benefits consultant plans to move its current office at 1100 Summer Street to 535 Connecticut Avenue in Norwalk, the Stamford Advocate reported. CBP, which is now part of the Alera Group as a result of a 2017 merger, will be leasing approximately 10,000 square feet of space in the building for eight years, according to the Advocate. Norwalk offered a more central location for CBP’s employees than Stamford did, the consultant’s head of operations, Rosa Torcasio, told the outlet. “We toured quite a few locations in Norwalk, but 535 Connecticut Avenue offers a cafe, workout facility and transportation to and from the train station, which was a very important factor for us during the decision making process,” Torcasio said in an email. The Real Deal noted in March that 535 Connecticut Avenue had brought on Best Friends Pet Care as a tenant, a move that came only a few months after Hanover Norwalk Investors scooped up five floors in the building. [Stamford Advocate]

    Hudson Valley Wine Village, a $273M development, pops cork
    The centerpiece of a proposed $273 million mixed-use project north of Westchester in Ulster County took a big step forward earlier this month after eight years of planning, according to the Times-Herald Record of Middletown. The Hudson Valley Wine Village, a 437-acre site located between the Hudson River and Route 9W in the town of Lloyd, near Poughkeepsie, secured from the U.S. Army Corps of Engineers and New York State officials a series of approvals allowing it to proceed on the site of the former Hudson Valley Winery. Set to be built over 15 years, marketing materials for the development state that it will include a 140-room hotel, 800 residential units, 450,000 square feet of light industrial space and 155,000 square feet of office and commercial space. The project’s backers claim that it will provide employment for 2,000 people. “These are changing times in the economic development landscape of the Hudson Valley and this project… is shovel-ready, fully-entitled and we are in an environment that not only encourages, but welcomes opportunities for new job creation and tax ratables,” said a statement from Hudson Valley Wine Village COO Andrew Maxon. [Times Herald-Record]

  • David Jeans and Erin Hudson

  •  

    On the descent into the Wynn Hotel and Resort’s Intrigue nightclub, brokers and real estate folk were greeted by two people dressed in kaleidoscopic mirror-glassed suits, one on stilts, the other balancing on an oversized gym ball while juggling batons.

    “It’s like the real estate market on steroids,” said Sam Viskovich, Reonomy’s vice president of marketing, who was attending the party hosted by Marcus & Millichap, and is a first time attendee of the International Council of Shopping Centers’ annual four-day convention in Las Vegas.

    But despite the raucous reputation of the convention’s party scene known in previous years, the 2019 events were significantly more tempered. At the same Marcus & Millichap event in 2018, people dressed as trees and walking on stilts meandered through the club while dancers took the spotlight on podiums.

    For longtime ICSC veterans like Kazuko Morgan, vice chairman of retail at Cushman & Wakefield in California, excess at the convention has largely been replaced by early mornings at the gym and mellower affairs.

    “People in general are much more…I don’t want to say sedate. It’s just different,” she said. “Now, it’s curated cocktails with caviar,” a small, carefully-selected guest list, and a number of people claiming to be heading to SoulCycle at the Wynn for an early morning spin, according to Morgan.

    It’s a stark contrast to previous years, according to Morgan, who recalled lavish parties with “women coming out of champagne glasses.”

    While the retail market has been suffering, attendees attributed the toning down of the convention’s party circuit to a scaling back on spending by firms in the wake of the 2008 financial crisis, and bans on events hosted by title insurance companies, Morgan said. The title industry has been known for its wining and dining of clients, and in New York, the state recently moved to ban those companies from treating their clients to entertainment and meals.

    After the pool parties kicked off on Sunday, thousands of people scuttled across the strip to various events. About 70 people attended CIM Group’s bowling tournament at the Brooklyn Bowl in the LINQ casino. Others attended dinners before heading home for an early night.

    But these events were not without a handful of extravagant exceptions.

    CoStar’s party at Kaos Nightclub in the Palms casino was the talk of the convention, where the data giant put on a full-blown concert with Vegas-born rock band Imagine Dragons. At Marcus & Millichap’s event, the top-40 playlist blasting across the club’s artificial lagoon was enough to lure some brokers and real estate folk onto the dance floor, before the lights flashed on at just before midnight, signaling that it was time to go home.

    After a jam-packed day on the convention floor Monday, parties again took off. Newmark Knight Frank threw its annual show at Marquee Nightclub in the Cosmopolitan casino. The flashy event stood in stark contrast to the goings-on several floors up in the same hotel, where Avison Young and Lee & Associates had leased a four-story apartment – complete with staged bedrooms and a hot tub overlooking the Las Vegas strip – for its party.

    As the hot tub gurgled in the unusually cold Vegas night, one broker debated how to spend the hours before his 6 a.m. flight back to New York.

    “I can’t sleep,” he said, before ultimately deciding to head to a 2 a.m. Chainsmokers concert.

  • Kathryn Brenzel

  • Joseph Strasburg of the Rent Stabilization Association (Credit: iStock)

    Joseph Strasburg of the Rent Stabilization Association (Credit: iStock)

    With less than a month until New York’s rent regulation laws expire, a real estate trade group plans to float reforms to a controversial program as an alternative to its elimination.

    The Rent Stabilization Association plans to propose changing the reporting requirements surrounding Individual Apartment Improvements, a program that allows landlords to increase rent on a regulated apartment they’ve renovated.

    RSA president Joseph Strasburg hasn’t yet discussed his suggested reforms with legislators but told The Real Deal that the RSA has internally discussed putting some on the table. One of his suggestions is to mandate that a licensed professional certifies the cost of a stated IAI and that it was properly completed. A landlord would also have to sign the certification, which would be filed with either the state’s housing regulator, the Department of Homes and Community Renewal, or another auditing agency, Strasburg said.

    “Most people are not going to certify work done and lose their license,” he said.

    Under such a proposal, those “stupid enough” to falsify such certifications would face criminal penalties, he said. He also suggested capping how much landlords could spend on the renovations based on the length of the previous tenancy.

    Bills in the state Senate and Assembly seek to eliminate the program entirely, alongside other proposed legislation that would do away with Major Capital Improvements (MCIs), vacancy bonuses and vacancy decontrol. Another measure would ramp up eviction protections statewide, known as “good cause eviction.”

    “Many people believe that [IAIs] should be repealed entirely as part of a much stronger set of laws protecting tenants, and I’ve sponsored a bill that would do just that,” Senator Brian Kavanagh, who chairs the Senate’s Housing Committee, said in a statement. “That said, if the RSA or any other interested party wants to make suggestions about ways we should change the laws, they’re welcome to do so.”

    In a previous interview with TRD, Kavanagh indicated that landlord groups were mostly focusing on the survival of these programs rather than suggesting ways to improve them.

    Both city and state housing agencies — respectively, the Department of Housing Preservation and Development and HCR — have shown support for reforming (rather than eliminating) MCIs and IAIs, stressing the importance of balancing tenant protections with ensuring that landlords continue to invest in their properties. While landlords must receive approval from HCR for MCIs, landlords aren’t required to apply for IAIs or provide any documentation that the work done to increase rents was actually completed. Over the years, this has led to allegations of abuse of the program.

    The state’s rent laws are set to expire June 15. The Senate has two more public hearings scheduled on rent regulation and tenant protections in Albany and Newburgh. At the same time, the city is awaiting final proposals from the Rent Guidelines Board, which will vote on June 25 on whether or not rent stabilized apartments should face rent increases. In a preliminary vote earlier this month, the board favored an increase of .5 to 2.75 percent for one-year leases and a 1.5 to 3.75 percent hike for two-year leases for both rent-stabilized apartments and lofts.

     

  • E.B. Solomont

  • (Illustration by Neil Webb)

    It was early January — just weeks after President Trump’s tax bill went into effect — when Colby Gaines, a producer of the reality TV show “Pawn Stars,” approached his wife with a radical idea. The couple, he said, should move from New Jersey back to his native Texas, where they could save $500,000 a year on taxes.

    “It was just so stark,” said the founder of Back Roads Entertainment. “It’s undeniable to anyone who understands basic economics.”

    In May, the couple paid just over $4 million for a Spanish-style house in an upscale neighborhood in Austin, and listed their custom-built home in Westfield, New Jersey, for $6.95 million. The movers are scheduled for August.

    After years of wooing businesses and wealthy residents, states like Texas and Florida are having a moment: The promise of warm weather, zero state income tax and relatively low property taxes is drawing a wave of Wall Street investors, real estate executives and other wealthy residents from New York and the tri-state area.

    The boost for these states can be traced back to the Tax Cuts and Jobs Act, which was enacted in December. While taxpayers were previously allowed to write off all of their property taxes by deducting the lion’s share of their state and local taxes from their federal tax bill, those so-called SALT deductions are now capped at just $10,000.

    While the Trump administration has touted the tax reform package as a way to spur job growth, those who live in areas with high property taxes (and many of the elected officials who represent them) feel otherwise.

    New York Gov. Andrew Cuomo has said the cap on the SALT deduction would “destroy” New York, which has one of the highest property tax rates in the country.

    In all, some 8.3 percent of taxpayers in New York are bracing for a tax hike, according to an analysis by the nonpartisan Washington, D.C.-based think tank the Tax Policy Center. Ten percent of New Jersey taxpayers — who already pay the highest property taxes in the U.S. — can expect to see their bills rise, followed by Maryland and Washington, D.C. (with 9.4 percent of homeowners seeing a tax jump) and California (with 8.6 percent).

    And for some, moving to a lower-tax state makes the most financial sense.

    Corcoran CEO Pam Liebman told the Wall Street Journal last month that she was aware of 15 buyers in the New York area doing just that. “Wherever they live they are putting their properties on the market,” she told the publication.

    Douglas Elliman’s Richard Steinberg, a licensed agent in New York and Florida, noted that there is good reason for these relocations. “You can save a million [dollars] a year,” he said. “That’s real money.”

    New Yorkers no more

    For years, real estate bigwigs like Howard Lorber, Kevin Maloney and Barry Sternlicht have worked (and played) in Miami.

    Maloney, founder of Property Markets Group, has been known to fly himself to and from Miami, where he spends half the week. Meanwhile, Lorber’s Vector Group — Elliman’s parent company — is headquartered in Miami, and the brokerage chief owns several properties in the Sunshine State.

    Lorber, a long-time Trump friend and backer, declined to comment for this article, but he’s previously predicted that “the city will not have a mass exodus” as a result of changes to the SALT deduction.

    But for some — like Sternlicht, asset manager Eddie Lampert and hedge funder Paul Tudor Jones — the migration began three years ago, when Connecticut enacted sweeping changes to its tax code that impacted financial firms.

    In 2016, after paying $17 million for a waterfront property in Miami Beach, Sternlicht officially became a Florida resident. His Starwood Capital Group — which moved its headquarters to Stamford, Connecticut, from Westchester in 2012 — in April designated Miami as its mothership. The company is keeping an office in Greenwich but is currently developing a new headquarters in Florida, set to open in 2021. (Sternlicht still appears to own a sprawling Greenwich estate, which he bought in 2005, according to public records.)

    “You can’t give away a house in Greenwich,” Sternlicht said in 2016, referring to the tony enclave that’s home to major financial firms and their executives. “We got too close to the Manhattan tax rates.”

    While the new federal tax policy actually favors the wealthy and corporations — the top corporate tax rate will sink to 21 percent from 35 percent, the alternative minimum tax (AMT) will hit far fewer people, and the estate tax exemption doubled — those living in high-property-tax states will see much of the personal relief they get offset by the new SALT cap.

    In mid-June, Elliman’s Oren Alexander said the Miami market had more action in the prior 45 days than it did in the previous two years. “I think the amount of activity we’ve seen is also just beginning,” he said.

    His theory is that in April, when everyone cut 2017 tax checks to the IRS, they realized how much money they could save by living in Florida.

    And while there is not a widespread exodus of New Yorkers fleeing the area, those calculations have translated into action — at least for some.

    I Squared Capital’s Sadek Wahba and Adil Rahmathulla are relocating from New York to Miami.

    Meanwhile, AQR Capital’s Cliff Asness bought a penthouse at 321 Ocean in South Beach for $26 million in May. The same month, AQR’s John Liew picked up a $13.5 million condo at the Apogee. Both of those are said to be second homes, but ones for which the owners will pay far lower property taxes than they would for condos in New York.

    In addition, just before the tax law was passed, Glenwood Management’s Howard Swarzman plunked down $10.3 million for a condo at the Four Seasons Private Residences at The Surf Club in Miami Beach. And in May, developer Richard Ruben bought a $5.8 million unit in the building.

    While it’s unclear if those are relocations or vacation homes, the already hot New York-to-Miami corridor seems to be stronger than ever.

    Elliman’s Steinberg — who owns a home in Palm Beach — pointed out that Miami is increasingly becoming a financial hub.

    Florida gained 14,700 financial services jobs during the 12 months that ended in April, according to Bloomberg. By comparison, Connecticut lost 500 similar jobs during the same time. And according to local brokers, office tours have spiked.

    In addition to I Squared, which plans to open a Miami office, Stonepeak Infrastructure Partners — founded by ex-Blackstone executives — is reportedly opening an office in Austin, according to an investor memo that touted the move as a potential tax protection for executives.

    In New York, Nest Seekers International’s Ryan Serhant said he sold 10 apartments this spring for clients moving out of state because of high taxes.

    The “Million Dollar Listing: New York” co-star is currently marketing a $10 million Soho apartment for one-time snowbirds who decided to make Florida their full-time home.

    He said his clients don’t need to sell — or necessarily want to — but the math of keeping the Manhattan apartment no longer adds up.

    “It’s kind of like, the numbers don’t lie now,” said Serhant, who added that their decision to list in the middle of the spring (rather than at the beginning of fall or early spring) speaks volumes. “To be [listing] now is obviously, in part, because they’re thinking about their tax situation,” he said.

    Despite the anecdotal buzz, these moves haven’t yet made a dent in property values.

    “It’s a little too soon,” said real estate appraiser Jonathan Miller, noting that the softer New York market could be related to a variety of factors, like rising interest rates and general economic uncertainty in addition to tax reform.

    And Elliman’s Steinberg pointed out that it’s not easy to just uproot to Florida or Texas. “When you derive your income in New York City and New York state, you can’t get around it,” he said.

    Stuart Saft, who heads Holland & Knight’s New York real estate practice group, agreed. New Yorkers are still able to claim an AMT deduction, he said. And it’s extremely difficult to work in New York and avoid paying taxes here.

    “You have to be out of the state 185 days a year, and the state counts it if you were in New York for 35 seconds for a day,” he said. “So you really have to give up being a New Yorker if you’re going to do that.”

    Workaround wishes

    Whether they’re willing to relocate or not, wealth advisors have been sniffing out workarounds for clients balking at the higher tax bills they’re facing.

    One option gaining favor among estate planners involves non-grantor trusts. This essentially means putting a property into a limited liability company that’s set up in a low-tax state and then divvying up shares of the LLC into trusts that each claim the maximum $10,000 deduction.

    Jonathan Blattmachr, a New York-based attorney, has advised clients to set up non-grantor trusts. And he plans to do the same with his two Long Island homes, in Garden City and Southampton, he recently told Bloomberg. After setting up an LLC, he intends to split the interest into five trusts set up in Alaska. At the end of the day, he hopes to realize a $50,000 deduction ($40,000 more than he could claim with the $10,000 SALT cap).  “This is an under-the-radar thing and it’s novel,” Blattmachr told Bloomberg.

    New Jersey attorney Martin Shenkman also plans to set up a non-grantor trust for his Fort Lee condo. But he said while it’s a great strategy for his wealthy clients, it’s less feasible for the superwealthy. “I had someone come in who is paying $120,000 in property tax — what am I going to do, set up 12 trusts? Is that worthwhile?” he said. “It starts to look flimsy.”

    While these types of tax structures are legal, they require proactive tax planning and the financial savvy to pull off. In the short term, Shenkman said, many wealthy investors are holding out hope that their states will come in with ways to offset the new federal guidelines.

    Cuomo has signed legislation that creates two workarounds to the cap on SALT deductions. One creates a state-operated charity that will accept donations in lieu of state income tax — or allow taxpayers to make donations in exchange for property tax credits. The other is an optional program for employers to pay a 5 percent payroll tax on new employees earning more than $40,000.

    In May, the IRS warned that it won’t allow such workarounds, but that hasn’t stopped states like Connecticut and New Jersey from considering proposals of their own.

    “People are going to feel it in their wallets,  even people not making a ton of money,” said Aaron Lerner, a senior manager at accounting firm EisnerAmper. “The states may be in a position where they have to give deductions in order to stay competitive in the market for talent and business.”

    According to Lerner, investors may be eligible for a 199A deduction of 20 percent of their income if their taxable income related to real estate investments is under $400,000.

    Others are turning to 421a tax breaks. Warburg Realty’s Alex Lavrenov said he’s steered clients toward condos with tax abatements. He recently helped clients sell an apartment in Greenpoint for $999,000 and purchase a larger place — with a 421a abatement — in Windsor Terrace for $1.2 million. “They kept relative monthly costs down where they could maintain the same lifestyle,” he said.

    But Back Roads’ Gaines said his monthly costs will drop while his lifestyle improves. He’ll be able to send three children to private school in Texas for the cost of one in New Jersey. And he has extended family nearby.

    “I’m pro-Jersey, but it has almost 9 percent state income tax,” he said. “The exodus is apparent to everyone.”