Month: January 2016

Derek Zoolander

From Luxury Listings NYC: In a tongue-in-cheek “home profile,” Zoolander, aka Ben Stiller, hopes “they find a cure for Brooklyn.” [more]

Source: At home with Derek Zoolander: VIDEO

From Luxury Listings NYC: Much like NYC, London is an architectural hodgepodge. It’s part of what makes the city so unique and visually exciting. But even in London, a 35-foot high luxury treehouse lodge is likely to turn heads. [more]

Source: A luxury treehouse opens on the Thames in London

Pricey waterfront real estate is nothing new, but a rise in boat ownership is now driving developers to create mixed-use marinas.

In China, the number of mixed-use marina projects planned has increased significantly, as have home prices. Coastal areas in Malaysia, the Middle East and Spain are also seeing the same trend, according to the New York Times.

“Sailing is becoming more popular, and boat owners need places that offer facilities for maintenance,” James Price, an agent on the international development team of the London-based property firm Knight Frank, told the Times. “But they also want somewhere with increased lifestyle experiences, like an accessible location, good infrastructure, residential options and quality on-site leisure services, restaurants and retail.”

Not only has boat ownership risen sharply over the last decade, but orders for yachts longer than 250 feet have increased by 25 percent over the previous year. There was also a record number of orders for boats in excess of 328 feet.

“There is a shortage of, and high demand for, space in which marina and residential are combined,” Eamonn Feeney, managing director of marina planning specialist, MDL Consultancy, said. [NYT] – Christopher Cameron

Source: Mixed-use marinas are a growing global trend

With 20,000 to 30,000 citations for public urination issued each year by the NYPD, it’s becoming clear that NYC has an infrastructure problem.

Most of the city’s public lavatories are in subway stations and parks. But they are poorly kept and often locked. There are only three public pay toilets spread across the five boroughs.

“Public toilets are as essential a part of street infrastructure as streetlights,” Carol McCreary of PHLUSH (Public Hygiene Lets Us Stay Human) told Atlas Obscura. “They need to be part of the same package, and the fact that they’re not makes no sense.”

Other groups like Safe2Pee are also lobbying for change.

Unlike many other world cities, like London and Berlin, NYC never put any real money behind building and keeping up public restrooms. Critics counter that public restrooms attract crime, but of course, the real issue is money, both for real estate and upkeep. Essentially, public restrooms are money pits.

The city’s most recent answer has been to move toward downgrading public urination from a misdemeanor to a lesser violation. But activist groups hope for a more humanitarian answer. [Atlas Obscura] —Christopher Cameron

Source: Are public bathrooms NYC’s next big infrastructure project?

Second Avenue Deli

From the archives: Many still mourn the loss of the Second Avenue Deli to a Chase bank branch, including this writer, who counts it as a childhood favorite.

I had just stopped short of laying it on thick and telling Andrew Mandell, a broker with Ripco Real Estate, about how my father used to give me half of his matzo ball every time we went to the East Village staple, when Mandell gently interrupted. [more]

Source: From the archives: How it feels to lease a landmark

Auchendean Lodge

From Luxury Listings NYC:  c And at £600,000 (roughly $861,000) it’s not a bad deal. [more]

Source: Romantics welcome at this Arts and Crafts masterpiece in the Scottish Highlands

305 McGuinness Boulevard in Greenpoint

Westchester-based real estate investment firm GDC Properties acquired a 38-unit Greenpoint rental building for $31 million, according to property records filed with the city Friday.

GDC closed on its purchase of 305 McGuinness Boulevard, known as Lofts 305, on Jan. 20. The Hawthorne, N.Y.-based firm acquired the five-story, 41,000-square-foot building from Union City, N.J.-based owner Ronel Ben-Dov and financed the deal with a $16.4 million mortgage from Wells Fargo Bank, per property records.

Ben-Dov bought the Karl Fischer-designed apartment building from developer Bronfman Fisher Real Estate Holdings for $13.4 million in 2010. The landlord listed the property last summer at an asking price of $32.5 million, as The Real Deal reported, after previously asking $25 million for the building in 2012.

Neither GDC nor Brendan Maddigan of Cushman & Wakefield, whose team marketed the property, returned requests for comment. Ben-Dov could not be reached for comment.

Cushman & Wakefield shopped the building as a possible condo conversion, which would bring the property full circle; Bronfman Fisher had previously converted the property from condos to rentals, after the condo market tanked during the last recession.

In the priciest sale of a residential building in the history of Greenpoint, World Wide Group paid $103 million for a 130-unit rental property at 110 Green Street, The Real Deal reported this week.

Source: Westchester firm acquires Greenpoint’s Lofts 305 for M

Jane and Julien Studley

It’s real estate’s answer to an episode of Law & Order.

Julien Studley’s former personal assistant is suing the late Studley founder’s wife Jane for allegedly cutting her out of his will and subjecting her to wrongful imprisonment and assault and battery while she worked for the real estate executive.

The disgruntled former employee, Marion Rios, says she was Studley’s personal assistant for 35 years and was guaranteed an inheritance of $140,000 in his will before Jane conspired to shut her out. For her part, Jane denied the allegations and said that Rios had a history of mooching off her husband.

Studley is alleged to have promised the inheritance to Rios following the sale of his shares in his namesake company Studley (now Savills Studley) in the early 2000s, which resulted in Rios losing benefits such as her 401K account and her life insurance policy. They originally agreed upon $100,000, she says, but later upped the amount to $140,000.

But Rios, who was responsible for Studley’s schedule and banking, says she clashed with Jane, who tried to undermine her longtime relationship with Studley and frequently accused her of stealing from the family and shutting her out the couple’s bank accounts, the lawsuit alleges.

The tension hit a boiling point in October 2014, when Jane allegedly confronted Rios about missing funds from a family bank account and cornered her in her office, preventing her from leaving the apartment. Studley’s attorney, Gary Kreinik, called to advise Rios to leave the apartment or risk being punched by Jane, she says.

Rios was dismissed from her job following the incident and, when Julien Studley died of brain cancer in October, she found that his will had been amended to remove her $140,000.

“Jane interfered with Marion’s employment contract and with Marion’s agreement with Julien to be taken care of in his will,” Rios said in the complaint, filed Friday in State Supreme Court. “Jane unduly influenced Julien at a time when his mental faculties were diminished due to brain cancer.”

When contacted by The Real Deal, Jane denied the allegations, saying of Rios: ‘She knows why she was fired.”

She continued: “My husband was a very, very nice man. She [Rios] was the kind of person who always felt like she wasn’t getting enough from him. So many people used to ask him why he kept her.”

Jane, a Shanghai native, was Studley’s second wife following his short-lived marriage to a junior employee at the brokerage.

“After we got divorced, I decided, I’m not going to look for a wife; I’m going to look for someone to take care of me,” Studley told TRD in a 2008 interview. “Ultimately, I married Jane.”

Source: Julien Studley’s ex-assistant sues wife over alleged 0K inheritance

From left: 106 West 56th Street and Christopher Schlank

Could another slender skyscraper soon be coming to Billionaires’ Row?

Savanna plans to demolish a nine-story, 36,000-square-foot building at 106 West 56th Street, an area with one of the highest floor-to-area ratios in the city.

The private equity and asset management firm filed permits with the Department of Buildings for the site demolition on Wednesday.

Since the 5,000-square-foot lot lies in an area with a FAR of 15, Savanna can build an 80,000 square foot tower as of right, according to 6sqft, which first spotted the permits. (The C6-6 zoning that covers the site allows for a floor-to-area ratio of 15 for a commercial building and 10 for residential, with bonuses available for a public plaza and through inclusionary housing.)

Savanna has been busy of late developing a nine-story, Morris Adjmi-designed commercial building at 540 West 26th Street and a mixed-use tower at 141 Willoughby Street in Downtown Brooklyn, where it’s been pushing for a rezoning.

Savanna, which landed number five on TRD‘s April 2015 ranking of top deal-making private equity firms, sold Twitter’s Chelsea headquarters to New York REIT for $335 million. Savanna head Chris Schlank sat down with The Real Deal for a Closing interview in 2014.  [6sqft] — Dusica Sue Malesevic

Source: Could Billionaires’ Row be set for another skinny tower?

Rendering of 5521 Eighth Avenue in Sunset Park (credit: Raymond Chan via New York YIMBY)

A group of Flushing investors building a medical condo development in Sunset Park are seeking a total sellout of nearly $76.3 million for the property in what would be the most expensive condo offering of any kind to date in the Brooklyn neighborhood, according to a TRData analysis.

The Winley Plaza Condominium, at 5521 Eighth Avenue in Brooklyn, will stand six stories and hold 41 commercial condo units across roughly 42,500 square feet of space, according to permit applications filed with the city’s Department of Buildings.

Flushing developer Andy Wong is building the project, located in the heart of Sunset Park’s Chinatown, alongside nine other partners in Wong’s Golden Eighth Avenue Realty Corp., according to a condo offering plan filed Tuesday with the state attorney general’s office.

Wong’s entity has owned the property – located two miles south of Jamestown’s massive Industry City office redevelopment near the South Brooklyn Marine Terminal – since 1989, according to city property records.

The Winley Plaza Condominium is projected to cost approximately $33 million and benefitted from around $8 million in EB-5 funding, New York YIMBY reported in 2014.

In addition to medical offices on its upper floors and 13,000 square feet of retail space on its ground floor and mezzanine level, the building will also house an automated parking facility capable of holding around 150 vehicles.

Flushing architect Raymond Chan, who is designing the Winley Plaza, confirmed the building’s plans and said the project is already under construction. Wong declined to comment on the development.

Will Parker contributed to this report

Source: Sunset Park medical condo building seeks M sellout

Rendering of 7 & 8 Navy Pier Court in Stapleton (credit: Ironstate)

New Jersey-based Ironstate Development has launched a teaser website for its new Staten Island rental project, releasing a few more details on the waterfront development.

The project — located at 7 & 8 Navy Pier Court in Stapleton — has 900 units across two five-story buildings. The project, known as URBY Staten Island, also features 35,000 square feet of retail space, an on-site farm, a communal kitchen with a resident chef and a waterfront esplanade, Curbed reported. URBY — formerly known as URL Staten Island, similar to the developer’s Jersey City project URL (Urban Ready Life) Jersey City — is expected to start leasing in the spring.

Dutch architectural firm, Concrete, designed the project. [Curbed] — Kathryn Brenzel

Source: Take a look at Ironstate’s new North Shore rental development

Call it the 421a expiration hustle: developers and architects raced to obtain permits and begin construction in December before the tax abatement program expired this month.

Permits for 7,781 residential housing units in 299 projects were granted  in December— four times more than the number issued in November, according to new census figures.

This was the third-highest monthly total in at least seven years, the Wall Street Journal reported. May and June saw even bigger surges, when 421a, which grants subsidies to developers who offer affordable units in new buildings, also faced an expiration deadline.

The program was renewed temporarily in June, but with a catch: that negotiations between the Real Estate Board of New York and the Building and Construction Trades Council of Greater New York — a union group — would work out a deal over wage requirements for construction workers at 421a sites. A deal wasn’t reached and the program expired Jan. 15.

Developers received $1.26 billion in exemptions through 421a in the current city fiscal year, according to the Journal. This has been attributed to strong housing recovery, but also the push by developers to get all possible projects underway to quality for breaks, the Journal reported.

In 2015, 56,248 permits were issued in New York City, the most since 1962, according to Census Bureau figures. That number blows away the most recent peak, which was 33,911 permits issued in 2008, though dozens of those projects were delayed for years after the financial crisis. [WSJ] — Dusica Sue Malesevic

Source: Developers scurried to start projects before 421a expired

The Treasury Department’s new initiative to track all-cash LLC buyers has been slammed by industry insiders as unnecessary, unconstitutional and a “witch-hunt.” But the most damning criticism? The initiative, which aims to crack down on money laundering and ill-gotten gains, may not even work.

The order, which requires title insurers to disclose the true buyers of homes over $3 million acquired in-all cash deals through shell companies, only focuses on sales completed with paper checks and dollar bills, and excludes wire transfers, which experts say are commonly used on so-called “cash deals.”

“We don’t have people coming to closings with suitcases full of cash,” said Stuart Saft, who heads Holland & Knight’s real estate practice. Monitoring payments made with currency will have no effect, Saft said, because those payments simply don’t exist at the $3 million-and-up level.

At the luxury price point, the true all-cash deal — which conjures up cartoonish images of men in dark sunglasses slapping down bands of bills after tense negotiations — is close to fiction, said real estate attorney Adam Leitman Bailey.

Paying with cashier’s checks or certified checks, however, is much more common, and is covered by the Treasury’s new reporting requirements. Title insurers typically know more about buyers than any party in a deal, according to real estate attorney Petro Zinkovetsky, and are likely to have collected information that a bank issuing a cashier’s check may not have.

“The bank doesn’t need the information of every single owner of the LLC to issue a check,” Zinkovetsky said. The Treasury Department’s order will likely allow the government to identify LLC members that it could not through its normal monitoring of the banking system.

But by excluding wire transfers, the initiative has no teeth, attorneys said.

“It’s foolish,” said Aaron Shmulewitz, an attorney at Belkin, Burden, Wenig & Goldman. “Funds are going to be wired to the title company [directly] in advance of the closing, and the title company is going to hold on to it.” Since title companies will not be asked to disclose LLC members on wire-transfer transactions, the Feds will have to rely on the banking system’s limited ability to track the names behind LLCs.

A spokesperson for FinCEN, the Treasury Dept.’s financial crimes unit, told The Real Deal the government was looking to track “a narrow subset of transactions that are generally not scrutinized under existing AML [Anti Money Laundering] controls, while also minimizing burden by conforming to existing rules that the covered businesses are already familiar with.”

“To the extent that we see a shift to all-wire transactions,” the spokesperson added, “we adapt in the future accordingly.”

But Shmulewitz said the wire transfer loophole was “large enough you can drive a fleet of trucks through.”

“Who initiated the wire transfer? Some bank, some investor in some country abroad?” he said, casting doubt on the government’s ability to reliably identify LLC members.

A source familiar with the workings of the Treasury Department told TRD the government may already feel confident in its ability to track wire transfers. Payments by money order, the source said, are messier because the records are often on paper and are more tedious to track down. In such cases, going directly to the title insurer for information is a better bet.

FinCEN has brought the hammer down hard on banks that have failed to do due diligence on foreign wire transfers.  In 2012, it hit HSBC with a $500 million civil penalty for its failure to adequately review trillions of dollars in annual transfers. And in 2015, the German Commerzbank AG agreed to pay a penalty of $258.7 million for, among other things, violating U.S. sanctions by processing 959 wire transfers and other transactions involving Iranian financial institutions.

Another source put forward a more bureaucratic reason: the Treasury form used to enact the order, FinCEN Form 8300, which is used to report transactions over $10,000, does not cover wire transfers, and the form would have to be formally changed for it to do so.

“We’re asking the title insurers to use an existing form with existing definitions,” a FinCEN spokesperson said. “A covered transaction is triggered only when ‘such purchase is made, at least in part, using currency or a cashier’s check, a certified check, a traveler’s check, or a money order in any form.’  This generally conforms to existing Form 8300 requirements (which are not triggered by wire transfers), which reduces burden on covered businesses because they are already familiar with the Form 8300 filing requirements and have filed Form 8300’s in the past.”

The temporary “geographic targeting order” on Manhattan real estate begins on March 1 and ends on Aug. 27, at which point many believe the government will assess what it has learned and move to implement something that is both more comprehensive and more permanent.

“They’re going to need to start from scratch,” Bailey said.

Source: The biggest weakness in the Treasury’s new LLC order? Wire transfers

Rendering of 251 West 14th Street; Top: Ilan Bracha, co-founder of B+B Capital; Bottom: Rance MacFarland, CEO of Pizzarotti

An Italy-based construction services company has purchased a development site in Chelsea from B+B Capital for $23 million in a deal that won’t disrupt plans for an 11-story condominium building on the property, which features about 24,000 buildable square feet.

Pizzarotti IBC expects to go ahead with B+B Capital’s plans to build a condo tower on the site, located at 251 West 14th Street between Seventh and Eighth avenues.

The building, initially designed by ODA Architecture, is expected to have 11 full-floor units ranging from 1,700 square feet to 2,500 square feet, the New York Observer reported. It’s not clear if ODA will get to keep the job: Nest Seeker International’s Thomas Stein, who procured the buyer, said Pizzarotti is mulling who will be the project’s architect.

Howard Raber, Shimon Shkury, Jesse Deutch, Randy Modell and Victor Sozio of Ariel Property Advisors represented the sellers in the deal.

Representatives for B+B, headed by Ilan Bracha, wouldn’t say why the company decided to sell the property, which it acquired for $7.5 million in 2014. Pizzarotti paid $958 per buildable square foot, which Raber said is roughly $200 dollars higher than the neighborhood average.

This will be Pizzarotti’s second project in New York City. The company is working with Madison Equities to build a 65-story condominium at 45 Broad Street in the Financial District.  [NYO] — Kathryn Brenzel

Source: B+B Capital sheds Chelsea development site for M

1040 tax form (credit: Free Stock Photos)

Wait a second, you’re not a residential co-op or condo — is probably what city officials said when it was discovered that more than $10 million in tax breaks mistakenly went to parking garages, storage spaces and other improper recipients.

Over the last four years, the city’s Finance Department gave out more than $10 million to indoor parking garages, gardens, storage spaces, three office buildings and two retail shops through a tax-rebate program intended for residential owners of co-ops and condos, according to an audit by city Comptroller Scott Stringer.

The audit shows that the Finance Department failed to properly review records, causing more than 1,000 corporate-owned condos and co-ops to improperly receive the tax benefits, the New York Post reported. The tax breaks ranged from 17.5 percent to 28.1 percent of the total tax bills each year, the newspaper reported.

“The city handed out millions in tax abatements to corporate-owned condos, parking spots and cabanas because no one bothered to review basic tax records,” Stringer said. “The Department of Finance needs to significantly step up its game and collect all the taxes the city is owed.”

The Finance Department is installing internal software to help catch this kind of mistake in the tax seasons ahead. [NYP] — Kathryn Brenzel

Source: Oops: City mistakenly gave away M in condo, co-op tax breaks

Left and top right : South of the Highway Southampton; Bottom right: 6 Northwest Road East Hampton

The luxury market may be going soft in Manhattan, but high-end property sales in the Hamptons hit an 11-year high at the end of 2015.

The average sales price of homes in the Hamptons reached $2.3 million in the final quarter of 2015, a 15.6 percent year-over-year increase, according to a sales report released by Douglas Elliman on Thursday.

The record runs counter to the narrative playing out in Manhattan, where experts have warned of a potential winding down in the demand for uber luxury properties.

“With all the discussion about the top of the market in the city softening or slowing or cooling, the Hamptons this quarter turned out to be contrarian,” said Jonathan Miller, president of Miller Samuel and author of the Elliman report.

The fourth quarter saw the most $5 million-plus sales in a decade and the highest median sales price for luxury properties at $8.3 million, Miller said. The median sales price for the fourth quarter is more modest, rising to $997,000 — a 4.9 percent increase from the last quarter and a 2.3 percent year-over-year increase, according to the report.

The rise in average sales is at least partially attributable to a post-recession pattern in the Hamptons. Miller said that since the housing crisis, there’s been a rush of high-end sales in the fourth quarter of each year. Unfortunately, he said, it’s not really clear why.

“One thing that we’ve seen since the financial crisis, is that at the high end of the market, meaning north of $5 million, we’re seeing a growing shift to more of these high end sales in the last quarter of the year,” he said. “If we look prior to the financial crisis, that pattern doesn’t exist.”

The volume of sales at the end of 2015, however, did fall 16.5 percent to 613 from the same time last year. It increased 20.9 percent from the third quarter. The year-over-year drop, Miller said, is simply a product of unusually high sales activity at the end of 2014 and a drop in inventory.

Source: What slowdown? Average sales price reaches 11-year high in the Hamptons

(Photo: Sergey Semenov)

UPDATED: Jan. 28, 9:05 a.m.: The U.S. Treasury’s decision to track all-cash property purchases made through shell companies sent a shiver through the spine of the real estate industry earlier this month.

But just how many anonymous corporations are buying New York City real estate?

Anecdotal evidence suggests plenty, according to brokers and lawyers who say their clients value privacy and the legal protection afforded by purchasing property anonymously through a corporation.

As for hard numbers, there were 1,380 residential purchases at all price points in Manhattan made by LLC buyers in 2015, according to data compiled by StreetEasy for The Real Deal. That’s more than 50 percent of all residential LLC buyers across all five boroughs last year.

In 2010, there were just 861 LLC buyers in Manhattan, StreetEasy data shows. Even five years ago, that accounted for nearly half of the 1,729 LLC deals.

Overall, Manhattan residential sales accounted for 37 percent of the 35,725 recorded sales last year.

Based on that volume, LLC purchases represented a small slice of the deal flow at 7.7 percent, slightly higher than 2010’s 4.9 percent.

But federal authorities still have high hopes for the new rule, a measure partly aimed at reining in the flow of foreign capital. “We are concerned about the possibility that dirty money is being put into luxury real estate,” Jennifer Shasky Calvery, a top Treasury official, said Jan. 13.

Under the new rule, title insurance companies will be required to disclose the identity of buyers who purchase Manhattan real estate priced at $3 million or more in cash through a shell company.

Sources told TRD, however, that buyers who want to remain anonymous will be able to do so by jumping through one of several financial loopholes to the provision, such as utilizing a straw buyer or setting up a trust. The new rule takes effect in March.

Correction: The headline on a previous version of this story incorrectly characterized the buyers purchasing through LLCs.

Source: There were more than 1,300 Manhattan apartments purchased anonymously last year

From left: Citigroup CEO Michael Corbat, 388-390 Greenwich Street and Marc Holliday

Citigroup is exercising its option to purchase its Tribeca headquarters at 388-390 Greenwich Street from SL Green Realty for $2 billion, the real estate investment trust announced Wednesday.

The banking giant will buy back the 2.7 million-square-foot office complex it sold to a partnership between SL Green and Ivanhoe Cambridge for nearly $1.6 billion in 2007. The bank signed a $1 billion lease renewal for its 2.7 million square feet at the properties in 2013 – a deal that came with the $2 billion buyback option.

SL Green bought out Ivanhoe Cambridge for $783 million in 2014 to take full control of the property, which is undergoing a major renovation project featuring a curtain-walled makeover.

In conjunction with the its year-end earnings release for 2015, the city’s largest office landlord also announced a number of leasing transactions – most significantly a 23-year, 43,000-square-foot deal with Nordstrom to anchor three retail levels at 3 Columbus Circle, which SL Green owns in partnership with the Moinian Group.

The new store “will serve as an expansion” of the department store’s upcoming flagship location on West 57th Street, the landlords said, describing the deal as a “complex transaction” involving “a series of lease modifications and relocations.”

SL Green also announced that advertising and communications conglomerate Omnicom signed a 15-year lease renewal for 167,000 square feet at the 37-story, 1.2 million-square-foot News Building at 220 East 42nd Street, between Second and Third avenues. Omnicom’s space covers the building’s 11th through 15th floors.

In addition, the REIT said music content provider Music Choice had renewed its nearly 53,000-square-foot lease at the Olivia – a 36-story, 493,000-square-foot mixed-use building at 328 West 34th Street between Eighth and Ninth avenues.

Source: Citigroup will buy back Tribeca HQ from SL Green for B

From left: Chris Hughes and 157 West 12th Street

Chris Hughes, Facebook co-founder and New Republic owner (for now), bought a $23.5 million West Village townhouse that comes with an unusual amenity: an underground tunnel.

Hughes and husband Sean Eldridge bought the 4,164-square-foot landmarked property at 157 West 12th Street, which comes with a 10-feet wide passage that links to a carriage house.

“The homes are connected via subterranean tunnel, but it’s nothing like El Chapo’s,” a visitor told the New York Post.

The couple purchased the townhouse in an off-market deal from UBS Bank’s Michael Stewart, who brought the home for $3.4 million in 2004. Stewart’s broker is Paula Del Nunzio of Brown Harris Stevens, the Post reported.

The three-bedroom, three bathroom “smart-wired” home also comes with a custom wet bar, a wood-burning fireplace, exposed brick, 19th-century columns, a chef’s kitchen, a home theater and a library.

Hughes and Eldridge’s previous pad — a 4,200-square-foot spread at 30 Crosby Street — recently sold for $8.5 million, according to the Post. [NYP] — Dusica Sue Malesevic

Source: Facebook co-founder Chris Hughes buys .5 million West Village townhouse

Hell’s Kitchen development site on 10th Avenue (credit: NYC Economic Development Corp.)

The New York City Economic Development Corp. is seeking a developer to knock down most of a Hell’s Kitchen block to make way for a massive mixed-use development.

The city released a request for proposals (RFP) on Wednesday, launching a project that could bring 700 apartments — 40 percent of which would be designated affordable — retail space and a new 150,000-square-foot facility for Covenant House New York, a nonprofit that helps homeless youth.

The project consists of 780,000 square feet of development rights across two sites, which are bounded by 10th and Dyer avenues and West 4oth and 41st streets, according to the RFP. The selected developer will also have to set aside part of the site for a future No. 7 subway station, Crain’s reported.

Covenant House owns three buildings on the block, and the developer must agree to build the nonprofit a new facility before it begins construction on housing. The city will also need to acquire a vacant building that is adjacent to the Covenant House properties before a developer can plan to build on both sites.

Bids for the project are due by May 2.  [Crain’s] — Kathryn Brenzel

Source: City launches bidding process for gargantuan Hell’s Kitchen mixed-use development

590 Atlantic Avenue in Downtown Brooklyn (inset: MaryAnne Gilmartin)

It’s the fuse that finally ran out.

Electronics chain P.C. Richard & Son is suing Forest City Ratner over the eminent domain condemnation of the retailer’s Downtown Brooklyn store at 590 Atlantic Avenue, where the developer plans to build a 25-story tower as part of its Pacific Park project.

The two sides signed a letter of intent in 2006 detailing an agreement whereby, if the Empire State Development Corp. were to condemn 590 Atlantic Avenue as part of the developer’s plans for its Atlantic Yards (now Pacific Park) project, Forest City would provide P.C. Richard with space at a new development at the site.

In September 2015, Empire State Development kicked off the eminent domain process at the property, known as Site 5, which houses both P.C. Richard and a Modell’s sporting goods store. The location is adjacent to the Barclays Center and Atlantic Terminal and holds nearly 440,000 square feet of development rights, according to Atlantic Yards/Pacific Park Report, a watchdog blog.

But while Forest City claims the 2006 LOI was non-binding and featured only an obligation to enter good-faith negotiations with P.C. Richard, the retailer, which owns its portion of Site 5, alleges the agreement is binding and entitles it to a new retail space at Forest City’s development.

P.C. Richard filed for a preliminary injunction against Forest City in Kings County Supreme Court last month seeking to prohibit the developer from leasing “retail space on the lower floors of any tower erected” on the property and arguing the retailer is entitled to “a replacement property at the same location” on the lower floors of the development.

Forest City responded to the filing on Jan. 15, court documents show, denying P.C. Richard’s allegations. The parties are due in court Feb. 18.

Representatives for both P.C. Richard and Forest City, which is developing Pacific Park through a joint venture with Greenland USA, declined to comment.

In November, the city’s Economic Development Corp. said it is looking to redevelop P.C. Richard’s longtime Union Square location, which sits on a city-owned site at 124 East 14th Street. The retailer subsequently signed a lease for a new 20,000-square-foot Harlem location, at 309 West 125th Street, later that month.

Source: P.C. Richard sues Forest City over eminent domain seizure at Pacific Park

Andrew Chung’s IPG Management, the new real estate investment fund he started after leaving the Carlyle Group, will be setting up shop at Principal Real Estate Investors’ 1370 Sixth Avenue.

Newmark Grubb Knight Frank brokered the lease deal for 4,676 feet on behalf of IPG and the asking rent was $82 per square foot at the 35-story, 348,040-square-foot building.

CBRE’s Paul Amrich and Jackie Marshall brokered the deal on behalf of the landlord and Jared Horowitz and Justin Pollner of NGKF represented IPG, the Observer reported.

Vince Camuto Shoes, Steve Madden and the Miss Universe Organization are also tenants, according to Costar Group.

Chung left the Carlyle Group eight days after being promoted to partner and branched out on his own. His firm, in a partnership with Artemis Real Estate Partners, bought a 15,500-square-foot retail condo at 202 Canal Street in August for $44 million. It’s Chung’s first major deal since setting out on his own. [NYO] — Dusica Sue Malesevic

Source: Andrew Chung’s IPG Management takes Midtown space

From left: 70 Pine Street and the Spotted Pig

The $600 million conversion of 70 Pine St. from offices to apartments was a plagued with construction conundrums and delays, but Rose Associates and partner DTH Capital are finally welcoming the first tenants this month.

In what was once insurance offices, there are now 664 luxury rental apartments and Q&A’s 132-room apartment hotel, which opened last November.

The 66-story landmarked building in the Financial District took a year longer to convert than expected for Rose Associates, which took over the property in 2012 after two other developers had left the project, the New York Post reported. Rose and DTH Capital spent $600 million on the project, $50 million more than was anticipated.

Reps for Rose told the Post that a major issue was the landmarked building’s size — more than 1 million square feet and nearly 1,000 feet tall. Rose tapped Deborah Berke & Partners Architects to lead the project.

The art deco will be home to a four-level restaurant run by Spotted Pig chef April Bloomfield and her partner Ken Friedman. There will also be several other retail stores and a fitness center. [NYP] — Dusica Sue Malesevic

Source: Delayed 70 Pine St. finally welcomes tenants

From left: 77 Water Street, One New York Plaza and 100 Wall Street

According to New York City’s largest business improvement district, Water Street in the Financial District is a pedestrian wasteland.

The street’s arcades — covered walkways along a building front — are either cavernous and cast in shadow, or too narrow. The walkways tend to disconnect the street and buildings’ ground floors, creating a sterile experience for pedestrians, according to the Alliance for Downtown New York.

The BID aims to change that with a retail makeover: A land-use application filed this month seeks to rezone an area along Water Street, between Fulton and Whitehall streets, to allow the infill of more than 110,000 square feet of arcade space. Rezoning would potentially pave the way for 167,357 square feet of new retail space, most of which would be built into existing arcade space on the ground floors of various buildings, according to an environmental assessment filed with the City Planning Commission.

“A revitalized, transformed Water Street corridor is essential to the revitalization of Lower Manhattan,” Maria Alvarado-Behl, a spokesperson for the BID, said in a statement. “We now look forward to continued collaboration and dialogue with the many stakeholders in this significant project.”

The group has identified 17 buildings in the area — which collectively have more than 110,000 square feet of arcade space — where a total of 167,357 square feet of retail, 26,967 square feet of office space and 2,016 square feet of residential space could be built. There are no specific plans yet for the individual buildings, but the BID suggests that potential uses could include restaurants, drug stores, hotels, clothing stores, art galleries and lobbies.

The new office space would be located at the mezzanine level in five buildings — 75 Wall Street, 77 Water Street, 2 New York Plaza, 7 Hanover Square and 175 Water Street — and the additional residential space would be located at 200 Water Street, according to the application.

As a trade-off, property owners that choose to fill out these passageways would be required to upgrade the plazas around their buildings and make them more inviting by adding “public amenities,” such as chairs, tables and planters, according to the application.

A representative for one of the property owners, Brookfield Property Partners, told The Real Deal that the company supports the zoning application but said plans for the area are too preliminary to discuss. Brookfield owns One New York Plaza, one of the 17 buildings identified in the application. The building, located at Broad and Water streets, has 11,180 square feet of arcade space.

The application comes six years after the Alliance for Downtown New York issued a report on improving the area’s privately-owned public spaces, which suggested retail infill as a possible remedy to what the group calls an “underwhelming pedestrian experience.”

In May 2013, the planning commission approved a similar zoning change that allowed for public events and public amenities in the plazas and arcades. That amendment expired in December 2015. The new application takes the idea a step further by adding permanent amenities to the plazas and calling for an overhaul to the ground floors of several buildings.

Source: Space Invaders: BID seeks to add 170K sf of FiDi retail by eliminating Water Street arcades

Bill Ackman and Stuyvesant Town

Pershing Square Capital Management and Winthrop Realty Trust are suing CWCapital for $500 million, claiming they got bilked out of a fat profit when the special servicer foreclosed on Stuyvesant Town-Peter Cooper Village and then sold it for $5.3 billion. The suit is the latest in a number of legal challenges alleging foul play in the run-up to the blockbuster December deal CWCapital struck with the Blackstone Group and Ivanhoe Cambridge.

Understanding the lawsuit requires a quick dive into the complex debt structure that existed under the apartment complex’s old ownership.

When Tishman Speyer and BlackRock bought Stuy Town in 2006, they financed the $5.4 billion deal with a heavy load of senior and mezzanine debt. In 2010, they defaulted on their obligations and in June of that year, a federal judge green-lighted foreclosure.

If a borrower defaults, the mezzanine lenders typically get first shot at taking over the property. This means that once foreclosure was imminent, the mezzanine loans secured by Stuy Town suddenly became very attractive – or so it seemed.

In August 2010, Bill Ackman’s Pershing Square – a hedge fund known for its real estate opportunism – bought the mezzanine debt in partnership with Winthrop for an undisclosed amount. Their plan appeared to be to foreclose on Stuy Town, auction it off, repay the senior lenders with the sale proceeds, and enjoy the remaining spoils.

But CWCapital, the special servicer representing the senior lenders, ruined those plans. The firm won a court injunction mandating that Pershing and Winthrop would have to pay off the $3.6 billion in outstanding senior debt before it could even begin auctioning off the property. In other words: instead of selling the property and using some of those funds to pay off the senior lenders, Pershing Square and Winthrop would have to pay off the debt first.

In essence, this meant Pershing and Winthrop couldn’t foreclose and were faced with the threat of seeing their mezzanine stake wiped out altogether. Under pressure, the suit filed in New York State Supreme Court Jan. 24 alleges, they decided to sell their mezzanine stake to CWCapital in October 2010.

After taking over the mezzanine debt, CWCapital filed a deed in lieu of foreclosure, taking control of the entire property. But it did so, the suit alleges, without paying off the senior debt bondholders (whom it represented as special servicer) first. In other words: the firm did exactly what it had prevented Pershing and Winthrop of doing, or so the suit alleges. The suit claims that by doing so, CWCapital violated the October 2010 agreement under which Pershing sold its mezzanine stake.

“This was always the Defendant’s plan,” the complaint reads. “Even at the time Defendants signed the Agreement, they intended to do exactly what they told Justice Lowe Plaintiff (Pershing and Winthrop) could not do.”

The suit alleges that CWCapital “engineered an elaborate bipartite fraud” to take control of the complex, and that its title to the property was a “nullity.”

In October 2015, CWCapital reached a deal to sell Stuy Town to Blackstone and Ivanhoe Cambridge for $5.3 billion. The deal closed in December. CWCapital has since repaid the senior bondholders and raked in more than $500 million in default interest payments, according to the complaint.

Pershing Square and Winthrop seek $500 million in damages “plus punitive damages or rescission of the (October 2010) agreement,” according to the suit.

Bank of America and U.S. Bank are also named as defendants because they served as trustees for the senior mortgage trusts serviced by CWCapital.

CWCapital could not immediately be reached for comment.

Source: Bill Ackman’s hedge fund sues CWCapital for 0M over Stuy Town

What can happen in 10 years? Well, a decade ago, “Billionaires’ Row” had yet to enter the real estate lexicon. Brokers like Dolly Lenz and Fredrik Eklund weren’t using Twitter to sell high-priced homes. Brooklyn Bridge Park was two years away from construction. And Bill de Blasio was representing a small slice of Brooklyn in the City Council.

Needless to say, New York has changed a lot in the last decade.

And 10 years from now, in 2026, there will undoubtedly be a host of new people, projects, neighborhoods and technologies dominating the conversation. [more]

Source: 2026: TRD predicts what NYC will look like in 10 years

615 10th Avenue in Hell’s Kitchen (inset: John Liang)

Xinyuan Real Estate will move ahead with plans for a condo tower on the Hell’s Kitchen development site it recently closed on, though noting the property will aim for a price point below the high-end luxury condo market.

The Chinese developer has acknowledged signs of a glut in the city’s luxury home market and distanced itself from recent projects aimed at ultra-wealthy investors – with its first Manhattan project instead looking to appeal to dual-income families and upper-middle-class buyers from both the U.S. and China.

“New York’s luxury condo market is now at a very, very dangerous edge of bubbles,” John Liang, Xinyuan’s U.S. managing director, told Bloomberg. “It’s a myth that Chinese buyers all come to the U.S. loaded with cash.”

Xinyuan closed its $57.5 million acquisition of the development site at 615 10th Avenue, between West 44th and West 45th streets, earlier this month. The Beijing-based firm – which operates in the U.S. through its subsidiary XIN Development – entered contract on the property last fall, as The Real Deal reported.

The company expects its apartments there to sell for up to $2,000 per square foot, Liang said – significantly less than the $2,775 per square foot average for new development listings in Manhattan last year, according to research by Halstead Property Development Marketing.

At that $2,000 per square foot price, a two-bedroom condo at the Hell’s Kitchen project would cost roughly $1.5 million – a price “affordable for upper-middle-class New Yorkers,” according to Liang.

Luxury residential markets in both New York and other global core urban markets have seen signs of softening in recent months, leading to increased concerns over the future viability of new, high-end developments at exorbitant price points. [Bloomberg] – Rey Mashayekhi

Source: Xinyuan Hell’s Kitchen condo won’t be super-luxe

OpenDoor Labs’ website

The key to quickly selling a home may be a home-flipping startup.

San Francisco-based OpenDoor Labs Inc. pays for homes in cash then quickly resells the properties at an average $10,000 to $15,000 profit, the Wall Street Journal reported.

The company was founded in March 2014 and has, so far, bought and sold more than 200 homes, according to an analysis by Michael Orr, a real-estate expert at Arizona State University. The startup buys homes for an average $230,000 and pockets between $10,000 and $15,000, according to the newspaper. The company conducts a market analysis, makes an offer on the home and then resells the property within 90 days. The system is meant to appeal to sellers who need to move quickly.

“We’re introducing liquidity to a marketplace that doesn’t have any,” the company’s co-founder, Keith Rabois, told the newspaper.

The system is risky. As of mid-December, the company had 30 homes that it had failed to sell for at least six months. But Chief Executive Eric Wu said that in the case of a market downturn, OpenDoor would be protected because sellers would rush to ditch their homes and the startup could charge larger fees.

The decline in homeownership, in New York City and nationwide, has driven investors to bet big on multifamily properties. The Blackstone Group recently purchased the Caiola family’s Manhattan portfolio for $700 million. [WSJ] —Kathryn Brenzel

Source: This startup wants to pay cash for your home, then flip it

A rendering of 3 Sutton Place on the Upper East Side (inset: Joseph Beninati)

A community group — with backing of local politicians — has asked for a rezoning of Sutton Place, where Bauhouse Group plans a 900-foot tower on East 58th Street.

Last week, the East River Fifties Alliance filed an application with the Department of City Planning to impose height caps on new buildings east of First Avenue from 52nd Street to 59th Street.

That is right where Bauhouse Group is currently demolishing buildings on East 58th Street to make way for its 80-story, 270,000-square-foot tower. Sutton Place currently has no height restrictions under its currently zoning — something the activists are hoping to change.

“We are doing this so that the neighborhood isn’t ripped apart to the advantage of developers but to the ruin of the community,” said Alan Kersh, president of the East River Fifties Alliance, according to DNAinfo.

Bauhouse, led by Joseph Beninati, doesn’t seem bothered by the rezoning threat. A spokesman for the developer said the building will rise well before a potential rezoning could impact plans.

“We are moving forward with our project on an as-of-right basis and have already begun demolition,” the Bauhouse spokesman said. “Our project will be nearing completion by the time any rezoning would be heard.”

Bauhouse assembled the site in six different purchases for about $70 million. The tower, designed by Foster + Partners, is expected to cost around $650 million and feature 115 condos.

Beninati was seeking a partner for the project as recently as August, but told Crain’s that he’s retained the Carlton Group to sell the plan to domestic and foreign credit markets. Bauhouse received demolition permits in November for the project, which Beninati said he would like to see completed in spring of 2019. [DNAinfo] — Dusica Sue Malesevic

Source: Skyscrapers, stay off Sutton Place!: tenants

Di Fara pizza and Midwood

Is it Midwood’s time to shine? The South Brooklyn neighborhood, bordered by Sheepshead Bay and Flatbush and known as something of a suburban enclave, is rapidly changing as homebuyers retreat further south in search of value.

In recent years, immigrants from China, Eastern Europe and South Asia have spurred a boom in the Midwood housing market. The neighborhood was listed as one of the 10 hottest neighborhoods to watch for in 2016 by StreetEasy.

Renters and buyers are flocking to the South Brooklyn neighborhood in search of better prices, according to the Wall Street Journal. The median price for a condo in South Brooklyn was $525,000 in 2015, about half of the median condo sales price in northwest Brooklyn, the Journal reported.

“People who may have lived downtown or outside of Brooklyn are exploring and coming to Midwood, and they’re discovering it for the first time,” said Charles D’Alessandro, a real estate agent with Fillmore Real Estate.

Bakeries, bagel shops and kosher grocers populate the commercial sections on Avenues M and J. As development and a new wave of residents move in, older properties like the Vitagraph Studios motion picture complex have bitten the dust.

In September, StreetEasy reported that Midwood’s rental market had the quickest rental rate across the city, with leases being signed within 11 days of listing. [WSJ] — James Kleimann

Source: South Brooklyn’s Midwood has arrived

Halston, left, seated next to Bianca and Mick Jagger

From Luxury Listings NYC: On a gloomy December afternoon at the bar of the Four Seasons Hotel, a scandal-sensitive source slipped me a surprising but not altogether unlikely phone number, that of publicist and society columnist R. Couri Hay. Hay was the former teenage lover of the famed American fashion designer Halston, whose Upper East Side home was something of a legend in the Studio 54 era  —  when love was a bit freer and the nose-powdering a bit more aggressive. [more]

Source: A look back at Halston’s legandary UES townhouse

99 Washington Street, 163 Orchard Street and 171 Ludlow Street

Hotels are rising at rapid rates across Downtown Manhattan. Some are calling it the city’s biggest hotel boom ever.

“Overall, the city is undergoing the largest hotel boom in its history, adding over 18,000 rooms since 2010, with another 36,000 rooms in the pipeline and 12,600 of those rooms currently under construction,” Mark VanStekelenburg, managing director of PFK Consulting USA’s CBRE Hotels division, told the New York Post.

He added that the majority of the building is occurring in the Financial District and Lower East Side.

“Lower Manhattan hosted 6,300 of these new rooms, a 28 percent increase, since 2010, with another 10,700 rooms in the pipeline, of which 5,600 are under construction, representing 26 new hotels,” VanStekelenburg said.

According to the Post, the boom began a year ago, when InterContinental Hotels Group debuted the tallest Holiday Inn in the world — the 50-story, 492-room Holiday Inn Manhattan-Financial District at 99 Washington Street. It was followed by the Orchard Street Hotel at 163 Orchard Street, the Q&A Residential Hotel at 70 Pine Street and the Hotel Indigo at 171 Ludlow Street.

“There is a need for significant additional hotel product in Lower Manhattan,” VanStekelenburg said. “The market has historically been underserved by hotel rooms, and the new supply is very broad in product type and brand, resulting in new marketing distribution and access to new frequent guest programs.” [NYP] – Christopher Cameron

Source: Manhattan experiencing historic hotel boom

The record-setting apartment at One57, which sold for over $100 million, is valued at just $8.1 million by the city.

Deputy Finance Commissioner Michael Hyman told a hearing of the Assembly Committee on Real Property Taxation Friday that NYC’s property tax system is “broken” and is costing the city millions.

“It’s broken, but I don’t have a magic wand,” Hyman said, according to the New York Post. “There are inequities in the system.”

Currently the city values co-ops and condos by comparing them to “similar” rental units (which are sometimes regulated) in the area rather than sale prices. That means high-end properties are grossly undervalued.

It “can be problematic,” Hyman said. “High-end properties tend to pay lower taxes.”

George Sweeting, Deputy Director of the New York City Independent Budget Office, added that the city see a windfall of cash if the system was overhauled.

“If these dollars were instead included in the base, the overall tax rate could be reduced, although not without some redistribution of tax burdens,” he said.

Case in point: the record-setting apartment at One57, which sold for over $100 million, is valued at just $8.1 million by the city.

“It is apparent from the testimony that the entire process is flawed. The poorest of the poor are subsidizing the wealthy,” Assemblyman Mark Gjonaj said. [NYP] – Christopher Cameron

Source: Officials call for property tax overhaul

A living room in Fort Greene, Brooklyn, by Nina Etnier.

About 50 percent of the world’s population lives in cities. By 2050, it’ll be 70 percent. More people in cities means less room for everybody, which means we all need to learn how to live well in smaller spaces.

That’s why we talked to interior designers Nina Etnier and Kelly Martin about how to put together an awesome, if tiny, home.

Here’s what we found out.

Let’s start with layout. “Scale is an important thing that most people don’t think about when laying out their apartments,” says Martin, who’s based in Los Angeles.

A living room by Kelly Martin.

It’s important to measure out the apartment so no piece of furniture overpowers the room — it should strike a balance.

A dresser (and bar!) by Kelly Martin.

If you’re moving from apartment to apartment every few years, Etnier, who does a lot of work in New York, says to invest in pieces that are easier to move.

A Manhattan penthouse by Nina Etnier.

“A beautiful side table, a nice dresser, coffee tables,” she says. “Pieces that are going to work wherever you land.”

I guess peek-a-boo it is to make him happy. Nap time is overrated anyhow #butimsotired #arentyousleepyyet #morecoffeeplease

A photo posted by Morgan (@thewhitefarmhouse) on Jan 14, 2016 at 10:49am PST

“Get nice floor lamps and table lamps,” Etnier says. “Ambient light really affects things a lot.”

Our global eclectic self has fallen HARD for Danish design studio, @designed.for.living , founded by @noormeyjes and @jantiennunnikhoven . These superstar designers take vintage Moroccan baskets and place beautiful handmade silks stop them as their gorgeous shades. Shop their collection by heading over to their site: – first lamp is the “rainbow”, second is the “dots” and the third is “genie”. They also have our favorite magenta pink one that is jaw droppingly good. Wallpaper (drool!) is “wild trellis” #wallpaper #lamps #bhdecorscouting #designedforliving #dutchdesign #homedecor

A photo posted by Bedford & Hyde (@bedfordnhyde) on Jan 14, 2016 at 8:33am PST

“Artwork is a really good thing to spend money on,” Etnier says. “That can elevate your space more than an expensive side table.”

Our new night butterfly on a wall. #butterfly #night #interiors #bedroom #frame #graphics #sketch #tattoo #dotwork #cosy #blackandwhite #homedecor #home #wieprzstudio #design #wood #nature #animals

A photo posted by Wieprz Studio (@wieprzstudio) on Jan 14, 2016 at 12:29pm PST

And buy used. “You can get really nice things on auction and on Craigslist,” Etnier says. “Keep your eyes peeled, look for things that are really exciting for you.” Like this Instagram user did.

Reading #styled by @em_henderson this weekend got me inspired to dress up that mantel a little. Nothing feels better than changing up the look of a room using pieces you already own!

A photo posted by Anna Smith, Interior Designer (@annabode) on Jan 18, 2016 at 8:34am PST

Source: Interior design tips that everybody living in a small space should know

Buckingham-Palace

From Luxury Listings NYC: The future it here! Second only to full-on astral projection, Google’s cardboard virtual reality headset allows viewers to virtually tour up to 150 sites around the globe without leaving their couch. [more]

Source: Take a virtual tour through Buckingham Palace

From left: John Banks and Senate Majority Leader John Flanagan

Amid an environment of greater scrutiny following the recent political scandals in Albany, the Real Estate Board of New York slashed its campaign spending in 2015, according to an analysis of campaign finance records.

What’s more, with control of the state Senate possibly in play after the downfall of Senate Majority Leader Dean Skelos, REBNY’s donations have become more bipartisan.

Through its political action committee, REBNY has spent slightly more than $163,000 since Jan. 2015 in the current election cycle, campaign finance disclosures filed with the state’s Board of Elections show. That’s a 43 percent drop from the nearly $285,000 it spent by this point in the previous election cycle.

“Recent history might have made them [REBNY] a little more cautious,” said Suri Kasirer, one of the city’s top real estate lobbyists. Representatives for the trade group, which held its annual gala Thursday, did not respond to requests for comment.

While Democrats hold a strong majority in the state Assembly, the GOP controls the Senate by a narrow margin. And with Skelos awaiting a prison sentence, political observers say his seat and control of the Senate could be in play during the Legislature’s elections later this year.

When it comes to campaign spending in the Senate, REBNY has traditionally backed GOP candidates and committees. And while the group’s PAC started off supporting mostly GOP candidates in the first half of 2015, it later spread its campaign cash more evenly on both sides of the aisle.

Through the first six months of last year, REBNY gave nearly 75 percent of its Senate campaign contributions to Republicans. But in the second half of the year, GOP spending accounted for just 52 percent.

The largest recipient of REBNY cash in the upper chamber was Democratic State Senator Jeffrey Klein, who represents parts of the Bronx and Westchester Counties. Following the Democrats’ takeover of the Senate following the 2012 elections, Klein led a group of rogue senators called the Independent Democratic Conference that broke away from the party and caucused with Republican leadership.

Should elections in November leave the Senate hotly contested, Klein could prove to be a key figure.

Klein and his IDC campaign committee received a combined $10,000 from REBNY during the second half of the year, records show. In the six months prior to that Skelos had been the biggest recipient with $10,300.

Those who watch Albany closely say that REBNY, which represents the industry on a wide variety of issues, is apt to hedge its bets.

The Rent Stabilization Association, on the other hand, represents the owners of some 1 million housing units on a singular issue, and is more inclined to back GOP candidates.

“We make our contributions based on philosophy, said Frank Ricci, director of government affairs at the RSA. “In the State Senate, Republicans recognize private property rights, and our support is based on that.”

The RSA has spent more than $220,000 so far, up about 12 percent from the previous cycle. Nearly half of that cash went to the Senate Republican’s campaign committee.

Source: REBNY cuts campaign spending, becomes more bipartisan in Senate

From left: 156 William Street in the Financial District and Billy Macklowe

UPDATED, 5:45 p.m., Jan. 22: Billy Macklowe sold a majority stake in his 12-story Financial District office building at 156 William Street to LaSalle Investment Management for around $55 million last month.

Chicago-based LaSalle closed on a majority interest in the 250,000-square-foot building Dec. 31, with William Macklowe Co. retaining a minority and managing stake in the property. Adam Spies and Douglas Harmon of Eastdil Secured brokered the transaction.

Just a day before the LaSalle deal closed, Macklowe also sold two commercial condominium units at 156 William Street to an independent children’s school for $27.2 million.

The Blue School, which offers preschool to eighth-grade education, closed on the second- and third-floor units at the building, according to property records filed with the city Friday. The building is located only a few blocks from the school’s main campus at 241 Water Street.

William Macklowe Co. acquired 156 William Street from private equity firm Capstone Equities for more than $62 million in December 2013, with plans to convert the property into a medical services facility.

Macklowe eventually filed a successful condo declaration this past October that designated three commercial condo units at the office building — with one unit located on each of the property’s first, second and third floors, according to city property records.

The deal with the Blue School sees the institution acquire the units on the second and third floors created by the condo declaration. The Blue School did not return requests for comment.

A William Macklowe Co. spokesperson confirmed both the condo declaration and LaSalle’s investment in the building. Billy Macklowe did not return a request for comment, while the Macklowe spokesperson said he was unaware of the sale of the commercial condos to the Blue School.

Macklowe recently teamed with a subsidiary of Iowa-based Principal Financial Group to acquire a 14-story Hell’s Kitchen office building from Atlas Capital Group for $107 million, as The Real Deal reported.

Source: Billy Macklowe sells majority stake in 156 William Street to LaSalle for M

Is the office market in Downtown Brooklyn thriving? Did Barclays Center live up to its hype? What are the biggest projects to watch out for in the borough? BRIC TV spoke to The Real Deal‘s Hiten Samtani, Village Voice reporter Neil deMause and Azi Paybarah, senior reporter at Politico, this week about the state of Brooklyn development. 

They covered a lot of ground: the collapse of 421a, the modular tower at Pacific Park, rent rates, the State of the State address and office space downtown. Take a look at the video to learn more about some of the biggest development trends in the borough. [BRIC TV] —Kathryn Brenzel 

Source: What are the biggest trends in Brooklyn development?: VIDEO

Development site adjacent to New York Botanical Garden (credit: Google Maps via Curbed)

The New York Botanical Garden is getting in on the action in the Bronx, having issued a request for proposals for a “major” mixed-use development site located adjacent to the landmark institution.

The property in question sits on the southeast corner of Webster Avenue and Bedford Park Boulevard, one block from the New York Botanical Garden’s entrance. The site can accommodate roughly 300 residential units, a 125-room hotel and around 12,000 square feet of retail, the Botanical Garden said in a press release.

Developers have until 5 p.m. on March 1 to submit proposals for the parcel, with the Botanical Garden – which owns the acre-plus property – set to pick its favored option by the end of March, according to Curbed.

The redevelopment of the site – which is currently occupied by a supermarket, a parking lot and a laundromat – is made possible by the 2011 rezoning of an 80-block area in the Bronx, which was intended to spur residential development in areas previously zoned for commercial.

The New York City Economic Development Corp. issued a “vision plan” shortly after the rezoning that recast Webster Avenue as a “vibrant mixed-use” corridor for the borough.

But the area surrounding the Botanical Garden, near Fordham University’s Rose Hill campus, has yet to see the sort of development that promises to transform South Bronx neighborhoods like Mott Haven and Port Morris. [Curbed] – Rey Mashayekhi

Source: NY Botanical Garden issues RFP for Bronx parcel

Rendering of Empire Stores in Dumbo (credit: Midtown Equities) (inset: Joe Cayre)

Aptly-titled Los Angeles advertising firm 72andSunny is expanding its footprint in the city after agreeing to take 50,000 square feet at the massive Empire Stores office conversion in Dumbo.

The company, which currently occupies 13,000 square feet at the 30 Cooper Square office building a few blocks south of Union Square, will be scaling up its New York operations at the former coffee warehouse in Dumbo.

Joe Cayre’s Midtown Equities is leading a partnership that is redeveloping the property into 400,000 square feet of high-end office and retail space, according to Crain’s. The $150 million Empire Stores complex, set for completion in June, will have restored brick-and-timber interiors and feature two new floors of glass-enclosed office space that takes the warehouse’s floor count to six.

72andSunny will be taking a portion of that new glass-enclosed space being added to the top of the warehouse, sources said, with the rest of its offices on the property’s existing floors. It is not clear whether the Dumbo space will be an additional office for the ad firm or whether it will move its employees to Dumbo from 30 Cooper Square.

Empire Stores’ eye-popping asking rents are indicative of Midtown Equities’ faith in the Brooklyn office market, with the landlord asking $80s per square foot for the building’s best space. Alongside similarly ambitious office developments in the borough, like the nearby Dumbo Heights project and Sunset Park’s Industry City, the conversion hopes to appeal to creative and TAMI tenants who are being increasingly drawn to Brooklyn.

Furniture retailer West Elm committed to about 150,000 square feet at Empire Stores for its headquarters and flagship retail store in 2013. [Crain’s] – Rey Mashayekhi

Source: LA ad firm taking 50K sf at Empire Stores in Dumbo

Port Authority Bus Terminal in Midtown (inset: Jodi Pulice)

When it comes to the Port Authority Bus Terminal in Midtown, retail just might be the answer.

JRT Realty Group and Cushman & Wakefield are working on a makeover of the much-derided bus depot that will look to re-tenant 150,000 square feet of retail at the property and add another 13,000 square feet along Ninth Avenue.

Around 125,000 people pass through the Port Authority Bus Terminal each day, according to the New York Post, and the sheer volume of foot traffic provides an opportunity to not only reposition the terminal and give it a long-overdue facelift — boosting its appeal to both retail tenants and the general public.

“That’s what we are changing,” JRT Realty CEO Jodi Pulice told the Post. “The perception.” Retail stores will be remodeled to fit a new, uniform design at the terminal, giving it a “tighter and organized” look that “will brighten it up.”

Buses will also be relocated to accommodate the addition of more stores. Some ticketing locations have already been moved and gates reassigned to accommodate upgrades to the depot’s ceilings, mechanicals and Wi-Fi infrastructure.

There’s also a new food court in the works that promises greater dining options for travelers, with a 10-year lease with OHM Concession Group for about 6,000 square feet over three spaces set to bring in around $15.2 million for the Port Authority.

The long-term future of the bus terminal remains in doubt, however, with ongoing discussions over a new West Side location that could see the current terminal replaced by a condo tower. [NYP] – Rey Mashayekhi

Source: Port Authority Bus Terminal set for retail makeover

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(All photos by Adam Pincus and Alistair Gardiner for The Real Deal)

In a sense, this year’s REBNY awards banquet was the same as always. All the bigwigs were there, no one paid attention to the speeches, and REBNY grandees incessantly shushed the audience – to no avail. And yet, something was different: despite the record year that just ended, many attendees displayed a palpable sense of anxiety.

“Everyone knows there’s a big dark cloud hanging over our heads,” said real estate attorney Adam Leitman Bailey.
Scott Rechler, CEO of RXR Realty, expressed concern about global stock market turmoil and the recent slowdown in China, which could herald a broader economic slump. “Everyone’s trying to calculate what’s happening globally,” he said at the cocktail reception before the awards dinner.

Justin Elghanayan of Rockrose Development said that many local players were biding their time until the bubble pops before they start buying again. Ken Horn of Alchemy Properties said though the moderate range of the residential market would remain robust, “over $5,000 a foot, there will be some issues.”

Marc Holliday, CEO of SL Green Realty, spoke of a “lot of unknowns” in the year ahead. “You’ve got the energy market, and its potential impact on the financial sector — there are a lot of distractions,” he said. Still, he added, the New York property market would continue to be a magnet for investment, as the underlying real estate is a sure thing.

“It takes more than a little stock market bump to get this crowd down,” he said.

Mayor Bill de Blasio mingled with industry execs such as Bill Rudin, MaryAnne Gilmartin and Gary Barnett more openly and for longer than his predecessors have in the past, which left an impression on the crowd. Other politicians in attendance included Deputy Mayor Alicia Glen, HPD Commissioner Vicki Been, City Planning Commissioner Carl Weisbrod and Manhattan Borough President Gail Brewer.

Politics was certainly a hot topic at the event, as attendees debated the uncertain future of the 421a tax abatement program. Some said the end of the abatement would slow down the pace of development. Though City Council Member Jumaane Williams described 421a as a “horrible” program, he said an alternative was needed to ensure the city gets more housing, and that it was part of his job to work with REBNY to make it happen.

Dottie Herman, CEO of Douglas Elliman, said the industry was closely following the upcoming presidential election.

“Right now a lot of people are looking at what the policies will be down the road,” she said.  And could developer Donald Trump actually win? “I actually think Trump could do it,” Herman said. When asked if a President Trump would be good for the industry, she said this: “I think whoever wins should know something about business.” (The GOP front-runner, at least to TRD’s knowledge, was not in attendance.)

Others were more openly optimistic. Burt Resnick, chairman and CEO of Jack Resnick & Sons, a firm his father founded in 1928, said he felt confident the market would continue to prosper — “as long as the economy holds.”

“Capital wants to be here,” said Joe Harbert, president of the Eastern region at Colliers International

Savanna’s Chris Schlank said that though everyone was a little anxious about what 2016 would bring, his firm also smelled opportunity. “We like debt, we like distressed stuff,” he said.

Somewhat lost in all the chit-chat was the fact that actual awards were handed out. Daniel Brodsky of the Brodsky Organization won the Harry Helmsley Distinguished New Yorker Award for “invaluable contributions to New York’s civic welfare and the real estate community.” The late Matthew Stacom, Darcy Stacom (CBRE) and Tara Stacom (Cushman & Wakefield) jointly won the Bernard H. Mendik Lifetime Leadership in Real Estate Award. Douglaston Development’s Jeffrey Levine won the night’s humanitarian award, while Savills Studley’s William Montana, SL Green’s Edward Piccinich and Olmstead Properties’ Steven Marvin were also honored. “I feel like the MVP on an all-star team,” Levine said, when accepting his award.

For John Banks, president of REBNY, this was his first gala in charge. “I was here last year as a witness,” he joked. Addressing the hint of trepidation in the market, Banks said that real estate players go into the business with “an understanding that there is a business cycle.”

“We’ve got solid financials,” he added, “and all our members are still doing plenty of deals.”

A small group of protestors had waited outside at the beginning of the gala, greeting guests with hoots and riling against a host of development issues, including upzoning, Extell Development’s Lower East Side project at 250 South Street (a placard described it as the “building from hell). Some held photos of de Blasio with Banks’ predecessor Steven Spinola, declaring the mayor a “sellout.”

When asked about protestors outside, Banks said he hadn’t seen them, but insisted they had a right to be there. “I love the First Amendment,” he said.

(Mark Maurer, Rich Bockmann and Katherine Clarke contributed reporting.)

Source: Real estate toasts itself at 2016 REBNY gala, but anxiety abounds: PHOTOS

From left: Sylvestor Smolarczyk and Joshua Zegen (credit: LinkedIn)

SMK Property Management has filed a $150 million lawsuit against Madison Realty Capital, alleging that the real estate investment firm is a predatory lender that was out to grab its properties or rake in massive default interest.

Jozef and Sylvester Smolarczyk, the father and son development team that runs SMK Property Management, has accused Joshua Zegen’s Madison Realty Capital of 15 counts of fraud. The lawsuit stems from seven defaulted mortgage notes that Madison Realty bought from New York Community Bank in 2011, the Commercial Observer reported. The notes were backed by seven Greenpoint properties owned by SMK, and the Smolarczyks allege that Madison Realty bought the mortgage notes at a discount by bribing the bank.

The developers allege that they were pressured into forbearance agreements at the threat of foreclosure, and then were bombarded by default interest and per diem. The Smolarczyks decided to take out more loans in 2013 to pay off the real estate investment firm. What the father and son didn’t realize, however, was that the lender of the loan was actually Madison Realty Capital. So, they were essentially trying to pay Madison Realty Capital back by borrowing more from the real estate investment firm.

The developers allege that they believed CLS Investments to be the lender up until the term sheet was executed, and then Jozef Smolarczyks felt too pressed for time to pull out. After closing on the loan, SMK tried to sell four properties and sought another permanent loan to refinance its debt with Madison Realty Capital, according to the lawsuit. But they ran into unforeseen obstacles: Closing documents revealed terms that guaranteed large sums of money if any properties were sold, and Madison Realty blocked attempts at refinancing, according to the lawsuit. Zegan’s attorneys have filed a motion to dismiss the lawsuit, and the case has been adjourned until March.

According to Zegen, SMK owes Madison Realty $15 million. [NYO] — Kathryn Brenzel 

Source: SMK hits Madison Realty Capital with 0M lawsuit over alleged “predatory lending”

From the January issue: Sciame founded his eponymous construction company in 1975 and to date has completed more than 1,000 projects in NYC. The firm, which currently has more than $1.5 billion worth of projects underway, has handled a slew of high-profile developments, including the exterior restoration of the Guggenheim Museum, part of the High Line and Edward Minskoff’s 400,000-square-foot angular, glass office tower at 51 Astor Place. Current projects include the Culture Shed, a visual and performing arts center that will be located on city-owned land within the Hudson Yards area. In 2014, the firm ventured out of NYC and launched Palm Beach-based Sciame Homes, which builds spec houses. [more]

Source: The Closing: Frank Sciame Jr.

Ziegfeld Theater in Midtown (credit: Google Street View)

The city’s last single-screen movie theater is calling it quits.

The struggling Ziegfeld Theater at 141 West 54th Street will close its doors in the next couple of weeks to make way for its latest incarnation: The Ziegfeld Ballroom.

The 21,331-square-foot space will host galas and corporate events after it undergoes a major renovation, landlords Fisher Brothers and Core Ziegfeld LLC announced in a statement. The partners, who own and operate Gotham Hall, inked a 20-year lease at the space. Anthony Dattoma and Susan Kurland of CBRE represented Core Ziegfeld. Fisher Brothers was represented in-house by Marc Packman.

The renovated building will be able to host 1,200 people for receptions and between 800 to 1,000 guests for seated events. The revamped building will feature a 10,000-square-foot ballroom and five meeting rooms, the New York Post reported. The design, by architect Richard Bloch, will be in an art-deco style to honor Florenz Ziegfeld’s original 1927 theater, which was replaced by the current movie theater in 1969. It will re-open in fall of 2017.

For now, the movie theater will continue to show its final movie, “Star Wars: The Force Awakens.” [NYP] — Kathryn Brenzel

Source: It’s curtains for Ziegfeld: Iconic theater to become event space

From left: Time Warner Center, One57 and President Obama

Buyers of luxury Manhattan real estate, whose purchases are often shielded by limited liability corporations, will be thrust into the spotlight come March, when new federal disclosure requirements take effect.

But the new order doesn’t necessarily signal the end of anonymous buyers – should they find they have the appetite for financial gymnastics.

“If you’re looking to hide money, you’ll find a way to do it,” said Jonathan Adelsberg of law firm Herrick, Feinstein, who emphasized that many buyers who want to shield their purchase aren’t committing fraud. “The irony is, if you’re engaging in money laundering, and things are really un-kosher, you don’t care about the provision of a contract,” he said.

In an effort to uncover illicit funds being laundered through luxury New York real estate, the U.S. Treasury said Jan. 14 that it would start tracking cash purchases in Manhattan made through shell companies. The order, which takes effect in March, applies to deals $3 million and up and requires title insurance companies to hand over the buyer’s identity to government regulators.

Though it’s hard to pinpoint exactly how many such deals take place each year, the use of LLCs – both legal and illicit – has proliferated the city’s residential sales market. And many of those buyers may want to preserve their privacy, despite the new order.

Attorney Terrence Oved, a founding partner at Oved & Oved, said there are ways to navigate the requirements and “still be within the letter of the law.”

Adelsberg said ironically, developers typically vet super high-end buyers even before those buyers walk into the condominium’s sales office. “You don’t just walk in. The last thing a [developer] wants to do is find themselves in a dispute with a buyer who doesn’t have the financial wherewithal to close.”

According to attorney Ed Mermelstein, a founding partner of Rheem Bell & Mermelstein LLP, the order doesn’t have much weight, other than to possibly scare off foreign investors. “Everyone is asking the same questions: How do you get around this?” he said, adding that the current order doesn’t carry much weight.

“If you’re looking to prevent money laundering, you don’t implement something for six months. You don’t limit it to markets. And make it permanent,” said Mermelstein. “Don’t allow people to think, ‘In August we can go back to business.’”

Here are seven strategies shy buyers are likely to employ come March, according to a variety of experts The Real Deal interviewed:

1. Use a straw buyer
Theoretically, a buyer can have a “nominee agreement” with their chauffeur, whereby the chauffeur is the named owner of an LLC that is buying a high-priced condo. Once the transaction is complete, the buyer can purchase the LLC – not the actual condo – from the chauffeur. The transaction would not be on the books.

2. Set up a trust, partnership or other non-LLC
While all members of an LLC must be identified, other legal entities only need to disclose owners who hold more than 25 percent ownership. If a shell company with 100 shares is divided equally among 10 people, therefore, they all remain anonymous.

3. Pay with a wire transfer
Regulators are only scrutinizing buyers who pay with cash or a certified bank check. Pay with a wire transfer, and you avoid this order. However, tight banking regulations will require identification as part of “Know Your Customer” regulations.

4. Forgo title insurance
What’s a $1 million lawsuit when you’ve just spent $50 million on a white-glove condominium? Industry execs said it’s rare – but buyers could forgo title insurance altogether.

5. Wait six months
The order takes effect March 1 and currently is due to expire August 27. So a jumpy buyer could simply wait six months to make a purchase. (If said buyer wants to gamble that the program won’t be extended, they could schedule a closing for August 28.)

6. Buy commercial
File this under “obvious,” but the current order is limited to residential purchases in Manhattan above $3 million. Commercial purchases are excluded, so buyers can still purchase investment properties in relative anonymity.

7. Buy in Brooklyn
There may not be as many trophy condos on the market in Kings County, but the Treasury Department’s order excludes this borough, so enterprising buyers could cross the river. And the Feds aren’t scrutinizing deals under $3 million. How do those $2.9 million condos look now?

Source: 7 ways to avoid the new LLC disclosure law

From left: One Wall Street in the Financial District and a rendering of the building’s residential conversion (credit: Robert A.M. Sterns Architects) (inset: Harry Macklowe)

Harry Macklowe’s $1.5 billion residential conversion at One Wall Street won’t be held up by any musty history buffs.

The city’s Landmarks Preservation Commission approved the developer’s plan to build 524 resi units at the building – half condominiums, half rentals – within 848,000-square-feet of residential space, NY YIMBY reported.

The converted building will also have about 95,000-square-feet of retail space, for a total of 944,000 square feet. RKF is marketing that space. Whole Foods is in talks to potentially set up a store there.

Robert A.M. Stern is the designer on the project.

Macklowe bought the building in 2014 for $585 million. He’s seeking $100 million in EB-5 funding to convert part of the cost of the conversion. [NY YIMBY] – Ariel Stulberg

Source: Landmarks approves Macklowe’s One Wall Street resi conversion

Wang Jianlin

Dalian Wanda Group, China’s largest developer, is accelerating its expansion into lines of business outside of real estate as the country’s property market continues its slump.

The company is looking to make five “substantial” acquisitions this year, with a focus on sports and the entertainment industry, the company’s CEO Wang Jianlin, China’s richest man, said at a briefing Tuesday.

In a separate announcement, the firm predicted its sales will drop 12 percent in 2016, Bloomberg reported.

The firm, known for its massive mixed-use Wanda Plazas, owns hundreds of properties throughout China, but has expanded into other business, especially entertainment, in recent years.

Wanda bought Legendary Entertainment – the Hollywood studio behind “Jurassic World” and other films – for $3.5 billion late last year. It bought AMC theaters, the U.S.’s second largest movie theater chain, in 2012 for $2.6 billion.

The firm owns no properties in New York, though it has considered major hotel purchases here in the past. It recently closed its only office in the city, at 1330 Sixth Avenue. [Bloomberg] – Ariel Stulberg

Source: Wanda seeks “substantial” buys amid weak Chinese RE market