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In December, The Real Deal first reported that Scott Rechler’s RXR Realty was on the verge of a $1.7 billion deal to acquire the massive 42-story office tower at 1285 Sixth Avenue in Midtown.

RXR has now closed on the deal, according to Crain’s, marking one of the city’s biggest commercial transactions of the year. Its partner on the deal is real estate investor David Werner, according to the Commercial Observer, which noted that the duo financed the purchase with $1.2 billion in loans from AIG and Morgan Stanley.

RXR also signed an agreement with UBS to remain as the 1.8 million-square-foot building’s anchor tenant. The Swiss bank will hold on to its its 900,000 square feet at the property, where it occupies floors eight through 20 and floors 37 through 39. UBS’s new deal will run through 2032.

The distinction for the city’s largest office building deal of the year belongs to California pension fund CalPERS’s $1.9 billion acquisition of 787 Seventh Avenue, a 51-story, 1.7 million-square-foot office tower located adjacent to 1285 Sixth. CalPERS closed on that building in February.

AXA Financial, the U.S. arm of French insurance firm AXA, formerly owned both buildings, with 1285 Sixth owned through a joint venture between AXA and JPMorgan Asset Management. AXA put the adjacent properties up for sale last summer and was seeking as much as $4 billion for the two buildings combined.

The acquisition of 1285 Sixth will also likely be eclipsed by Citigroup’s purchase of its Tribeca headquarters complex, at 388-390 Greenwich Street, from SL Green Realty for around $1.8 billion. That transaction is expected to close next month.

Meridian Capital Group’s Rael Gervis and Drew Anderman brokered the loan deal for 1285 Sixth, while Eastdil Secured’s Adam Spies and Doug Harmon brokered the sale.

[Crain’s and CO] – Rey Mashayekhi

Source: RXR scores .2B in loans to close on 1285 Sixth purchase

From Luxury Listings NYC: Fashion designer Alexander Wang has just listed his 2,550-square-foot loft at 39 Worth Street for $3.75 million. The designer purchased the Tribeca pad in 2010 for $2 million from fashion writer Holly Brubach. [more]

Source: Alexander Wang’s stylish Tribeca loft hit the market for M

Gurpreet Singh, a Jamaica, Queens-based investor, is in contract to acquire a three-floor retail condominium unit in Chinatown for $28 million, sources told The Real Deal.

Singh’s Jamaica Woods Holding LLC is paying $1,664 per square foot for the nearly 17,000-square-foot property, consisting of the first three floors and basement of a 15-story, 58,000-square-foot commercial condo building at 11 East Broadway, on the corner of Catherine Street.

Jamaica Woods will acquire the space – currently triple net leased to HSBC Bank for the next eight years, plus a 10-year tenant renewal option — from a consortium of Chinese American professionals who own many of the office condos at 11 East Broadway, sources said.

The professionals, largely doctors and lawyers, either have their own offices in the building or rent them out to accounting, dental or legal tenants. They also developed the Wyndham Garden Chinatown, a 106-room hotel located nearby at 93 Bowery.

Kevin Salmon and Christian Wood of Midtown-based Khizer Property Advisors represented both the buyer and the seller. Salmon confirmed the transaction, and said Khizer is also representing the seller consortium as it prepares to put the office condo units it owns on the upper floors of the building on the market in the coming weeks.

Singh is buying the retail condo at a 4.4 percent cap rate as part of a 1031 exchange, having recently sold a Jamaica apartment building.

The investor was drawn to “the stability of the tenant as well as the long-term potential of the property and location,” Khizer said in a statement announcing the deal, and remains in the market “to acquire additional properties up to $20 million that are a 4.2 percent cap or greater.”

Neither Jamaica Woods nor the selling consortium could be reached for comment.

In 2013, Kee Lin, a former property manager at 11 East Broadway, pleaded guilty to stealing more than $1.5 million from the building’s business account – and that of another building at 128 Mott Street – through writing authorized checks. Kee was sentenced to up to three years in prison.

Source: Queens investor in contract on Chinatown retail condo for M

Town Residential, the six-year old residential brokerage headed by Andrew Heiberger and Joseph Sitt, is in late-stage talks to merge with Beverly Hills-based brokerage the Agency, according to several people with knowledge of the negotiations.

It’s unclear what a potential merger would mean for Town’s ownership structure or its brand, but a deal would give both parties a bi-coastal presence.

Heiberger, who is CEO and co-chairman of Town, told The Real Deal that no deal was final, but confirmed that conversations were taking place, saying he was currently talking to Sitt about whether a potential deal could make sense for Town.

“We’re considering what it would mean for the merging of the brands, the overall management and the business plan,” he said.

Heiberger and Sitt have been co-owners of the firm since 2012, when Sitt was brought on board as an investor and became co-chairman. But for more than a year, rumors have swirled that Sitt was looking to exit his stake, the value of which is unclear.

Town closed $872.9 million in sell-side deals last year, up 65 percent from 2015, according to TRD’s most recent brokerage ranking. Its new development exclusives comprise projects co-developed by Sitt, who’s converting a former office building to luxury condos at 212 Fifth Avenue in partnership with Madison Equities and Building and Land Technology.

Representatives for the Agency, the high-end boutique brokerage run by L.A. brokers Billy Rose and Mauricio Umansky, were touring the offices of Town along with Bert Dweck, an executive vice president at Thor Equities, Sitt’s investment firm, TRD reported last month.

Umanksy, who has a recurring role in “The Real Housewives of Beverly Hills,” did not respond to several requests for comment.

Despite its small geographic footprint, the Agency does significant business through a handful of top agents. Umansky placed third on the Real Trends/Wall Street Journal list of top residential agents in 2015, with more than $604 million in closed sales. In January, he co-listed the Playboy Mansion in Beverly Hills for $200 million.

In March, the Agency hired Westbrook Partners’ Jason Glasgow to lead the firm’s nascent new development arm. Umansky recently said he’s looking to expand the company’s footprint on the West Coast by opening three new Bay Area offices.

Source: Town Residential in late-stage talks for merger with LA brokerage: sources

Of all the skills it takes to be a developer in this town, assemblage is perhaps the trickiest, riskiest and most rewarding. At The Real Deal‘s New York Real Estate Showcase and Forum on May 12, Continuum Company’s Ian Bruce Eichner sat down with TRD‘s managing web editor, Hiten Samtani, to talk about how he does it.

Focusing on his project at 45 East 22nd Street, Eichner compared the high-stakes process to the HBO hit series, “Game of Thrones,”breaking down the entire saga from the first air rights he acquired to the final deal he made.

To see the whole story, watch the above video.

For more videos, visit The Real Deal’s YouTube page.

Source: Bruce Eichner on the “Game of Thrones” of assemblage: VIDEO

Media baron David Geffen cut a giant check this week – figuratively, we assume – to fund part of the Museum of Modern Art’s expansion of its Midtown space.

The Geffen Records founder and DreamWorks SKG head donated $100 million to the museum, which is planning a major renovation, plus a roughly 50,000-square-foot expansion, the largest single donation yet to the effort, the Wall Street Journal reported.

The museum plans to christen three floors of new gallery space the David Geffen Galleries in his honor.

The Lincoln Center for the Performing Arts named a hall after Geffen as well, after he gave it $100 million last year.

MoMA bought the property adjacent to its West 53rd Street location, the former home of the American Folk Art Museum, for $32.1 million in 2011. The museum is expanding its lobby, and creating theaters, a library, classrooms and gardens, along with the new gallery spaces.

The project, slated to cost about $440 million total, is set to be complete around 2019-2020. MoMA’s fundraising campaign – the cash from which will also fund the museum’s operations and top up its endowment – has brought in about $650 million over the last two years. [WSJ] – Ariel Stulberg

Source: David Geffen donates 0M for MoMA renovation

The Empire State Development Corp. on Thursday shifted funding sources for the $21.9 million it approved in January for BFC Partners’ Empire Outlets retail development on Staten Island.

The quiet changing of sources comes as Dean Skelos, the former state Senate majority leader, and Sheldon Silver, the former assembly speaker, face sentencing for convictions on corruption charges.

Of the $21.9 million, $16.5 million will not come from Transformative Investment Program, which Skelos created, but rather from the New York Works Economic Development Fund, Politico reported. Cuomo created New York Works in 2012 and money was allocated during the state’s 2015-2016 budget, according to Politico.

The switch was not discussed at the EDC’s meeting and spokesperson did not explain the change, but told Politico the project qualified for funding under both programs.

The Cuomo administration has steered nearly $47 million in state subsidies to the project, which state officials say is expected create more than 1,300 permanent jobs. Next to the St. George Ferry Terminal, Empire Outlets will include restaurants, shops, parking and a hotel, Politico reported. The development is one of several, alongside the New York Wheel and Triangle Equities’ Lighthouse Point, that look to transform the borough’s North Shore.

BFC Partners contributed $85,000 to the governor’s reelection campaign.

The project also received $25.3 million from New York City agencies and $1.5 million from the office of the Staten Island borough president. [Politico] — Dusica Sue Malesevic

Source: State switches funding source for BFC Partners’ Empire Outlets

RXR Realty took a big loan from the Bank of China and SL Green Realty for its remaining stake in 61 Broadway.

The developer, led by Scott Rechler, closed on a $290 million mortgage on the firm’s 51 percent interest in the 33-story, 786,000-square office property.

RXR sold 49 percent of the building to an affiliate of China Orient Asset Management for $216 million, valuing the property at $440 million. 

The sale closed this week.

The loan was reportedly composed of a $240 million mortgage from Bank of China and $50 million in mezzanine financing from SL Green, the Commercial Observer reported, citing a source familiar with the deal.

The company bought the Financial District office tower for $330 million in May 2014.

Bjarke Ingels Group occupies the property’s penthouse. Law firm Godsky & Gentile and financial services company Samuel A. Ramirez & Co. also have space there. [CO] – Ariel Stulberg

Source: RXR takes 0M mortgage on 61 Broadway

From the April issue: EB-5 investors by definition live outside the U.S., sometimes thousands of miles away. But it ultimately falls on them to determine which real estate development projects in NYC (or elsewhere in America) are safest to put their cash in. That can be a tough task since developers are trying to woo them and present their projects in the best possible light.

While many EB-5 projects get successfully finished, there are plenty of exceptions. Read on for a closer look at four New York projects that are facing problems while courting EB-5 cash. [more]

Source: Are these New York EB-5 projects dead or alive?

 

When the moderator brought up Manhattan West, just a few blocks from Hudson Yards, Related Companies’ Michael Samuelian took a jab at its developer Brookfield Properties. “They’ve had that site for 30 years and nothing happened, and we started building well before they did, and now they’re catching up to us.”

At a panel held by the Harvard Architecture and Urban Society and moderated by The Real Deal’s Publisher Amir Korangy, Samuelian, architects on the project and a City Planning official discussed the progress of Related’s $20 billion Hudson Yards project, which the developer says will draw roughly 125,000 people a day. The panelists described Hudson Yards as both an extension of Midtown and its own unique neighborhood.

However, there remain uncertainties as Related continues to plan out the western yards and the future of the Jacob Javits Convention Center. Once Hudson Yards is built out in the next 20 years or so, the one-story building will be placed in what is a densely zoned part of the city, Samuelian said. Gov. Andrew Cuomo recently launched efforts to pump $1 billion into expanding the center, following a recent $500 million renovation.

“They just spent a lot of money on it, so I don’t think it’s going to go anywhere anytime soon,” he said. “I think their expansion plans are smart because they’re basically trying to consolidate their assets on sites and then get rid of excess real estate to help pay for it. I think the plan is good but big picture, as a city, we should think about, is this the right place for a convention center?”

When Korangy asked where he’d prefer a convention center to be located, Samuelian said a different property owned by Related.

In terms of the project’s design, building on top of the rail yards presented a series of engineering challenges. John Ridenour, associate of the Nelson Byrd Woltz Landscape Architects, said that cooling systems had to be integrated into the 26-acre platform to curb heat from the tracks. Without the cooling devices, the platform could reach upwards of 140 degrees Fahrenheit, a temperature that would not bode well for vegetation planned for the top of the platform.

Two of the towers — 10 and 30 Hudson Yards — were designed to appear as if engaged in a sort of perpetual dance, said Marianne Kwok, a director at architecture firm Kohn, Pedersen and Fox. The former faces the Hudson River, while 30 Hudson Yards tilts toward the city.

“There’s a whole history of pairs of towers on the west side, that in this particular case, one was always going to be smaller than the other, so they couldn’t be twins.” she said. “As you go around the city, and kind of walk around, the whole way that you see the building changes, and that was intentional.”

Source: Tracking Hudson Yards: What’s in store for the B project?

Donald Trump won big in New York’s Republican primary Tuesday, but it wasn’t because of his support among his tenants.

The GOP frontrunner received just 23 votes in the precinct that includes Trump Tower, an area roughly bordered by Fifth and Park avenues and 56th and 60th streets, according to election returns published by the New York Times and highlighted by Quartz.

Trump Tower has 238 luxury rental units, so, at the very most, he won the support of just roughly 10 percent of his tenants.

That number is likely much lower in reality, as it assumes that not a single person in the surrounding buildings supported the developer-and-TV-star-turned-politician.

Still, those 23 votes were more than enough to win a clear majority of Republican votes in the precinct. Ohio Governor John Kasich collected 17 votes in the area, while Texas Senator Ted Cruz got just one.

Maybe the modest total isn’t such a mystery. “Come on,” tweeted tech executive @BrettTopche, “who actually likes their landlord?”

Citywide,Trump won 64.3% percent of the Republican vote on his way to a dominating 60 percent victory in the state. Former Secretary of State Hillary Clinton won with 58 percent of the vote on the Democratic side.

At his Trump Tower victory speech Tuesday night, Trump shouted out Vornado Realty Trust boss Steven Roth and Douglas Elliman chairman Howard Lorber, who’d come to cheer him on. [NYT, QZ]

Source: Just 23 Trump Tower tenants – maximum – voted for Trump

The luxe penthouse that was once home to newspaper titan William Randolph Hearst has a new owner, who shelled out $20 million for the space.

Art collector and businessman Benedict Silverman sold the penthouse at 137 Riverside Drive on the Upper West Side to an unknown buyer, according to property records filed with the city on Wednesday. The triplex spans roughly 7,000 square feet and features an additional 10,000 square feet of outdoor terraces. The buyer of the home, listed only as The AH 2012 Family Trust, couldn’t immediately be further identified. One of the brokers for the sale, Joy Handler of the Corcoran Group, would not name the buyer.

The penthouse took a $14 million price cut last year, following its initial listing price in 2014 for $38 million. Property records show the sale closed at an even lower $20 million. The New York Post first reported the sale.

Hearst bought the whole building, called the Clarendon, in 1913 for $950,000, according to the Wall Street Journal. He lost the building in 1930 due to foreclosure, and the five-story apartment he built for himself was broken into smaller units. The triplex is part of that original apartment.

Source: William Randolph Hearst triplex sells for M

General Growth Properties and Joe Sitt’s Thor Equities’ are planning to create five new floors of office space at 685 Fifth Avenue, above Coach’s new flagship store. 

The store, which has been dubbed the “Coach House,” is part of the luxury handbag retailer’s strategy to rebrand itself by focusing on prime locations and reducing its footprint elsewhere. GGP announced the 23,400-square-foot lease in February.

Coach will be paying around $4,000 a square foot in rent for the corner spot at West 54th Street — not unheard for that stretch of Fifth Avenue, 6sqft reported. The store is slated to open in the fall, according to the website.

The developers are planning to redistribute space from the lower floors to create five new floors of office space will be added to the 20-story building, raising its height from 227 feet to 292 feet, 6sqft reported.

In 2014, Chicago-based GGP and Thor purchased the building for more than $460 million from Gucci.

Coach’s corporate headquarters will be at Hudson Yards. [6sqft] — Dusica Sue Malesevic 

Source: GGP, Thor plan to bump 685 Fifth Avenue by five stories

From the April issue: Remember back in December, when the median price of a Manhattan apartment crossed the $1 million mark for the first time? Brace yourself — the market just topped the $2 million threshold.

The average sales price jumped 18.4 percent to $2.05 million during 2016’s first quarter. That’s up from $1.7 million at the same time in 2015, according to Douglas Elliman’s latest quarterly market report. (The median price for the overall Manhattan market, meanwhile, was $1.1 million, up 17.3 percent.) [more]

Source: Manhattan hits M milestone – but can it hold?

Douglas Elliman may be making moves all over the country, but it continues to show love to its hometown of New York.

The brokerage just inked a deal to remain at its current headquarters at 575 Madison Avenue for another 15 years, and will expand into 100,000 square feet up from 60,000, Howard Lorber, chair of the firm, told The Real Deal.

Elliman is upsizing to four full floors from 2.5 floors at the Steinberg & Pokoik Management-owned tower, located between East 56th and East 57th streets.

The deal puts an end to speculation that the firm would relocate its headquarters to Park Avenue.

“It’s the center of Midtown,” Lorber said of his reasons for remaining at the property. “It’s convenient for our people.”

No brokers were involved in the deal, which was negotiated directly between Elliman and the landlord. Lorber said the company is planning a major renovation to its existing space and has temporarily leased an extra floor at the building so brokers will have a place to work while their floors are being gussied up.

He declined to comment on the financial terms of the deal, but asking rents in the neighborhood for Class A space average around $70 a foot, according to a recent report from Colliers International.

Source: Douglas Elliman expands at 575 Madison

Brookfield Asset Management created a new global real estate investment fund, its second, this time worth $9 billion.

The firm closed on its Brookfield Strategic Real Estate Partners II vehicle, which will invest in properties in Europe, Australia, Brazil and across North America, Bloomberg reported.

The fund raised money from over 100 investors, featuring a large number of Asian funds and insurance companies, as well as sovereign wealth funds, pension funds and large financial institutions. Brookfield itself kicked in $2.3 billion.

The vehicle exceeded the company’s original target of $7 billion, and is over twice as large as the BAM’s first real estate fund, which closed in 2013 at $4.4 billion in total commitments.

About 45 percent of the cash is already committed, Brian Kingston, the CEO of BAM’s parent firm, Brookfield Property Group, said in a news release.

Back in February, BAM struck a deal with Rouse Properties to take over its massive mall portfolio, valued in the deal at about $2.8 billion. Toronto-based Brookfield Property Group is developing the Brookfield Place complex in lower Manhattan. [Bloomberg] – Ariel Stulberg

Source: Brookfield Asset Management raised B real estate fund

It seems that he’s not a lone wolf after all. A real-life inspiration for a minor character in Martin Scorsese’s “The Wolf of Wall Street” has enlisted the help of brokers — and employing a hefty, nearly $19 million price chop — to sell his tricked-out Tribeca pad.

Alan Wilzig, a semi-professional racecar driver and entrepreneur, first listed his 6,500-square foot condominium at 7 Hubert Street for $43.5 million in October 2014, The Real Deal reported. Wilzig, who is depicted in the 2013 movie as introducing Leonardo DiCaprio’s character to his future wife, was selling the three-level pad — complete, at the time, with a neon-lit fish tank couch — sans broker.

The three-bedroom, 4.5 bathrooms maisonette is now asking $24.9 million or $3,828 per square foot, Curbed reported. Wilzig also hired Nest Seekers’ Ryan Serhant and Katherine Salyi for the listing, according to Curbed.

The pad also boasts a private garage, and 3,000 square feet of outdoor space. Also, the master bedroom can also serve as a safe room complete with Kevlar, steel-enforced drywall and a nearly 1,500 pound door with six deadbolts, according to the listing.

Wilzig, who formerly ran his father’s New Jersey-based bank that was bought out in 2004, bought the maisonette at the 33-unit, 16-story building, called the Hubert, for $4.5 million in 2005. [Curbed] — Dusica Sue Malesevic

Source: A real-life “Wolf of Wall Street” chops price on Tribeca pad by nearly M

Stonehedge Partners is looking to sell a Midtown rental building it developed in 1989.

Ofer Yardeni’s firm is marketing The Ritz Plaza at 235 West 48th Street

The 479-unit, 475,200-square-foot building features amenities including an indoor pool, a lounge, a fitness center and a rooftop deck. The property is home to La Masseria, an Italian restaurant.

The US General Services Administration also leases 20,000 square feet of office space there, the New York Post reported.

Studios at the building go for around $3,050 per month for a studio and $5,995 per month for a two-bedroom.

The property is among Stonehedge’s most recently built. The firm moved its own offices out of the building in 2008, relocating to 888 Seventh Avenue. The company refinanced the Ritz Plaza via a $150 million loan back in 2011.

Douglas Harmon and Adam Spies of Eastdil Secured are marketing the property. [NYP, second item] – Ariel Stulberg

Source: Ofer Yardeni’s Stonehenge marketing Ritz Plaza rental tower

The Rockpoint Group is making a big bet on Downtown residential.

The real estate-focused private equity firm agreed to buy two connected rental buildings at 63 and 67 Wall Street from DTH Capital and Metro Loft Management for $430 million, or about $545,000 per unit, the New York Post reported.

The two buildings compromise an entire block and total 810 apartments.

The 476-unit, 400,000-square-foot 63 Wall Street, known as the Crest and formerly as the Wall and Hanover Building, was built in 1929 and once housed the headquarters of private bank Brown Brothers Harriman. Metro Loft, which is behind the conversion of 20 Broad Street, converted it to apartments in 2003 and 2004.

The adjacent 67 Wall Street has 317 units within 303,000 square feet of space. It was built in 1921 for Munson Shipping Company.

The properties have 10,000 square feet feet of connected amenity spaces, and about 20,000 square feet of retail, including locations occupied by La Maison du Chocolate and Tumi.

Eastdil Secured’s Doug Harmon and Adam Spies brokered the deal. [NYP] – Ariel Stulberg

Source: Rockpoint to buy adjacent Wall Street rental towers for 0M

Guess it was too heavy a lift?

Eric Schmidt, executive chairman at Alphabet – which encompasses Google and affiliated companies – is backing out of a plan to fund Peak Performance’s relocation to 25,000-square-foot space at Aby Rosen and Michael Fuchs’ 90 Fifth Avenue in Chelsea.

The gym – which Schmidt attends along with other Alphabet employees, as well as celebrities such as Claire Danes, Anne Hathaway and Jimmy Fallon – signed a lease with the landlords in 2014, but Schmidt wasn’t revealed as a backer at the time. Asking rent was in the $70s per square foot, the New York Post reported.

“Due to construction and other related issues, the project became no longer economically feasible.” a source familiar with the plans told the paper. “Eric wasn’t the sole investor in the project, but he was the primary investor.”

Peak Performance currently occupies 10,000 square feet at 54 West 21st Street in Flatiron.

RFR picked up a $20 million loan to renovate the 115,000-square-foot property back in 2014. The company had looked to sell the building, but chose not to after Forbes, a longtime tenant, defaulted on its debt payment. [NYP] – Ariel Stulberg

Source: Eric Schmidt won’t back gym at RFR’s 90 Fifth Avenue

The city’s appraisal of 45 Rivington Street seems to have steeply undervalued the property.

Officials priced the seven-story, 150,000-square-foot Rivington House on the Lower East Side at $65 million, or around $433 per square foot, far below its ultimate selling price, the Wall Street Journal reported.

City officials are under pressure from prosecutors and watchdogs at the local, state and national level over their decision to lift a deed restriction at the property last year in exchange for $16.15 million, paving the way for owner the Allure Group to sell it to Slate Property Group, Adam America Real Estate Group and China Vanke for $116 million shortly thereafter.

The developers plan to build a luxury condominium tower at the site. The city last week ordered that construction stop, calling it an illegal conversion.

Nursing home operator Allure purchased the property, which had been a nonprofit HIV/AIDS care facility, in early 2015 for $28 million.

Former city appraiser Robert Von Ancken of Landauer Valuation & Advisory said the city’s assessment was far below what he would have expected. Officials “really must have messed up,” he told the Journal. [WSJ] – Ariel Stulberg

Source: City appraised Rivington House at M before deed restriction change

Williamsburg artists living at the Embee Sunshade building are not singing in the rain — the tenants are raising money in an effort to pay for legal fees to fight off their eviction.

Owner Barnett Brickner is suing Daniel Fay and Melanie Paterson, married artists who run an arts organization Standard ToyKraft, and another tenant Jeremy Jacob Schlangen, claiming they are blocking the sale of the building at 722 Metropolitan Avenue.

In the lawsuit, the umbrella maker is seeking $25 million in damages, alleging that the property was in contract for that amount in late 2015 when the three tenants filed an application with the city’s Loft Board in order to establish the building as an Interim Multiple Dwelling. If the board granted them coverage from the city’s Loft Law, it would protect the artists’ rent-stabilized status and their tenancy, DNAinfo reported.

The artists told DNAinfo that they are raising the money for the estimated cost of $30,000 in legal fees to fight for their petition and eviction cases.

Brickner’s family has owned the building since 1940. Fay and Peterson’s company is “a 3,000 square foot art space dedicated to providing artists with low-cost studio and performance space,” according to a 2012 Indiegogo campaign website.

The contract had called for the building to be delivered empty and the couple’s lease that will expire this month was an exception, according to the lawsuit. [DNAinfo] — Dusica Sue Malesevic

Source: Artist-tenants at Williamsburg umbrella factory raise money to fight eviction

From the April issue: In February, more than 200 people packed into a ballroom inside the Roosevelt Hotel in Midtown Manhattan — all there to hear about the latest regulatory issues and new legislative proposals reshaping the EB-5 market.

But perhaps more telling than the day’s agenda was the event organizer: the California-based NES Financial. The financial services firm — one of the biggest, if not the biggest, player in EB-5 banking in the country — didn’t even exist until 2005. [more]

Source: EB-5 is a bonanza for banks

The price of a night at a New York City hotel is falling for the first time in years, and some hoteliers are pointing the finger at short-term rental services such as Airbnb. 

The average hotel room rate fell 1.7 percent, for $266, according to data from hospitality tracking firm STR. It’s the first time average hotel prices in the city have declined since 2009. Prices were also down in the first two months of 2016, hitting $186, a 5.9 percent decline from the previous winter, the New York Post reported.

At the same time, tourism – somewhat counterintuitively – is on the rise. A total of 59.7 million people visited the city last year, up 2.4 percent from 2014. The hotel occupancy rate hit 73.2 percent in the first two months of 2016, up from 72 percent the previous year.

Some hoteliers blamed Airbnb and other short-term rental services for the results.

“Demand for New York is not the issue,” hotelier Richard Born told the Post. “If Airbnb were to go away, room rates would go up by 15 percent.”

Back in February, The Real Deal reported on an STR report that found no smoking gun evidence to prove Airbnb and similar services were hurting the hotel industry’s revenues.

Born, who owns the Greenwich Hotel and the Pod Hotels, among others, didn’t see it that way.

“Anyone who says Airbnb is not affecting NYC hotels is an idiot or hired by Airbnb to say that,” he told the Post [NYP] – Ariel Stulberg

Source: NYC hotel room rates down in 2015

“The Great Gatsby of the art world,” Louise Blouin, is taking her Panama Papers outing in stride.

The magazine publisher and art collector – also known as “the Red Queen” for her penchant for wearing the color – is renting out her four-acre La Dune complex on Gin Lane in Southampton, asking $1 million for just August, the New York Post reported.

Blouin had originally planned to market the property, at 366 and 376 Gin Lane, for sale for $145 million. It includes two houses, two pools, a tennis court and 400 feet of beachfront.

Harald Grant of Sotheby’s International Realty has the listing. It

The Canadian Blouin was recently exposed in the Panama Papers as the owner of five anonymous shell companies based in the British Virgin Islands. The media mogul used them to flip luxury real estate, she told the Toronto Metro.

“It is like my art. It is a private hobby,” she told the paper. [NYP, TM] – Ariel Stulberg

Source: Art world maven offering one-month, M Hamptons rental

The luxury residential market in Manhattan tied for its best week of the year thus far with 28 contracts inked at $4 million or more, but still fell below the 32 contracts signed during the same period last year, according to Olshan Realty’s weekly luxury market report. It has yet to hit 30 contracts signed in a single week this year.

For the week of April 11-17, the total asking price increased to $237 million, with an average asking price of $8.5 million. The average number of days on the market was 280 days and the average discount was seven percent.

For the second time in three weeks, the No. 1 slot went to a unit at 432 Park Avenue. Apartment 66B, asking $32.5 million, has 4,019 square feet including three bedrooms and 4.5 bathrooms, with views of Central Park. The condominium unit features 12.5-foot ceilings and windows that measure 10 by 10 feet. Amenities at Macklowe Properties and CIM Group’s 106-unit tower on Billionaires’ Row include a fitness center, a 75-foot pool, private dining, parking, a garden, and a children’s playroom.

The No. 2 was apartment 2/3D at 740 Park Avenue, asking $22.5 million, reduced from $32.5 million it listed for in 2014, according to records. The Real Deal reported last week that Liz Swig finally sold the duplex, which has four bedrooms, 4.5 bathrooms and three maid’s rooms, at the white-glove co-op. [Olshan Realty] — Dusica Sue Malesevic

Source: 28 contracts inked for M and up: Olshan

From the April issue: If Donald Trump gets sworn into office next January, he will be able draw on all the oaths he’s ever given during nearly half a century of suing — and being sued.

Over the course of Trump’s campaign to win the White House, he has made repeated references to his use of the courts, having regularly litigated against partners, governments, tenants, rivals and others over his more than 40-year real estate career.

And his presidential campaign hasn’t slowed that litigious streak.

Since announcing his candidacy in June, Trump has sued a business partner, Univision, for $500 million. In addition, he threatened to sue a rival, presidential candidate Ted Cruz, for not being a natural-born U.S. citizen.

He’s even discussed lawsuits he’d like to bring in the future, pledging that as president he would “open up libel laws” so “we can sue [newspapers] and win money.”

But as one attorney who has closely followed Trump’s legal maneuvers said, it’s not just about winning and losing. “Sometimes you sue because you want to win, other times you sue for delay, and sometimes you just sue to bully or get leverage. A lot of his suits are in the latter two categories,” said the lawyer, who asked to remain anonymous.

With that in mind, The Real Deal took a deep dive into Trump’s litigation history, focusing mostly on Manhattan real estate.

We reviewed hundreds of cases filed in Manhattan courts between the early 1980s and last month that involved Trump or one of his business entities.

Using public court records, TRD identified more than 90 cases in which Trump (or one of his entities) sued in New York County State Supreme Court on a real estate-related matter and more than 250 cases in which he (or one of his entities) was the one being was sued. (We eliminated all trip-and-fall-type suits as well as routine tax assessment appeals.) We also dug through old news reports and sifted through federal cases involving Trump.

Although in Manhattan he appears to have been disproportionally on the receiving end of most lawsuits, over the last four decades Trump has pushed a number of high-stakes real estate cases through the highest courts in New York. In at least one case, the fight has gone all the way up to the U.S. Supreme Court.

“Like many savvy New York real estate players, Donald Trump most certainly uses litigation as a tool to get what he wants,” said attorney Ray Hannigan, who represented Trump during the mogul’s 2002 sale of his stake in the Empire State Building.

Whether those experiences in the halls of justice predict presidential behavior is up for debate, but in the courthouse at least, Trump has shown himself to be more than willing to press opponents for as long as his attorneys will go along for the ride. And while he’s adamantly claimed on the campaign trail that he does not settle suits, these cases show that he has indeed done so on multiple occasions.

The suits also offer a window into his temperament — beyond the campaign bluster — and into how he would conduct himself as the leader of the free world.

Below is the first web installment of a story that looks at decades of Trump’s legal battles and how he handled each one.

Trump v. Government
The ‘first’ 421a fight

Trump may be looking to run the government, but he’s also been one of its biggest gadflies. The GOP frontrunner has made a habit out of suing governments over the years. Experts say it’s hard to recall another presidential candidate who’s gone head to head with the government like Trump has, with the exception of the consumer rights advocate Ralph Nader. But Allan Lichtman, American University history professor and author of “The Keys to the White House,” noted that there is of course a “huge distinction” between the two men.

“Ralph Nader’s lawsuits are not for personal profit, they’re for the public interest,” he said.

Trump’s personal squabbles with the government, however, had far reaching public implications for the real estate community.

Trump’s fight with the city over 421a — a predecessor to the battle that’s making headlines today — is just one case in point.

It was that highly coveted developer tax cut that provoked Trump to sue Anthony Gliedman, the head of the NYC Department of Housing Preservation & Development, back in 1981 when Mayor Ed Koch was in City Hall.

Trump had been denied 421a tax relief to construct Trump Tower, a 58-story skyscraper built on the site of the Bonwit Teller building at 725 Fifth Avenue.
In those days, 421a did not require developers to include affordable housing, but it did require that prospective sites be “underutilized.”

When the city rejected Trump’s abatement, he took them to court. The city argued that the Bonwit Teller building did not meet the standard for “underutilized.” It also later contended that 421a was never meant to be tapped for luxury condos.

Lower courts twice ruled that Trump was due his 421a break. But when the Appellate Division of the Supreme Court sided with the city, Trump successfully took the case all the way to the New York Court of Appeals, the state’s highest court, where he won. The prize: a 10-year tax cut worth $50 million.

That wasn’t Trump’s only gain. He also hired Gliedman away from HPD to work for the Trump Organization.

When the battle was all over, Trump speculated that the Koch administration had been out to get him.

Attorney Jeffrey Golkin, a member of Trump’s legal team at the time, told TRD that the mogul was denied the tax break “because of who he was,” noting that the pressure on the government to avoid giving subsidies to billionaires was very real.

In the end, Trump’s win carried more weight than could be measured by the coins being returned to his pockets.

It firmly established that luxury real estate projects were eligible for 421a, something that’s held true for more than 30 years — as evidenced by the recent (and highly controversial) tax breaks that went to Extell Development’s One57 and other luxury towers.

“It absolutely had an impact [on policy],” Golkin said.

In 1985, partially in response to Trump’s victory, the New York Assembly introduced the first affordability requirements to 421a, requiring Manhattan developers between 14th and 96th streets to build affordable housing in return for the abatement — a requirement expanded in the following decades.

Sources say Trump’s litigious history could inform how he handles adversity in office.

“[H]e will be used to it and more likely to give the go-ahead to have a fight if he feels like it’s necessary,” said Stanley Renshon, a political science professor at City University of New York, who has written three books analyzing the psychology of American presidents.

Going after capital gains

Trump’s 421a fight was not his only one with the government.

Around the same time that he was fighting City Hall, he also went after Albany.

In 1983, then-Governor Mario Cuomo enacted a new 10 percent capital gains tax on real estate sales over $1 million. Not surprisingly, Trump was not a fan of the so-called “Cuomo tax,” which would have applied to sales at Trump Tower.

Instead of merely grumbling about it among friends, Trump teamed up with developer Richard Pellicane and took on the governor’s tax commissioner, Roderick Chu. The duo claimed that the tax not only violated the state Constitution but also the U.S. Constitution because it exempted small property owners — an unfair carve-out in Trump’s view.

Chu, who told TRD that he worked with Cuomo and legislators to craft the new law, said that he had made extensive efforts to solicit input from across the real estate world but that he never heard from Trump.

“I guess he felt the way to do that was to not work with us and just sue me in court and get the whole thing thrown out,” Chu said.

When the lower court ruled against Trump, he doubled down and took the case to the Court of Appeals — with the Real Estate Board of New York squarely behind him. But the Appellate court dealt him another blow, ruling that the tax was perfectly constitutional.

Trump and his attorneys then pushed the case all the way up to the U.S. Supreme Court, where justices saw no “substantial Federal question” worth addressing and tossed the case.

“We were confident of our position from the get-go,” recalled Bob Abrams, the New York State attorney general at the time, who urged the Supreme Court to reject Trump’s appeal. “The AG’s office successfully defended the legislature’s right to pass, and the governor’s power to sign into law, that tax.”

Chu, meanwhile, delighted in recounting the story.

“Now that’s he’s a candidate, I get to brag amongst my friends that Trump sued Chu all the way to the Supreme Court and Chu won,” he joked.

Even though Trump lost, he ended up winning in the court of electoral politics when New York descended into the 1990s recession.

In 1995, Cuomo, a Democrat, lost reelection to the Republican candidate, George Pataki. According to news reports, Cuomo cited the real estate tax as one possible reason for his defeat.

Blasting the Bloomberg administration

A few years later, in 2002, Trump again took on the government.

Amidst a tax assessment scandal in Michael Bloomberg’s administration in which 18 city property assessors were indicted in a multi-million dollar scheme to shave taxes for select landlords, Trump sued the city for $500 million. He argued that the corrupt practices had cost him in lost sales opportunities at his Trump World Tower condo development near the United Nations, necessitating lower-than-planned prices because taxes were too high.

He even threatened to sue the landlords that had benefitted from the allegedly inaccurate assessments — Leonard Litwin, Sheldon Solow and the Resnick family among them. But this time REBNY was considerably less charmed.

“These charges are outrageous and unfounded,” said REBNY’s then-president Steven Spinola.

Trump’s case went down at the Appellate level, but he got himself a settlement: The city agreed to cut 17 percent from Trump’s tax assessment at Trump World, as well as award the building a 421a abatement. In return, Trump agreed to subsidize 200 affordable housing units in the Bronx that another company, the Atlantic Development Group, was partnering with the city on.

“The lawsuit saved us approximately $97 million,” Trump wrote his 2004 book “How to Get Rich.” “We never would have gotten any of it if we hadn’t taken dramatic action.”

Trump’s entanglements with government entities are not limited to American shores.

In 2011, he sued the Scottish government for showing bias when it allowed a wind farm to be created along the coastline in view of Trump’s Aberdeenshire golf resort. He lost that one in 2015.

While Trump has licensing agreements worldwide — in countries like India, the Philippines and Uruguay — he does not appear to have sued any other foreign governments. Still, he may have to smooth over diplomatic relations with Scotland if elected.

Kyna Doles contributed research to this story.

Source: What Trump’s lawsuits say about how he’d govern: Trump v. Government

Revelations about the political wheelings and dealings of JSR Capital’s Jona Rechnitz, under federal investigation for corruption, continue.

The real estate investor and Africa Israel alumnus reportedly leveraged his political connections to ensure $655,000 in funding over two years for a New York City Police Department training seminar at the Simon Wiesenthal Center’s Museum of Tolerance.

The JSR boss, who worked with the museum since 2012, organized tours for top cops and worked with its rabbi, Steven Burg, and an affiliated lobbyist Michael Cohen – who has since become the museum’s director – to push for funding with the City Council, the New York Post reported, citing a source familiar with Rechnitz’s alleged dealings.

Rechnitz also allegedly gave gifts to and paid travel expenses for NYPD officials, including private jet flights with, at least on one occasion, a prostitute dressed as a flight attendants, the Post reported.

The real estate industry player, a major contributor to Mayor Bill de Blasio, is under investigation by U.S. Attorney Preet Bharara as part of a larger probe into the mayor’s campaign financing. [NYP] – Ariel Stulberg

Source: Rechnitz funnelled 5K in city money to Wiesenthal Center program: report

Extell Development all but wrote the narrative for Billionaires’ Row when it launched One57 in 2011. Now, as the luxury market slows, brokers say the developer is having a second act by repositioning 38 high-end rentals at the soaring tower as condominiums with mid-market pricing.

The developer said last week it would sell 38 units on floors 32 through 38 as condos starting at $3.45 million, Bloomberg reported. Seven units will ask $10 million or higher.

“The $3 million to $10 million market is a good market to be in. That’s a range that’s transacting now,” said CORE’s Emily Beare, noting that sales above $10 million have been sluggish. “There are many more buyers out there that have the money to spend [compared with] $10 million and above.”

A $3 million pad at One57 – where a penthouse sold for more than $100 million in 2014 – may seem like a bargain to some buyers.

At One57, the average sale price is $6,521 per square foot, according to StreetEasy. While Extell did not disclose prices for all 38 units, it’s possible that a 1,021-square-foot one-bedroom unit, previously asking $13,350 a month as a rental, could fetch $3.45 million, or $3,379 a foot.

“It sounds ‘cheap’ on a relative basis,” said Warburg Realty’s Jason Haber. “These are non-intimidating numbers.”

By pricing condos between $3 million and $10 million, Haber said Extell will appeal to a wide swath of the market. “On the island we live on, those numbers aren’t crazy.”

Mid-level competition?

Although One57’s new batch of condos won’t flood the new development market, Extell may face competition from developers targeting an increasingly popular price point.

There are just over 1,000 new condos for sale asking between $3 million and $10 million, according to StreetEasy. The average new development price was $3.9 million during the first quarter, up nearly 30 percent year-over-year, according to real estate appraisal firm Miller Samuel.

Miller Samuel data show the absorption rate for new condo units was 3.6 months during the first quarter, down a staggering 71.4 percent year-over-year from 12.6 months.

“The strength in the new development space has been on the lower end of the price spectrum,” said Jonathan Miller, of Miller Samuel. “High price points are saturated with supply. So you’re seeing a lot of [developers] re-think what can be absorbed. Right now, the $1 million to $5 million price range is what most developers are focused on.”

According to a recent analysis by The Real Deal, developers are lowering total price expectations for many condo projects.

The combined sellout of Manhattan condos approved during the first quarter was $2.8 billion, a 44 percent drop from the $5 billion worth of new condo inventory approved a year earlier, TRD found. Meanwhile, the number of units being added to the sales pipeline was 839, a 3.5 percent drop from a year earlier.

However, One57’s mid-market units are likely to stand out in a crowded field, according to Warburg’s Haber. He pointed out that they’d fill a unique niche on Billionaires’ Row, where there are few one-bedrooms in development. “They’re probably saying, let’s go where the velocity is,” he said. “The super high-end of the market – let’s call it $10 million and up – it’s very, very slow. Everyone knows.”

Softening of luxury rentals

Given the slowdown in high-end rentals, Extell’s decision is clearly a “reality check,” said Olshan Realty’s Donna Olshan. (The rentals were priced between $13,350 a month for a one-bedroom and $50,336 for a three-bedroom.)

Miller said that the softening market for luxury rentals is – ironically – driven by closings in the luxury condo market. “Whenever you hear the word investor on the purchase side, that’s a rental. They won’t leave it empty,” he said. That includes One57, where buyers have listed units as rentals after closing.

Luxury rentals are also feeling a pinch from the global economy, according to Citi Habitats’ Gary Malin, who said he had no firsthand knowledge of Extell’s decision. But, he said, “The economy isn’t roaring and people are being more deliberate in approach. The high-end will feel that pain first.”

Given that units were not renting, Extell may have figured it may as well clear the units off the books by selling, Haber surmised: “They probably figure there’s a good amount of rental product out there, as well.”

Source: After rental reality check, Extell targets mid-market luxury at One57

From Luxury Listings NYC: British insurance mogul Peter Wood – founder of Direct Line and Esure – has purchased the Kluge Estate in Palm Beach, Florida, from Columbia University for a cool $39 million. The impressive compound is a combination of four separate properties. [more]

Source: This ocean estate in Palm Beach has finally sold for M

When the former president of Move Inc., Errol Samuelson, left for the rival real estate database Zillow in 2014, it erupted into a $2 billion trade-theft case. Move accused Samuelson of breach of contract, fiduciary duty and misappropriation of trade secrets. And this week in court, he claimed a health condition led to his destroying evidence from work computers.

Samuelson and another executive are accused of deleting e-mails, smashing a hard drive and wiping computers clean, according to the New York Post. But in a court hearing this week, Samuelson claimed that he deleted documents because he could be at risk of developing a rare and terminal hereditary health condition and that he did not want his medical history revealed.

Samuelson told the court that his work computer also held other personal health and financial information that he wished to keep private.

Move and the National Association of Realtors originally filed the lawsuit in Washington state court in March 2014, alleging that Samuelson and another former executive, Curt Beardsley, conspired to steal trade secrets from the company before decamping to Zillow. But Samuelson and Beardsley left for Zillow within 12 days of each other.

Beardsley testified that he destroyed a hard drive once connected to Move’s internal network by smashing it against a wall in moment of frustration.

Move says that Samuelson destroyed evidence that is crucial to its case and wants Zillow sanctioned. The hearing in the suit will resume on April 25. [NYP] –Christopher Cameron

Source: Zillow exec allegedly destroyed evidence due to health condition

From Luxury Listings NYC: Katy Perry may be able to proceed with her purchase of a former Catholic convent in Los Feliz, California, after a Los Angeles Judge ruled that attempts by the convent’s nuns to sell to a developer were out of line. [more]

Source: Katy Perry wins case against nuns to buy .5M convent

Most castles in the U.S. are completely cheesy, to put it mildly. There’s always something vaguely Disneyland about them. However, this French Normandy-style estate built in 1923 on the shores of Lake Erie really delivers.

The James Hamilton-designed home boasts nine bedrooms and 10 bathrooms spread out over 9,627 square feet. Inside, there are some rather bland modern updates, most obviously in the kitchen and in the bathroom where there is a TV installed over the bathtub.

Outside, there is another pool, lake frontage and three acres of land. It’s located at 13303 Lake Shore Boulevard, Bratenahl, Ohio.

[Curbed] –Christopher Cameron

Source: Calling all Francophiles: lakeside French Normandy estate asks .8M

“Avatar” actress Zoe Saldana is moving on up, and leaving her modest Kew Gardens two-bedroom co-op in her dust.

Saldana, who grew up in Queens, purchased the apartment at 118-18 Union Turnpike back in 2003. She has now sold it for just $280,000, according to the New York Post.

The apartment in the 20-story building that dates to 1974 had been on the market for $290,000.

The building has a doorman and is close to the subway, but those are really the only perks.

Saldana lives in Los Angeles with her husband and children. [NYP] –Christopher Cameron

Source: Actress Zoe Saldana sells modest Queens starter home

The West Coast finally has its own supertall. The under-construction Wilshire Grand Center in Downtown Los Angeles will top off at 1,100 feet. That cements its place as the tallest building west of the Mississippi.

For comparison, New York City’s One World Trade Center comes in at a memorable 1,776 feet. Of course, neither of these are a match for Dubai’s Burj Khalifa tower, which rises 163 stories to 2,722 feet — and cost $1.5 billion to build.

The Wilshire Grand Center is reportedly costing an estimated $1.2 billion.

Set to open in early 2017, the Wilshire Grand Center, which is backed by Korean Air, will be home to a 900-room luxury hotel managed by the InterContinental Hotels Group. It will also offer 18 floors of office space and over 45,000 square feet of restaurant space. The names of the retail tenants have not yet been released.

The finishing touch will be a “sky lobby”, which will include an infinity pool and some definitively breathtaking views of Downtown LA.

The Wilshire Grand Center will only have a short while to enjoy its claim to fame, though: Seattle’s 4/C tower is scheduled to overtake it by a mere 11 feet in 2018, according to the Los Angeles Times.

The building was designed by AC Martin. See below for renderings of the completed tower.

 

Located in Downtown Los Angeles’ Financial District, the Wilshire Grand Center will be a new center point of the skyline, as this early rendering shows.

This rendering illustrates the expected nighttime look of the tower, with a brightly-lit “sail” at its peak.

Here’s that distinctive “sail” design. The curved top is definitely a departure from the style of any other Los Angeles skyscrapers, which tend to be more traditional in appearance.

The glass-encased tower will have a clean, reflective finish. Thirty-five elevators will take visitors to their destination floors.

The area at its base will include green space and a pedestrian plaza.

The Wilshire Grand Center will be the first new tower-based office space built in Los Angeles in the last 20 years, according to the New York Times.

To speed up construction, the tower is making use of innovative “plug and play” bathroom pods. 698 of the pre-assembled “pods” are being installed throughout.

Currently under construction, the top portion is yet to be clad in its glass casing.

A construction worker stands on one of the upper levels. The tower overlooks the whole of the city and surrounding mountains.

At the topping-out ceremony last month, the Korean-Air-backed project officially reached the 1,100-foot mark. Even if the Seattle tower claims the West Coast title, the Wilshire Grand Center will still be the tallest in California.

Here’s a rendering of a rooftop dining lounge, with the nearby mountains visible through the glass.

This projected interior look showcases the tower’s streamlined, contemporary style, taking advantage of the California light. Most rooms will have floor-to-ceiling glass windows.

 

Another exterior rendering.

The sky deck will be home to an infinity pool, a chic bar, and unrivaled views.

 

Source: This stunning 1,100-foot skyscraper will be the tallest building on the West Coast

From Luxury Listings NYC: Luxury homeowners tend to care more about their own comfort and living desires, and not what future buyers may want when renovating, according a new study. Middle-class homeowners, on the other hand, tend to renovate based on materials and finishes that will increase their property’s overall value. And that’s not all. [more]

Source: The rich renovate their homes differently: Study

Stephen Ross’ Related Companies sealed a $150 million refinancing of its 52-story rental building Tribeca Tower.

Last month, Wells Fargo provided a new $52.5 million gap mortgage on the property at 105 Duane Street, according to city property records filed Friday.

That loan is being consolidated with $97.5 million in existing debt on the building, according to mortgage documents, including a $55 million loan from the city’s Housing Development Corporation and a $42.5 million mortgage from lender American Property Financing (now part of Wells Fargo).

Neither Related nor Wells Fargo could be immediately reached for comment.

The Columbus Circle-based development firm acquired the 440-unit Tribeca Tower in 1993 from the Long Island-based DeMatteis Organizations, which built the residential tower in the early 1990s.

Related, led by CEO Jeff Blau, is seeking a nearly $700 million sellout of its nearby 47-unit condominium project at 70 Vestry Street in Tribeca, The Real Deal reported last month.

Source: Related secures 0M refi of Tribeca Tower

The future of the “home sharing” on sites such as Airbnb might end up involving a lot of shrewd capitalism as amateur, part-time “hosts” are gradually displaced by hotel-like investors and operators.

That’s the picture that emerged at a panel featuring executives from onefinestay, rented.com, tripping.com and Oasis Collection, who spoke of the rapid expansion of short term rental investment nationally and globally. The insiders drew comparisons between sites such as Airbnb and the likes of eBay and StubHub, which, over time, became dominated by organized, commercial players.

“eBay started out as soccer moms selling things to other soccer moms,” said Andrew McConnell, founder and CEO of rented.com, a service that connects homeowners with property managers, at the Serviced Apartments Summit Americas Thursday. “Today, 80 percent of eBay people are ‘power sellers.’”

Tripping.com founder and CEO Jen O’Neal made roughly the same point about online ticket marketplace StubHub, where she headed up marketing for five years.

“Real estate investors are asking us where to buy buildings,” O’Neal said. “They’re aiming for cap rates as high as 18-20 percent”

A spokesperson for Airbnb declined to address the predictions directly, but reiterated the company’s oft-stated opposition to such practices.

“Airbnb is a people-to-people platform that connects local hosts with visitors from around the world who are looking to see the city from a New Yorker’s perspective,” the spokesperson said. “We oppose illegal hotels; they’re bad for our community and do not offer our guests the authentic experience they seek.”

About 2,500 of Airbnb’s whole-unit listings in New York City were rented for 180 days or more between November 2014 and November 2015, according to data the company released in December.

The panelists on Thursday also predicted a future where major travel and hospitality companies – including hotel chains and travel and hotel booking websites – became major players in operating and marketing short-term rentals.

Evan Frank, co-founder of onefinestay – which was bought by Paris-based AccorHotels for $169 million earlier this month – predicted sites such as Expedia.com will soon feature “home” panels on their homepages to market apartments in residential buildings.

The panelists acknowledged, however, that in some cities – New York for example – the transition would require major regulatory changes.

“New York is one of the cities where the most catch-up is required,” said Frank. His firm, he said, is committed to helping the process along. “I spend 25 percent of my time with city and state governments.”

McConnell agreed, saying that “educating” stakeholders such as governments and landlords was vital for the industry. “They have people whispering in their ear,” he said. “You can’t just sit back and wait for the right answer to appear.”

While O’Neal predicted short-term rentals would be entirely legalized in the U.S. within 10 to 15 years, Parker Stanberry, founder and CEO of vacation rental firm Oasis Collections, which is also partly owned by AccorHotels, said easing restrictions was good enough.

“We’re for sensible regulation,” he said. “We’d be OK with requiring a minimum stay of five days, as they’ve done in Madrid, though we’d maybe prefer three or four days.”

All the panelists said they favored taxing short-term rentals like hotels.

“Short term rental, extended stay, hotels… I think they’re false constructs,” said McConnell. “It’s all accommodation.”

He and Stanberry both acknowledged that short-term rentals do likely remove rental units from the market, as critics have charged, but argued short-term rentals only deserve a small part of the blame for affordability problems in cities such as New York and San Francisco.

Still, the people may already have spoken.

“Airbnb is like Napster,” McConnell said. “Now that the world has tasted Airbnb, it doesn’t matter what the regulators do.”

Source: Commercial operators are the future of short-term rentals: insiders

Steven Roth might be tight-lipped about Vornado Realty Trust’s plans for its 220 Central Park South luxury condominium development, but that hasn’t stopped a fresh crop of renderings of the project from emerging.

The new depictions of the Robert A.M. Stern-designed building show the 950-foot-tall, 118-unit condo tower and its adjacent 13-unit sister building, the Villas, in greater detail and clarity.

While the renderings arrive via Vornado’s website, representatives for the project declined to confirm whether they represent the final product, according to Curbed.

Vornado CEO Roth declined to give away too much about 220 Central Park South on the real estate investment trust’s most recent quarterly earnings call in February, swatting away inquiries on the number of units sold.

While Vornado had indicated on earlier calls that the building was more than 50 percent sold, Roth said such updates hurt the company “competitively in the market.” He acknowledged a slowdown in the Manhattan luxury condo market, however.

“It’s slowing for everybody,” he said. “It’s slowing a little bit less for us, but of course it’s slowing for us as well.” [Curbed] – Rey Mashayekhi

Source: New renderings of Vornado’s 220 CPS unveiled

Two City Council committees gave the green light for the controversial rezoning of East New York, which is part of Mayor Bill de Blasio’s larger affordable housing plan.

The full body is expected to vote on the plan, which would rezone around 190 blocks in the Brooklyn neighborhood and nearby areas, next week.

If the council approves the plan, East New York will be the first of 15 neighborhoods that will be rezoned. It is expected to create more than 6,000 new apartments and 1.3 million square feet of retail, office space and community facilities in East New York, Cypress Hills and Ocean Hill.

“Is it a perfect plan? No. But it is the best plan I was able to craft, a plan crafted for our community that will ensure East New York, Cypress Hills and Ocean Hill are in the best position to fight the wave of market pressures and gentrification crashing over Brooklyn,” Council member Rafael Espinal Jr. said in a statement, Crain’s reported.

The rezoning is not without its critics. New York Communities for Change called for lower income thresholds for the affordable housing, citing that more than a third of East New York residents make below $23,000 yearly. Espinal has been the target of protesters who demanded last week he return donations from real estate interests.

Crain’s reported that many of the East New York developments will receive city subsidies and have more affordable units. The neighborhood rezoning is tied to a new school, tenant protections and $500 million in capital projects, according to Crain’s. [Crain’s] — Dusica Sue Malesevic

Source: Two City Council committees approve East New York rezoning

From the April issue: In 1969, the Jehovah’s Witnesses made their presence in Brooklyn Heights known with 10 blazing red letters: WATCHTOWER. After buying a massive pharmaceutical manufacturing plant for $3 million, the Witnesses installed the electric sign atop the roof. It quickly became a landmark — visible from the Brooklyn Bridge and from across the river in Manhattan. “The public now knows that this group of buildings belongs to the Watchtower Society,” wrote the Witnesses’ then-president Nathan Knorr, referencing the group’s official name. Now the Witnesses are shopping around that iconic asset — which sits at 25-30 Columbia Heights and serves as their international headquarters — along with two other buildings. [more]

Source: By the numbers: The Jehovah’s Witnesses’ Brooklyn holdings

An eight-building portfolio in Brooklyn is hitting the market for $52.5 million.

The rental properties are located in several neighborhoods throughout the borough and include 773 Carroll Street in Park Slope. The three-story, 4,300-square-foot building has eight units, according to PropertyShark. Also for sale is the five-story, 10-unit building at 68 Middagh Street in Brooklyn Heights, which spans 9,160 square feet.

Other multi-family properties are located in Carroll Gardens, Clinton Hill, Boerum Hill, and Fort Greene, Crain’s reported. Altogether, the buildings have 68 unit and around half are rent regulated, according to Crain’s.

The seller is Jon Holman, a former attorney who started buying small multifamily properties in the borough in the 1980s. He said in an email to Crain’s that he plans to buy a single property from the proceeds from the sale.

TerraCRG’s Adam Hess is handling the sale.

In March 2015, Heller Realty purchased an 11-building Brooklyn portfolio, paying $206.5 million to Douglas Eisenberg’s A&E Real Estate. [Crain’s] — Dusica Sue Malesevic

Source: Eight-building Brooklyn portfolio asks M

Low fuel costs and a mild winter meant landlords’ costs actually fell over the last 12 months, for only the second time since 1969, at least according to the city’s Rent Guidelines Board.

The seemingly encouraging estimate, announced Thursday, could be a prelude to the board once again ordering landlords not to increase rent on stabilized tenants.

Building owners and their representatives are pushing back, saying costs are actually rising, and criticizing RGB’s methods, the Wall Street Journal reported.

The Rent Guidelines Board said its price index showed operating costs had fallen 1.2 percent since last year’s report, primarily because of an estimated 41 percent drop in heating costs.

That drop, the board said, counteracted a 7.5 percent rise in taxes on landlords over the same period, as well as a 3.2 percent increase in labor costs.

In these circumstances, RGB’s models call for a rent decrease of 0.8 percent or more for one-year stabilized leases.

Forest City Ratner’s Scott Walsh, representing building owners at the board’s meeting, said costs were actually up about 3.5 percent, the Journal reported.

“If costs went down 1.2 percent, it would have been in the conference calls,” he said, referring to the earnings calls of publicly-traded real estate firms focused on rentals.

Aspects of RGB’s estimation process are marred by data inconsistencies, the Journal reported. For example, income from commercial units and market-rate apartments is sometimes included with income from stabilized units. [WSJ] – Ariel Stulberg

Source: Cost to operate rentals fell in last 12 months: Rent Guidelines Board

Pistilli Realty Group picked up a pair of multifamily buildings in the Fordham Manor section of the Bronx, adding to a portfolio of properties purchased in recent months that now tallies over 300 units for $55 million.

The Astoria-based landlord – which owns some 4,500 units in the five boroughs, Westchester and Long Island – closed on the purchase of 2695 Briggs Avenue and 2710 Valentine Avenue last week for $14 million.

The pair of six-story elevator buildings, which sit back-to-back on the block not far from the Kingsbridge Road B and D-train subway station, hold a combined 84 rental units spanning some 97,000 square feet.

Pistilli, a family firm run by brothers Joe and Tony Pistilli, purchased a five-building portfolio of properties in November spread across the borough from Prana Investments for $41 million.

The five properties – 535 East Tremont Avenue, 355 East 187th Street, 1770 East 172nd Street, 2865-73 Webster Avenue and 65-67 East 175th Street – combine for 321 apartments and more than 243,000 square feet. Pistilli Realty plans a long-term hold on its Bronx portfolio.

Mike Pistilli, the company vice president, said there’s a lot of potential upside in the buildings, where rents can be raised from about $1,100 to $1,400 per month.

“The previous owners didn’t really care too much about maximizing the bottom line,” he said. “There’s a lot of juice in these deals.”

Luca Capin of Capin & Associates represented the sellers in both transactions, and Pistilli negotiated directly with the broker.

Pistilli also plans to develop a mixed-use medical-office and apartment building with 24 residential units in the Kingsbridge Terrace section at 2661 Kingsbridge Terrace.

In December, Related Companies spent $112.5 million to purchase a 20-building, 737-unit Bronx portfolio, the largest portfolio deal of 2015.

For its November cover story, The Real Deal broke down the rising market in the Bronx.

Source: Pistilli Realty stitches together M Bronx portfolio

Helena Cawley isn’t sweating the more than $5 million she and her husband paid for a maisonette at 449 Washington Street.

Cawley is the co-founder of women’s fitness studio called Uplift and the founder of Sweatstyle, a subscription service for activewear — the fashion a la mode that even Beyoncé is getting into the act with a line.

Cawley and her husband Sean Cawley bought the three-bedroom, 3.5 bathroom condominium at the four-unit Tribeca building, where Academy-Award winning director Kathryn Bigelow also has a pad, the New York Post reported.

The 3,240 unit boasts 13-foot ceilings, custom closets, a skylight, a 150-bottle wine refrigerator and an “eco friendly ethanol fireplace,” the tabloid reported. It was listed in spring of 2015 for $6 million.

Corcoran Group’s Monica Novo, Daren Herzberg and Brian Babst had the listing.

A fourth-floor, 1,700-square-foot unit at the building, developed by DI Development, is on the market for $3.2 million. [NYP] — Dusica Sue Malesevic 

Source: Sweatstyle founder picks up Tribeca condo for M

A notorious Brighton Beach landlord, who was investigated for conditions at his cramped flophouses known as three-quarter homes, was arrested Wednesday for allegedly receiving $2 million in Medicaid kickbacks.

Yury Baumblit and his wife, Rimma, were arraigned in Kings County Criminal Court on felony charges of second-degree grand larceny and second-degree money laundering.

Baumblit is accused of forcing tenants at his three-quarter homes to go to certain substance-abuse treatment providers, the New York Times reported. The providers, in turn, paid $2 million in Medicaid kickbacks to companies run by the Baumblits, an assistant attorney general, Megan Friedland, said at court on Wednesday.

The Baumblits’ five-bedroom, 5,200-square-foot home in Brighton Beach features chandeliers, a bar and a swimming pool, and the couple owned expensive furs and jewelry, Friedland said, the Times reported.

“There’s an ostentatious lifestyle that’s being paid for by the state, in essence,” Friedland said.

A lawyer for the Baumblits said his clients were the victims of a “witch hunt,” and “adamantly denies there have been kickbacks,” the newspaper reported.

So-called three-quarter homes are unregulated, which has led to crowded quarters often overrun with vermin. Poor people in need of treatment for substance abuse, the mentally ill, and homeless who did not want to use the city’s shelters use these homes.

The Baumblits have run many of these home since 2009 and last year faced criminal charges for illegally evicting tenants and were the focus of a Times’ investigation.

If convicted, the couple could face up to 15 years in prison. [NYT] — Dusica Sue Malesevic

Source: Flophouse landlord arrested for allegedly taking M in Medicaid kickbacks

From the April issue: Last July, a swarm of high-profile guests — including Revlon Chairman Ron Perelman and former Secretary of State Henry Kissinger — gathered to celebrate the launch of a summer tour to China by the National Youth Orchestra of the U.S.

Among the high-powered attendees who were invited by China’s New York Consulate General Zhang Qiyue was Linda Mei He. Dressed in a nearly floor-length black gown, Mei He, who along with Carnegie Hall was a major sponsor of the tour, later issued a news release raving about the young musicians and the importance of promoting cultural exchanges between the U.S. and China. [more]

Source: EB-5’s gatekeepers: Migration agents

The Jehovah’s Witnesses’ exodus from Brooklyn continues.

The organization is listing yet another another property, the 161-unit, 154,000-square-foot rental building at 107 Columbia Heights in Brooklyn Heights, the Commercial Observer reported.

The structure, built in 1959 and renovated in 2007, could sell for as much as $1,000 per square foot, the Downtown Brooklyn Partnership’s Tucker Reed told the publication, which would mean a selling price of around $154 million.

Earlier this week, Jared Kushner’s Kushner Companies, Aby Rosen’s RFR Realty and LIVWRK agreed to pay over $700 million for the Witnesses’ 733,000-square-foot global headquarters at 25-30 Columbia Heights in Downtown Brooklyn and a 135,000-square-foot development site at 85 Jay Street in Dumbo.

The Witnesses are leaving their longtime home in Brooklyn for a new headquarters in Warwick, NY. The group owns a few more properties that haven’t yet hit the market: 97 Columbia Heights, 119 Columbia Heights and 1 York Street, according to the Brooklyn Daily Eagle. [CO] – Ariel Stulberg

Source: Jehovah’s Witnesses not done yet, list another BK property

Paul Boardman’s P2B Ventures and Steven Pozycki’s SJP Properties will proceed with their plan to build luxury condominiums that will float just above an Upper West rent-regulated multifamily building, despite some tenants’ opposition.

The Department of Building approved the plan for 711 West End Avenue, and construction on the project will begin around the end of the school year, the Wall Street Journal reported.

The developers are planning 64 condos at the new building, which will be supported by 17 steel columns, sharing only an elevator bank, two staircases and utility lines with the building below.

Boardman and Pozycki partnered with that building’s owner, the Miller family, exchanging equity in the new project for the Millers’ air rights at the address.

The Millers plan to exchange their equity for units at the new property, which they will then rent out, the Times reported.

The project faces stiff opposition from many of the existing tenants and local officials such as City Council member Helen Rosenthal, who argued construction would endanger residents. [WSJ] – Ariel Stulberg

Source: DOB approves Boardman’s UWS stacked condo project