Author: admin

Ian Bruce Eichner wasn’t able to secure financing for his 1800 Park Avenue rental project, and now the Durst Organization is looking to foreclose.

The Durst Organization, which previously brought Eichner’s debt from the Garrison Investment Group, expects to take control of the property later this month, the Wall Street Journal reported.

Eichner’s Continuum Co. bought the East Harlem site back in 2013 from Vornado Realty Trust, paying $66 million. The developer had planned to build a 680-unit rental building on the site, but was reported as having put it on the block last year.

“The notes are in maturity default and as lender, we intend to pursue our rights and remedies,” Jordan Barowitz, a spokesperson for the Durst Organization, told the Journal.

A spokesperson for Eichner declined to comment on the specific property, the Journal reported, but lamented the general state of the lending environment. “The capital markets are upside down and the timing is very unfortunate,” he told the paper.

The Real Deal reported earlier this week that lender Gamma Real Estate is seeking to foreclose on the Bauhouse Group’s condo project 3 Sutton Place.  [WSJ] – Ariel Stulberg

Source: Durst Organization moves to foreclose on Eichner’s East Harlem site

Following a rush in issued construction permits that qualified for the now-dead 421a tax break, only 453 units of housing were approved for construction in New York City by the Department of Buildings last month, according to The Real Deal’s analysis of publicly available data.

The January number is so paltry that it’s lower than the monthly average during the weakest year for permits during the financial crisis — in 2009, the average number of units approved per month would have been about 500, according to the annual Rent Guidelines Board housing supply report.

In January, there were just 87 non-hotel residential projects permitted citywide, with an average project size of just five units. According to the data, 69 of the 87 projects consisted of three or fewer units. Only eight of the approved projects had 10 or more proposed apartments, and just one had more than 100 apartments. That project was Monadnock Construction’s 530 Exterior Street in the Bronx, and it will not qualify for the expired 421a developer tax break. Staten Island had the most issued construction permits, largely for one and two-family homes. In Manhattan, just two permits were issued in January, for 25 total units of housing, and those projects won’t qualify either for 421a either.

421a, a tax incentive first passed by the New York State Assembly in the 1970s, provided developers with significant tax breaks to construct new residential buildings, often without providing any affordable housing. The tax break program was officially suspended when the Real Estate Board of New York and the Building and Construction Trades Council of Greater New York failed to agree on prevailing wage provisions required for its extension in January.

According to numbers from the US Census Bureau cited by the Wall Street Journal, there were 7,781 units in 299 building projects approved before the expiration of 421a on December 31, meaning that the number of approved units dropped more than 94 percent in January. By comparison, January of 2015 saw more than 1,500 units approved, far above the 453 units this year.

Issued Construction Permits, January 2016
	Total new building projects	Total residential projects	Total residential units
Manhattan	5	2	25
Brooklyn	22	15	72
Bronx	14	12	247
Queens	32	20	49
Staten Island	48	38	60
TOTAL	121	87	453
Source: TRData analysis of DOB data for intitial new building permits. Does not count reissued permits or conversions. Residential projects and units do not include hotels.

With two major 421a expiration deadlines recently passed (in June and December), the Department of Buildings has churned out an unusually large number of building permits during the weeks and months directly preceding those deadlines.

During May and June of 2015, more than 26,000 total units of residential housing were included in issued construction permits, presumably so that as many projects as possible could qualify for tax breaks then set to expire on June 15, 2015. The first two weeks of June before the deadline saw more than 7,000 apartments approved for construction in Brooklyn alone, as TRD previously reported. The state-granted tax break was then extended for six months, and in December issued permits spiked once more, ahead of the foreboding last call for 421a on December 31, 2015.

But it wasn’t just the new construction permits issued by the DOB that fell in January. The total number of units included new applications, which reached its lowest tally in at least a year, according to another TRD analysis of DOB data. Figures show 847 non-hotel residential units in projects of at least 15,000 square feet were proposed in new buildings and major conversion applications in January, and only 70 of those apartments were planned for Manhattan.

When asked about the recent fall in permit activity, real estate attorney Alvin Shein said that without 421a, a drop off was to be expected, especially for rentals. “Developers aren’t going forward with plans until there’s some type of tax exemption to make rentals feasible,” he said.

Shein’s comment is reminiscent of what virtually every developer says when asked about 421a –– that without it, no one will build rental housing, because there’s no incentive to discourage building condos in a market where they’re selling at record prices.

“There’s no question the loss of 421a will have an impact on development markets,” said Benjamin Dulchin, the executive director of affordable housing advocacy coalition ANHD. But the impact 421a has had on “juicing” land prices in certain neighborhoods, he added, must be acknowledged too. “Over the long term,” Dulchin said, “it’s likely that land prices in some neighborhoods will fall in a way that makes rental housing possible without 421a.”

Source: Arrested Development: Residential construction permits dropped 94% in January

The RKO Keith’s Theater, a former Flushing vaudeville house and cinema, the site of several doomed redevelopments, is back up for sale by owner JK Equities.

“In the past six months, we have received several unsolicited offers to purchase the site at attractive pricing,” JK boss Jerry Karlik told Crain’s.

The three-story, 2,974-seat theater at 135-35 Northern Boulevard opened in 1928 and hosted performances by the likes of Judy Garland, Bob Hope, Jerry Lewis, Jack Benny and the Marx Brothers.

JK Equities bought the property, whose lobby and foyer are landmarked, in 2013 for $30 million from developer Patrick Thompson. Last year Karlik’s firm received permission to build a 16-story, 269-unit apartment building at the site.

Attempts to redevelop the theater date back to 1986 when Thomas Huang bought it with plans to build a hotel and retail site. He later pleaded guilty to two felonies related to demolishing landmarked portions of the building, and sold the property to Shaya Boymelgree in 2002 for $15 million. Boymelgreen defaulted on his mortgage before he was able to build a planned condo building, and sold out to Thompson for $20 million in 2010. [Crain’s] – Ariel Stulberg

Source: Long-vacant RKO Keith’s Theater on the block again

City officials are feuding over (the lack of) development at more than 1,000 vacant lots owned by the city.

The Department of Housing Preservation and Development has allowed as many as 1,131 properties lie idle, with some sites largely abandoned, and many others where projects have been severely delayed, according to an audit by the office of Comptroller Scott Stringer.

Officials at HPD strongly rebuked Stringer’s accusations of foot-dragging, citing the many difficulties in developing the lots, and suggesting the picture isn’t as grim as his audit claims, the New York Times reported.

About 310 of the properties in question are in flood zones, or came with similar complications, an HPD spokesperson told the Times. About 150 more were unsuitable for residential development, and would work better as parks or police stations. And, 400 of the remaining 670 properties were already scheduled for development within the next two years, HPD told the paper.

“The assertion that H.P.D. allows vacant city-owned properties to languish in the face of the affordable housing crisis is simply wrong,” HPD Commissioner Vicki Been said in a statement.

The properties in question are mostly concentrated in Brooklyn and Queens, and came into the city’s possession after the fiscal crisis in the 1970s. [NYT] – Ariel Stulberg

Source: 1,131 city-owned lots have languished for decades: Stringer

A problem shared is a problem halved? Not so in the high-stakes world of luxe condo development.

Vornado Realty Trust CEO Steven Roth refused to give investors in his company an up-to-date count on the number of apartments that have sold at 220 Central Park South, the trophy residential tower rising on Billionaires’ Row.

Asked by an analyst during the company’s fourth quarter earnings call to update the 53-54-percent sold figure Roth provided for the building at the end of the third quarter of 2015, he said he’d rather not, for “competitive reasons.”

“I don’t think it’s good for our business to give these kinds of minute details,” he said. “It doesn’t help us. It hurts us competitively in the market. The market is slowing. It’s slowing for everybody. It’s slowing a little bit less for us, but of course it’s slowing for us as well.”

One reassurance he did offer? “We’re not going backwards.”

He also reminded investors that Vornado has already sold enough of 220 CPS’ 118 units to cover its initial costs. The property is projected to cost a whopping $5,000 per square foot to build.

Roth, who last year touted the fact that the building had commitments for more than $1.1 billion in units in just six weeks, is just the latest developer to shy away from disclosing sales information.

Developers of two of the city’s other most audacious residential skyscrapers — 432 Park Avenue and One57 — similarly kept the curtains drawn by using their own in-house brokers and by keeping their listings out of the public eye, declining to list them on listing databases such as StreetEasy. Extell Development, the firm behind One57, hasn’t released an updated sales figure since 2013, when it declared the building 70 percent sold.

“The street is trying to ascertain how he’s doing,” Olshan Realty’s Donna Olshan said of Roth’s reticence. “Absent any data, they can’t make that determination. “The lack of transparency does not translate well. Consumers want to know where they stand. That’s the world we live in now.”

Roth did admit that the market has not been kind in recent months to the high-end residential sector in New York.

“The for-sale condo business has dramatically slowed at all price points and in all neighborhoods,” he said. “There seems to be a condo project on every block developed by undercapitalized, over-leveraged players.”

Source: Steve Roth won’t update the street on 220 CPS sales

A lawyer who specializes in getting tenants fat payouts from landlords just made his own big score.

David Rozenholc, regarded by some as the most feared tenant lawyer in the city, just sold his massive Upper East Side townhouse for $27 million, according to property records filed with the city Wednesday. The 13,000-square-foot Flemish brick mansion at 7 East 84th Street has eight bedrooms and 10.5 bathrooms, and boasts a butler’s pantry, wine cellar and private garage.

The Corcoran Group’s Carrie Chiang and Richard Phan had the listing, which was first listed with Douglas Elliman in 2013 for $30 million. It traded for about $2,075 per square foot to an unidentified Illinois-based investor who controls the entity LF Investments LLC. Rozenholc, who purchased the property in 1996, couldn’t immediately be reached for comment.

The veteran attorney has helped tenants secure massive payouts from developers such as Tishman Speyer, Starwood Capital Group and even Donald Trump. In 2014, he helped a pair of tenants receive $25 million from Tishman Speyer to vacate a small apartment at the developer’s Hudson Yards site, where it’s now planning a $3.2 billion office tower.

“I put myself in the position of the developer,” Rozenholc told Crain’s in October. “I find out what they paid for the property, what are they are going to build, what the construction will cost and how much the financing costs are. It takes two to tango, so you have to figure out exactly what it is worth to them.”

Source: Payout pro sees big payday: RE attorney David Rozenholc sells his UES townhouse for M

Details have emerged on hospitality magnate Sam Chang’s plans for a 20-story hotel in Midtown East.

The McSam Hotel Group boss is scheduled to close on 14 and 16 East 39th Street for $31.6 million. The vacant properties — acquired from Midtown-based ClearRock Properties and Stanford, Conn.-based Juster Properties — will be demolished to make way for a 20-story Hyatt Hotel.

The 12-story, 93,700-square-foot building 16 East 39th Street has 25 feet of frontage on East 39th Street, the New York Observer reported. The three-story, 7,400-square-foot commercial townhouse next door at 14 East 39th Street comes with 22,000 square feet of air rights.

In January, Chang filed permit applications for a 162-key hotel at the site, as The Real Deal reported.

The new hotel and full-service restaurant will span more 66,000 square feet and be designed by Gene Kaufman, according to the permit application filed with the city. The top floor will house a lounge area while the cellar would be used as a dining space and exercise room. The hotel is slated to be completed in three years, Chang told the Observer.

Cushman & Wakefield’s Robert Knakal is negotiating the new deal for both sides.

ClearRock and Juster Properties paid $29 million for the buildings in 2013, which were part of a portfolio of office properties Yeshiva University sold for $87 million.

Chang filed plans last year for two Garment District hotels — a 25-story, 175-key project at 338 West 39th Street and a 21-story, 400-key development at 350 West 39th Street — as well as a 13-story hotel at 111 East 24th Street in the Flatiron District. [NYO] — Dusica Sue Malesevic

Source: Sam Chang will pay M for pair of Midtown East buildings

From the February issue: For more than 50 years, the Gross and Grobman families witnessed the evolution of Clinton Hill from their Key Foods supermarket at 325 Lafayette Street. Since 1948, the families had climbed their way up in the grocery business, starting as local butchers and grocers in Brooklyn to owning a large, regional chain of markets.

But last year, in an attempt to capitalize on skyrocketing land values, the families joined forces with Brooklyn developer Slate Property Group. They are now co-developing an eight-story, 114-unit rental building at the site, which will house a supermarket on the ground floor. Both sides declined to disclose specifics, but said the $60 million deal is a win-win. [more]

Source: NYC’s new (and unlikely) developers

Critics said no one would pay a hefty premium to live like a hippie in an urban commune. It seems they were wrong. Having declared its Crown Heights experiment a success, co-living startup Common is now moving towards a new business model based on ground-up development, with plans to build a new 12-suite, 51-bedroom residential complex in South Williamsburg.

Paul Henry’s Patoma Partners – which bought the 248-254 South 3rd Street site in 2012 for $2.4 million – is developing the 20,000-square-foot facility.

It will consist of four five-story buildings with three fully-furnished apartment suites each, plus shared rooftop and outdoor areas, a lounge, a “wellness studio” and a film screening room.

The developer filed permit applications for the buildings at the site back in 2013. Those plans are current, a spokesperson for Common confirmed.

Much like its first project at 1162 Pacific Avenue, prices will range from about $1,800 to $2,650 a month for residents who sign a six- or 12-month lease, and a Midtown-ian $2,250 to $3,190 a month for month-to-month tenants. Those prices include furniture, utilities and amenities like wifi, laundry and cleaning services.

Tenants who pay the higher rates receive larger bedrooms, often with private bathrooms.

Contrary to its initial flexibility-oriented pitch, the co-living firm has seen strong demand for traditional year-long leases. In December, two months after its first building opened, Common rolled out a 10 percent discount for tenants who signed commitments.

Now, over 70 percent of its Crown Heights tenants are signed on for six months or a year, said CEO Brad Hargreaves.

“Generally, they were not people had a need for flexibility,” he said. “They loved community. They wanted to log into [group messaging app] Slack and see whether anyone was cooking pancakes upstairs.”

The new facility is the company’s first ground-up development, a model the company hopes to build on.

“Going forward, most of our projects are going to be cooperations with developers, for either ground-up developments or gut renovations,” Hargreaves said.

Along with the ability to customize its space, the arrangement offers somewhat wider profit margins. “It’s a little bit better from a financial perspective,” Hargreaves said.

He declined to specify the figures. Paul Henry referred all requests for comment to Common.

Once the residence is built, the company – which raised $7.35 million in Series A funding in July – will act as its master tenant, as it does in its two Crown Heights buildings, though on that front, Hargreaves is planning changes.

“This is one of the last master leases we plan to do,” said the CEO, again citing profitability. “Most of the deals going forward are going to be management agreements.”

Commons’ offerings have proved attractive to tenants, according to Hargreaves. Occupancy at the company’s first two buildings has been “close to 100 percent,” he reported.

“There was more churn than we expected after the first month,” Hargreaves said, “but almost none after that.”

The CEO expects robust demand for its new Williamsburg offering, citing the location’s local amenities – bars, clubs, restaurants – and its faster commute to Manhattan relative to the company’s Crown Heights offerings.

Source: Common plans 51-bedroom complex in Williamsburg

Mitchell Mekles, owner of 101-115 West 116th Street in Harlem, is fighting his own personal war with the Senegalese government and U.S. government enablers.

The Fort Lee-based landlord, who runs Mitchell Enterprises, rents 5,000 square feet at the building for a Senegalese consulate office, but the diplomats have allegedly been stiffing him on payments for real estate taxes and water bills. When he complained, the consulate stopped paying rent entirely.

When Mekles obtained an eviction order, federal marshals refused to carry it out, citing directives from the US Office of Foreign Missions and the Mayor’s Office for International Affairs.

In total, Mekles says he’s owed $135,000 in taxes, rent, water bills, legal fees and interest. according to his lawyer, the New York Post reported.

A representative of the consulate said the rent, at least has been taken care of.

“We had some delays due to bureaucratic issues but it is now paid for,” he told the Post.

On the issue of the taxes, the spokesperson cited the Vienna Convention, which governs requirements for diplomatic corps in foreign countries.

“We are sorting it out,” the diplomat told the Post.

Article 23.1 of the Convention states: The sending State and the head of the mission shall be exempt from all national, regional or municipal dues and taxes in respect of the premises of the mission, whether owned or leased, other than such as represent payment for specific services rendered.

Mekles also accuses the consulate of exceeding its allotted space, spreading into 8,500 square feet at the Harlem office building, crowding out another tenant, iHope, a school for disabled children. [NYP] – Ariel Stulberg

Source: Harlem landlord: Senegal owes me 5K!

Janus Property Co., one of the most prolific developers in Harlem, filed plans this week for a new 428,000-square-foot commercial building on the site of a two-story storage warehouse in the neighborhood.

The new 12-story building at 460 West 128th Street, located between Convent and Amsterdam avenues, will hold a mixture of retail and office space as well as a medical facility, according to a permit application filed Tuesday with the city’s Department of Buildings.

Retail space will occupy the building’s ground floor, while the cellar and lower levels will hold offices and “multipurpose urban outdoor recreation [area] with eating and drinking,” according to the filing.

“Outpatient medical offices” will span the second through fifth floors of the property, while the sixth through 12th floors are designated for general offices. The top four stories at the property – floors 9 through 12 – will feature roof terrace spaces for tenants.

In total, the building will hold more than 107,000 square feet of “community facility” space for medical offices and nearly 322,000 square feet of commercial space.

Demolition permits for the existing warehouse on the site were approved in September. Janus Property Co., led by Scott Metzner and Jerry Salama, purchased the property – as well as two adjacent properties at 439 West 127th Street and 461 West 126th Street – for $5.5 million about a decade ago.

Neither Janus Property nor HOK, the project’s architect of record, could be immediately reached for comment.

Source: Janus files plans for 428K sf Harlem office building

U.S. developers, seeking easy access to equity to finance projects, continue to turn to the Israeli bond market with its lower interest rates. At least 14 companies have borrowed over $2 billion since 2008, primarily Manhattan-based real estate firms.

REIT Strawberry Fields, which owns Alzheimer care facilities in the Midwest, is the latest to turn to Israeli market for financing, borrowing 265 million shekels, or around $67.8 million. Strawberry Fields follows in the footsteps of Extell Development, which raised 1.65 billion shekels in Israel or more than $422 million for its luxury condominium tower One57, and Related Cos., which raised 847 million shekels of five-year debt last year for their megadevelopment Hudson Yards.

Leading the way are Gal Amit and Rafael Lipa, Tel Aviv-based financial advisers of Victory Consulting, who last year helped developers raise more than roughly $1.3 billion through the Israeli bond market for New York projects. Amit and Lipa structured their first deal in 2007 and have now done 20 such deals with eight companies. They’re now courting developers in L.A. and other American cities.

U.S. developers can pay five or six percent interest on debt in Israel that would cost twice as much as home, Bloomberg reported. In addition, the bonds get better grades because the U.S. government’s credit rating is higher than Israel’s. Developers pool all of their buildings together in a new holding company and borrow against the collective equity, a contrast to the U.S. debt rule of never paying for one building with the assets of another.

No developer has defaulted on the bonds, though the challenge will come when the commercial real estate boom ends. [Bloomberg] — Dusica Sue Malesevic

Source: Israeli bond boom continues

Svetlana Zakharova Travis, the woman who accused Spitzer Equities head and former governor Eliot Spitzer of assaulting her at the Plaza Hotel over the weekend, was once an escort $5,000-a-night escort.

Travis, a Russian national – who divorced her ex-husband Michael in 2013, keeping his name – once penned an article under her maiden name titled “Sex is Sex, but Money is Money,” on her former career and stable of wealthy clients.

Her relationship with Spitzer began two years ago, while she was still working as an escort, the New York Post reported, citing an anonymous source.

Spitzer, who famously resigned as governor following a prostitution scandal, denied Monday that he was her boyfriend, the source told the Post.

Travis accused Spitzer of choking her in a Plaza suite on Saturday, but later changed her story and ceased cooperating with police.

She boarded a flight to Moscow Sunday evening, using a ticket she’d bought in advance, the Post reported, citing sources familiar with the situation.

“She said she just wanted to go back to Russia,” a police source told the Post. “She was lucid. She insisted on going . . . and there were no grounds for us to keep her here.”

The former governor’s attorney, Adam Kaufmann, released a “fact” sheet on Monday that alleged Travis made up the assault to avoid being sent to a mental treatment facility.

“In sum, the facts show that Ms. Travis was highly agitated, and feared that she would be kept for psychiatric treatment and consequently not be able to return to her family in Russia. Unsolicited, she has indicated that any allegations of assault were
false,” Kaufmann wrote.[NYP] – Ariel Stulberg

Source: Details emerge on Spitzer assault accuser, fallout

From the February issue: Michael Stern is the CEO of JDS Development Group, a firm with 11.5 million square feet under development in New York City and Miami.

In New York, residential developments include Walker Tower in Chelsea and Stella Tower in Hell’s Kitchen, as well as the forthcoming ultra-skinny tower at 111 West 57th Street, which is set to top out at over 1,400 feet. The firm has co-developed many of its recent projects with Property Markets Group. Stern launched the company in 2002 and today has around 225 employees. [more]

Source: The Closing: Michael Stern

The city’s biggest office landlords – and just about everyone else – are set to bid on the Jehovah’s Witnesses’ slate of massive Dumbo and Brooklyn Heights properties.

Vornado Realty Trust, Silverstein Properties, L&L Holding and Taconic Investment Partners are all among the Witnesses’ suitors, requesting detailed statements about the properties and signing confidentiality agreements, Bloomberg reported, citing sources familiar with the discussions.

Dozens of other firms based in the US and abroad are also inquiring, including the likes of Megalith Capital Management and Alloy Development.

“The market as a whole is looking at this transaction as a once-in-a-lifetime opportunity,” Ofer Cohen, president of TerraCRG, told Bloomberg. “Every Manhattan office player is going to bid on this asset.”

The Witnesses are planning a move to Warwick, New York after nearly half a century in Brooklyn. The group is marketing a portfolio that includes its 733,000-square-foot Watchtower world headquarters at 25-30 Columbia Heights.

Bids on that building are due Tuesday, Richard Devine, a spokesperson for the Witnesses, told Bloomberg. It could sell for as much as $500 million, Cohen told the news service.

Other properties on offer include a 152,000-square-foot residential building at 124 Columbia Heights and a development site at 85 Jay Street that spans a city block. Bids on the former site were received on Feb. 11. In all, the properties could go for $900 million or more. [Bloomberg] – Ariel Stulberg

Source: Vornado, Silverstein among potential bidders for Jehovah’s Witnesses complex

Buying an apartment in Manhattan is not just more expensive than elsewhere in the city – it’s also significantly overpriced compared to renting.

A median homebuyer in Manhattan would need to own an apartment for 7.4 years before owning becomes cheaper than renting, according to a new study by StreetEasy. The national median is 1.9 years.

The listing site calculated its comparison of the annual cost of renting and buying by including factors such as inflation, tax deductions, asset appreciation, opportunity costs of investing in a home and rent increases. On aggregate, these cost factors decrease over time for a homebuyer relative to a renter, meaning after a certain number of years owning becomes cheaper than renting. The more years it takes, the more expensive a for-sale market is compared to rentals.

The Manhattan median of 7.4 years shows why developers have been so keen in recent years on building condo towers or converting rentals to condos: for-sale apartments command a significant premium compared to rentals. The median number of years until the “tipping point” – as StreetEasy calls it – is reached is a mere 4.6 years in the Bronx, 4.4 years in Brooklyn, 4.1 years in Staten Island and 3 years in Queens. The citywide average is 4.9 years.

There are significant variations within boroughs. In Tribeca, the tipping point is a staggering 31 years but in West Harlem it’s a mere 1.2 years. And Brooklyn’s average of 4.4 years may seem low compared to Manhattan, but median homebuyers in Boerum Hill will have to wait 16.4 years until owning becomes cheaper then renting. – Konrad Putzier

Source: How long does it take before buying a NYC pad pays off?

Spitzer Enterprises boss and former New York governor Eliot Spitzer is under investigation by the NYPD after a woman accused him of choking her in a room at the Plaza Hotel.

The alleged victim, Svetlana Travis, has since changed her story and stopped cooperating with police, saying she was uninterested in pressing charges, the New York Post reported

Police responded to an 8 p.m. 911 call from Travis, who allegedly had told the dispatcher she’d had a breakdown and had cut her wrists. Spitzer greeted officers at the door, telling them “Everything’s fine,” according to the Post.

Officers left, telling the 911 dispatcher to call back Travis, who told them that she no longer needed help, the Post reported. They returned anyway, but found she’d left the room. Officers observed broken glass and blood stains, the Post reported.

According to the tabloid’s account, Travis then returned to the room. Police called EMS who took her to Mount Sinai hospital, where she allegedly told medics that Spitzer had attacked her.

“There is no truth to the allegation,” a spokesperson for Spitzer told the Post.

Travis changed her account in follow-up interviews with police, and told friends she was planning to immediately leave for Russia, the Post reported.

Spitzer resigned as governor in 2008 amid a prostitution scandal. In 2014 he took control of Spitzer Enterprises, the development firm created by his father Bernard Spitzer.

In April 2015, Spitzer sold the Crown Building at 730 Fifth Avenue in Manhattan to Jeff Sutton and General Growth Properties for $1.78 billion, a record for the highest price per square foot ever paid for an entire New York office building.

His firm is currently building three towers on the Williamsburg waterfront at 416-420 Ken Avenue, a $700 million project comprised of 846 rental apartments. He selected Eran Chen of ODA Architects to design the project.

After his father Bernard’s death, the former governor transferred interests in 985 Fifth Avenue — where he lived while serving as governor — and an $88 million Hudson Yards development site purchased in 2013. [NYP] – Ariel Stulberg

Source: Eliot Spitzer being investigated for allegedly assaulting woman at the Plaza

From Luxury Listings NYC: You may own a pantsuit (or two) of Margaret Thatcher’s, but if you really want to channel the Iron Lady, then consider buying her home in London’s Belgravia, which just hit the market for £30 million (about $43 million). [more]

Source: Step inside Margaret Thatcher’s £30M London home

The five-bedroom townhouse at 46 East 82nd Street between Park and Madison Avenues hit the market for $22.5 million last November. But as of this week, it is also available as a $100,000-per-month rental.

The current owners of the townhouse – an anonymous corporation registered as 46 East 82nd Street LLC – paid just $8.8 million for the property. But they have made some big changes, according to Curbed.

The owners gut-renovated the property and added “a limestone-like exterior,” a large staircase, a rear garden and a full-floor master suite. Also included: “a solid mahogany door clad in black with a polished nickel handle — fashioned after the front door of London’s Number 10 Downing Street.”

Check it out below:

[Curbed] –Christopher Cameron

Source: This M townhouse is now a 0K rental

Architects continue to push boundaries with their designs. ArchDaily recently announced the winners of its annual Building of the Year Awards, determining 14 of the top buildings in categories that ranged from offices to religious structures.

Over 3,000 projects were submitted, with the winners including buildings that are incredibly beautiful, creative, or that provide valuable service to their community.

From a store that was turned into a skateboarder’s paradise to innovative structures in less developed parts of the world, here are 14 architectural gems from around the globe.

Cultural Architecture — Harbin Opera House, China

Religious Architecture — Ribbon Chapel, Japan

Interior Architecture — House of Vans London, United Kingdom

Hospitality Architecture — Cella Bar, Portugal

Educational Architecture — School of Architecture at the Royal Institute of Technology, Sweden

Offices — Intesa Sanpaolo Office Building, Italy

Sports Architecture — Matmut Atlantique Stadium, France

Housing — The Great Wall of WA, Australia

Industrial Architecture — Factory in the Earth, Malaysia

Commercial Architecture — Miu Miu Aoyama Store, Japan

Public Architecture — Community Kitchen of Terras da Costa, Portugal

Healthcare Architecture — Partners In Health Dormitory, Rwanda

Refurbishment — House in Guimarães, Portugal

Houses— Vila Matilde House, Brazil

Source: The 14 best new buildings on the planet, according to architecture fans

From Luxury Listings NYC: Billionaire Stan Kroenke — better known as the owner of the L.A. Rams — just plunked down a massive amount of money to buy the 510,000-acre W.T. Waggoner Ranch in Texas. It was last listed for $725 million. [more]

Source: Billionaire Stan Kroenke actually bought this 5 million ranch in Texas

From Luxury Listings NYC: What do Uma Thurman, Ethan Hawke, Jerome Robbins and Margot Kidder have in common? They’ve all lived in “Ding Dong House.” That’s right, the playfully named home in the celebrity enclave of Snedens Landing, a secluded community along the Hudson, has had some high profile residents. Now you can join the roster for just $3.25 million. [more]

Source: Live like a celebrity in “Ding Dong House”

After being abandoned for more than 60 years, a Beaux-Arts building on Allen Street will see new life as a retail dining space.

The small building, sandwiched between lanes of traffic at Delancey Street, was a former bathroom serving elevated train passengers. Now, the city’s Parks Department has outlined plans to reactivate the structure, according to the Lo-Down. The city is preparing to issue a Request for Proposals for a food concession inside the building at the end of March.

The Lower Manhattan Development Corp. has allocated $1 million to renovate the building and the city added another $1 million for the project, according to the Lo-Down.

However, Parks Department officials said they are seeking a food service contractor that will pay for renovations themselves. The Parks Department hopes to use the $2 million to renovate the the area around the structure. [Lo-Down] –Christopher Cameron

Source: Beaux-Arts bathroom to reopen as restaurant

The Chinese economy maybe slowing down, but one Chinese city is seeing its real estate market boom out of control.

While national housing prices have recovered somewhat, prices in Shenzhen, the southern Chinese town neighboring Hong Kong, have risen an astounding 46 percent since the beginning of last year—by far the most among all major Chinese cities, according to the Wall Street Journal. To put that into context, Shanghai’s housing prices rose 16 percent and Beijing’s 10 percent in the same period.

In 2014, the Chinese government loosened restrictions on mortgages, helping Shenzhen bloom. A growing technology industry, limited supply and less-stringent buying restrictions have also driven buyers to the city.

Now, in terms of unaffordability, Shenzhen tops Hong Kong – one of the world’s priciest housing markets. Shenzhen’s housing prices were 20 times average disposable income in 2014, and is likely in the high 20s today, according to E-House China R&D Institute data cited by the Jounal. Meanwhile, prices in Hong Kong were 19 times average disposable income, according to research firm Demographia. [WSJ] – Christopher Cameron

Source: This Chinese city saw housing prices jump 50 percent in one year

The west side of Manhattan is filled with massive warehouses, vacant remnants of New York’s more industrial past.

But with the help of Skylight Group and its founder, Jennifer Blumin, those warehouses and otherwise disused historic buildings are now serving an altogether more luxe purpose: as the backdrop for runway shows.

At Moynihan Station — formerly the James A. Farley Post Office Building, which dates back to 1912 — a bare, cavernous space that was once used as a mail-sorting room has been transformed into a high-fashion runway. It’s just one of several Skylight properties that was used (and will be used) during New York Fashion Week.

“I’ve always loved the idea of taking something that was a post office and turning it into the hottest runway in the world. We’re bringing global exposure to historic buildings, ” Blumin said to Business Insider. “We don’t have to overly fetishize the past, but it doesn’t mean we should forget it either.”

Skylight itself doesn’t own the buildings it develops. The company takes control over historic but undeveloped spaces, renovates them to perfection, and then rents them out to companies planning events. In addition to Fashion Week, some of Skylight’s recent clients have included Google, Microsoft, Nike, and Ralph Lauren.

Nike, for example, tweaked the quote found on the facade of the former post office (“Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds”) to be part of a global media campaign appealing to athletes.

“We’re selling them a story more than we’re selling them space,” Blumin said. “People listen when there’s something much more profound to be said.”]

Moynihan Station is a building in transition. It will eventually become an extension of Penn Station, where Amtrak trains will come and go. By bringing high-profile clients and exclusive events like Fashion Week into the space, Skylight is playing a significant role in the development of the neighborhood.

“Part of what we were brought in to do was get the Moynihan Station name on the tongues of every New Yorker before the station is even functional,” Blumin said. “Fashion Week alone brings about $180 million to the neighborhood each year.”

Part of a Skylight building’s appeal is that it can be a blank canvas for clients to design around.

“Our current model is to give the designers the time and space to do what they do best, which is to build out an entire environment that’s reflective of their vision,” Blumin said. “We discover and provide the beautiful bones. They add the layers.”

For one event at Skylight Modern, a sparse, box-like space in Chelsea, Google essentially plopped half of an airplane in the middle of the room.

But for a 2013 Kenneth Cole show, the space had an entirely different look — bare, concrete columns, and models walking down runways illuminated by white light.

New York Fashion Week taking place at Skylight’s venues — Skylight Moynihan Station and Skylight Clarkson Square, plus MADE Milk Studios — is a somewhat refreshing change after years of shows held in clusters of tents at Lincoln Center. Some designers are still bucking the trend and holding their shows in one-off locations, like on piers on the Hudson River.

Blumin said she has heard some show-goers complain about the week’s traffic and how spread-out the venues are now. She personally gets around by Citibike.

“It’s not just about what happens inside the venues — it’s also about what happens on the streets. Why can’t a sidewalk be a runway?” she said. “The people who show up to these shows are usually just as interesting as what happens on the runway. It’s a form of expression, and that’s what New York is all about.”

Right before Fashion Week kicks off, Skylight’s work kicks into gear.

“My team works really long hours, and they live off M&M’s and Red Bull, basically. It’s a hectic time for everybody,” Blumin said. “Our job is basically done once the shows start rolling, though. If I go to a show, it’s for pleasure.”

“It’s nice to see the fruits of your labor.”

Source: Meet the architecture whiz helping produce killer events for Google, Nike, and New York Fashion Week

From Luxury Listings NYC: Galleries have been migrating Uptown for a while. But now it looks like that artists are too. [more]

Source: Contemporary artist Lisa Yuskavage picks up Midtown East co-op

Two New York state agencies are in late-stage negotiations to renew a 250,000-square-foot spread at a U.S. Postal Service-owned building at 90 Church Street in the Financial District, The Real Deal has learned.

The New York state Department of Health is looking to do a 10-year renewal for floors 13 through 15, and the Public Service Commission is looking to renew its lease for the fourth floor.

The two tenants are now in an extension period, after the 10-year lease they jointly signed in 2004 expired.

Asking rent at the 15-story, 1.15 million-square-foot Art Deco property is about $40 per square foot.

“The state is in a unique position in that they don’t pay property taxes at the building,” a source familiar with negotiations said. “It’s doubtful they would want to leave.”

Boston Properties’ John Powers is representing the landlord, while CBRE’s Stephen Siegel is representing the tenant. Both brokers declined to comment.

Formerly known as the Federal Office Building, 90 Church (also known as 74-90 Church Street, 1-15 West Broadway and 44-58 Barclay Street) was built in 1935 and was occupied for decades by federal agencies such as the Internal Revenue Office and the Army Corps of Engineers. Other tenants include the USPS and the New York City Housing Authority, which is looking to sublease at least a portion of its space, sources said.

Boston Properties, which holds the net lease on 90 Church and manages the property, extensively renovated it in the mid-1990s. Following the Sept. 11 attacks, when debris and dust led to widespread contamination of the interior, the property again underwent a rehabilitation.

Source: NY agencies close to 250K sf renewal at 90 Church

Retailer Nordstrom’s massive Manhattan flagship store in Columbus Circle is taking shape, with recently released renderings showing it will total 363,000 square feet and span four properties along Broadway between West 57th and West 58th streets, including at the base of Extell Development’s Central Park Tower.

At the 1,500-foot-tall tower at 225 West 57th Street, the retailer will have around 292,000 square feet across seven stories, two of them below grade. At 5 Columbus Circle, Nordstrom has 8,000 square feet of street of street-level retail space and about 20,000 square feet over four floors at 1776 Broadway.

The interiors of those three properties will be connected, but the fourth, a 43,000-square-foot, three-floor menswear store at SL Green Realty and the Moinian Group’s 3 Columbus Circle, will not.

The store is slated to open in 2019.

James Carpenter Design Associates designed the undulating glass facade for the seven stories at the base of Gary Barnett’s planned residential tower, which was formerly known as the Nordstrom Tower, and has a projected sellout of $4.4 billion. It would be the tallest apartment building in the Western Hemisphere upon its expected completion in 2018. [NY YIMBY and Curbed] — Dusica Sue Malesevic

Source: Revealed: Nordstrom’s massive new flagship store in Columbus Circle

In a move that’s sure to provoke reaction one way or another, Minskoff Equities is planning to develop two townhouses and nine apartments on the site of a parking garage the company bought a little more than a year ago on bucolic Jane Street in the West Village.

The developer filed plans to build a pair of two-story townhouses and a six-story apartment building with nine units comprising 30,597 square feet at 11 Jane Street, according to an application processed by the Department of Buildings Friday.

Minskoff purchased the site, home a two-story parking garage, in late 2014 for $26 million.

The DOB rejected the plans by the site’s previous owner to build a six-story, 41-unit residential project on the property. And since the development site sits within the Greenwich Village Historic District, the plans will have to go before the Landmarks Preservation Commission.

“We and many in the neighborhood have been keeping an eye on this one for a while,” said Andrew Berman, executive director of the Greenwich Village Society for Historic Preservation. “It’s been a long time coming, and since it’s a sensitive location, I think this one will get a lot of attention.”

The Jane Street project appears to be Minskoff’s first move into ground-up development since 51 Astor Place, the mixed-use property that hit full occupancy in early 2015.

Source: Minskoff files plans for townhouses, apartment building on Jane Street

The coming L-train shutdown, now all-but-certain, is likely to hit Williamsburg rents hard, reducing them as much as 15 percent, said The Real Deal‘s Hiten Samtani told BRIC TV earlier this week when he appeared along with DNAinfo’s Gwynne Hogan. The sales market though, will remain largely unaffected as buyers “play the long game, he said.

The Brooklyn-Manhattan line’s closure is also likely to affect another segment of the real estate world: Airbnb and other short term rentals. “Hosts” on these services, who habitually advertise units 15 minutes from Manhattan – “That’s never true, but it’ll be even more untrue,” Samtani said – are likely to see demand slide. Mobile ride hailing services such as Uber and Lyft, though, are likely to see a big boost, he said.[BRIC TV] – Ariel Stulberg

Source: L train shutdown is Uber’s “wet dream”

@FakeHopeConsolo eats “deals for breakfast, tenants for lunch, landlords for dinner and sexy junior brokers for dessert.”

For the past month, an industry insider has been lighting up Twitter by parodying Faith Hope Consolo, mimicking the retail broker’s grandiloquence and showing a knack for lampooning both New York City brokerage and one of its more notorious personalities.

“I only drink tea to impress British clients when they’re in town,” Fake Hope tweeted Jan. 22, in reaction to news that Starbucks was shutting down its Teavana tea bars in the city.

The real Consolo chairs the retail division of Douglas Elliman, and is one of real estate’s most divisive figures. Her client list includes Cartier, Zara and Louis Vuitton, and she’s a fixture at industry and society events. But she has faced criticism throughout her career for being a press hound and for allegedly taking credit for other’s deals, as The Real Deal reported in a 2008 profile.

On Twitter, the real Faith Hope Consolo bills herself as the “Queen of Retail” and a “celebrated expert [who] creates retail corridors worldwide.”

Fake Hope’s Twitter avatar is a shapely brunette wearing a figure-hugging red cocktail dress and clutching shopping bags. “She” cuts a snobbish, self-indulgent caricature of the genuine article.

“I gave my assistants the day off (first & only). Now to figure out this infernal ‪@nespresso machine,” Fake Hope tweeted on Martin Luther King, Jr. Day, in response to the City of New York’s question about how people were giving back.

In mid-January, Fake Hope tackled news that Macy’s would look to unlock real estate values: “I won’t even buy sheets at Macy’s, obviously they should turn it into luxury condos to unlock value for PE guys!” she tweeted. And she turned her nose up at a post about artist Frank Stella’s East Village studio selling for $22 million, tweeting: “Too bad this is in the east village, otherwise could be home to one of my euro luxury retailers!!”

Reached by email, Fake Hope told TRD:  “I’m just someone in New York City retail real estate…. I only know [Consolo] from sightings at events and the endless press releases.” Fake Hope insisted the parody account wasn’t intended as self-promotion or as a personal vendetta, but to have some “fun with the ridiculousness of our industry!”

Faith Hope Consolo’s take on her cyberspace counterpart? “This is a ‘free for all’ world and hiding behind a computer is simply too easy,” Consolo told TRD. “How many ‘wannabees’ are there out there? A very sad commentary on life in the ‘too fast’ lane.”

The Twitterverse is full of real estate impersonators. RFR Realty’s Aby Rosen has one (@BabyJRosen) as do Related Cos.’ Chairman Stephen Ross (@SteveRossFake) and Glenwood Management’s Leonard Litwin (@LeonardLitwin). Edward J. Minskoff Equities’ 51 Astor Place office building “tweets” from a parody account (@51deathstar) and 432 Park Avenue’s parody account (@432ParkAveNYC) has “Bow down, bitches” in its bio. And of course, there’s a yuuge crop of fake Donald Trumps.

Fake Hope, who has just 38 followers compared to Faith Hope’s 4,439, takes cues from the retail broker. Both have a (somewhat inexplicable) fixation with food halls lately. On Jan. 26, the real Consolo tweeted a link to her “Faithful Shopper” column, headlined “All Hail the Food Halls.” Fake Hope recently shared a link to a TRD article about New York City food halls, tweeting: “Didn’t ‪@cbrenyc do a food hall deal recently? My press agent would’ve gotten you a picture and a quote!”

Source: Faith, hope and a little satire

With big apartments so hard to come by in the city, there’s no shame in dreaming of expanding your own cozy unit into your neighbors’ seemingly-equally cozy space.

But, you’ll have to pay – with premiums running 10 percent more – and even then it may not come easy, the Wall Street Journal reported.

Douglas Elliman broker Adam Solomon “did a dance for a solid two years” with his East Side neighbors. They rebuffed his original offer, then, a year later, came back at him with an offer of their own.

Solomon and his husband finally bought the unit, paying roughly $15,000 over market value in his estimation, according to the Journal.

Late last year, writer and actor Tina Fey made like her “30 Rock” character Liz Lemon and bought out her upstairs neighbor at 300 West End Avenue, paying $9.5 million for a four-bedroom unit.

Her former Saturday Night Live co-star, late-night host Jimmy Fallon, bought himself a fifth unit in his Flatiron building, at 34 Gramercy Park East, where he first settled in 2002. [WSJ] – Ariel Stulberg

Source: It’s fine to covet your neighbor’s apartment, but you may have to pay

When Larry Silverstein saw the design for 2 World Trade Center, he did not respond positively, especially given the site’s history.

“My first reaction was, ‘Wow, this building looks like it’s going to topple. It’s going to fall over,’ ” the developer said during a panel Thursday on the 40th floor of another one of his buildings, 7 World Trade Center. The 84-year-old eventually warmed to Bjarke Ingels’ design — a series of stair-like boxes rising more than 80 stories tall — but in January, another crucial part of the building’s future fell apart. After 15 to 16 months of discussions, the building’s anchor tenant, News Corp., backed out.

“At the last moment, it was Rupert Murdoch who called and just let me know that they were concerned about the state of the world and the magnitude of the commitment that it would require if they were to go forward with the transaction,” Silverstein said. “He felt that the timing was bad from their vantage point.”

Silverstein reiterated previous assertions that it won’t take long for a replacement tenant to materialize. The building represents the “new language” of buildings in New York City and the creativity of its architect — qualities that will swiftly attract future occupants, he said.

“We’ll build tower two,” he said. “We will find a user for that building, and it won’t take up a lot of time. That’s a good building.”

During the Anchin Construction and Development Forum, Silverstein touched on other design decisions made over his career. He said that he has learned from many mistakes, including the original 7 World Trade Center, which ended up “a very pedestrian building,” due to the developer’s desire to save on construction costs.

“It was devoid of architectural quality, and amassed to a bulk of heaviness that was not what I really aspired to accomplish here, but I was intent on building as inexpensive as I could, and so that’s what we did,” he said. “But I learned as a result of that experience that it makes all the difference in the world to do first-class architecture because it will make all the difference in the world to prospective users.”

Silverstein, prompted by moderator Rosemary Scanlon, former dean of New York University’s Schack Institute of Real Estate, also touched on the slowing of the luxury condominium market. He said that the city has seen a tremendous influx of foreign capital, due to investors seeking a more secure market. But developers have been overzealous in their response to the demand, creating “five, six, maybe seven years” worth of supply in a very short period of time. As a result, activity in the ultra-luxury market “fell off the cliff,” he said.

“The flow has been incredible. It has made its way into the easiest form of hard asset acquisition. What is that? Condominium apartments.” he said. “What it’s caused, however, is an incredible movement in the condominium cycle, and what you have is a record number of condominium developments all over the city such that we suddenly find ourselves that the development community overdid it.”

Still, Silverstein said he doesn’t expect the flow of foreign investments to stop pouring into the U.S. anytime soon. It will just take some time for the overflow of luxury properties to be absorbed, he said.

As for new office buildings in the city, Silverstein believes there’s a lot of demand for modern office buildings. But he said his company, Related Companies and Brookfield Property Partners are the only developers pulling their weight in replacing the aging stock.

“Other than the three of us, there’s no creation of new office space certainly of any quantity or quality,” he said.

Source: Silverstein talks 2 WTC, languishing luxury market

After buying a huge 60-acre farm in Westchester last week, WeWork co-founder Adam Neumann once again turned to the city — eyeing a $39 million penthouse condominium unit at Daniel Straus’ Whitney Condos.

Neumann and his wife, Rebekah Paltrow Neumann, checked out the full-floor, 5,577-square-feet penthouse at 33 East 74th Street on the Upper East Side. The four-bedroom, four-and-a-half bathroom pad also boasts a 2,440-square-foot private wraparound terrace, chef’s kitchen and ample storage space.

The Neumanns are on a real estate roll, recently buying a Linden Farm estate in Pound Ridge in Westchester County in an off-market deal. The estate, which was once asking for $22 million, features an eight-bedroom, 13,700-square-foot main house, a stable, a riding ring, a pool and a tennis court, the New York Post reported.

The Whitney Condos is expected to open this spring, and the Post reported six of the 10 units have sold. In 2010, Straus paid $95 million to the Whitney Museum for an assemblage of six brownstones and two townhouses.

Douglas Elliman’s Katherine Gauthier and Lauren Muss are the listing brokers.

WeWork’s valuation recently jumped 50 percent to $15 billion after Fidelity Investments reported that its shares in the company had appreciated spectacularly in the fourth quarter of 2015. The collaborative workspace firm is also reportedly planning to enter another round of financing.

The company manages nearly 3 million square feet in the city and plans to expand both domestically and abroad. The Real Deal examined WeWork’s impact on the city’s CRE landscape in its December issue. [NYP] — Dusica Sue Malesevic

Source: WeWork’s Adam Neumann scopes out Straus’ Whitney Condos

From the February issue: International tourists buying up trendy handbags and other bling are not the only ones dialed into the ramped-up retail offerings on prime Fifth Avenue in Midtown. The city’s Department of Finance has also taken note of how rent rates on the most expensive shopping strip in the world are going gangbusters. And the agency’s response has been to slap some high-profile properties with higher tax assessments.

In the top case, the agency — which released its tentative assessment rolls for the 2016-2017 tax year last month — jacked up values at two retail condos in the same building by a staggering 95 percent. [more]

Source: Commercial market: The looming retail tax hike smackdown

The City Planning Commission this week approved an air rights transfer to China Oceanwide Holdings’ 80 South Street, bringing the site’s total buildable space to just over 1 million square feet.

The massive Chinese investment firm’s plans for the property include as much as 512,000 square feet of residential space, along with hotel, office and retail spaces, according to documents submitted to City Planning, Curbed reported.

China Oceanwide purchased the site, along with the adjacent 163 Front Street, back in August for $390 million in one of the largest development site buys of the year. The new air rights were transferred from an adjacent parcel though it’s not clear whether they came from 163 Front Street or from another property.

The previous owners of 80 South Street, the Howard Hughes Corp, had already received City Planning approval to build a 820,000-square-foot tower at the site.

While near the South Street Seaport, the site falls outside the Seaport Historic District. [Curbed] – Ariel Stulberg

Source: 80 South St. crosses 1M sf in air rights with City Planning vote

It took seven years, a major renovation, and multiple price chops, but interior design duo Cortney and Robert Novogratz finally sold their West Village townhouse for $14.5 million.

The Novogratzs bought the 1,935-square-foot space at 400 West Street for $4.3 million in 2007 and after extensive renovations transformed it into 7,180-square-foot home. It hit the market in 2009 at an asking price of $25 million.

It took several brokers and price points, the last one at $15.95 million, before an overseas buyer closed on the townhouse for $14.5 million, the New York Post reported.

Town Residential’s Steven Gold was the listing broker.

The stars of HGTV decor reality show “Home by Novogratz,” installed a new elevator at the five-bedroom, four-and-a-half bathrooms townhouse that also has 1,900 square feet of private outdoor space.

The townhouse was also the former home of both Julia Roberts and Heidi Klum.  [NYP] — Dusica Sue Malesevic

Source: After 7 years, West Village townhouse finally sells for .5M

Rents may have inched higher for the 23rd month in a row, but a lack of new deals and a large number of landlord concessions hint at an impending market slowdown.

Median rental prices in Manhattan increased by 1.5 percent last month — from Jan. 2015 — to $3,350, continuing a near two-year trend of year-over-year increases, according to Douglas Elliman’s latest rental market report. But the outlook isn’t exactly rosy: Vacancy rates are high, new leases are down and landlords are making a lot of concessions.

“We’re clearly seeing a slowdown,” said Jonathan Miller, president of Miller Samuel and author of the Elliman report. “Really, what is happening is this combination of affordability being tested because rents can’t rise forever, and the new product entering the market is generally skewed toward the luxury market.”

Vacancy rates hit the second highest rate in nine years at 2.82 percent. January saw 3,373 new leases, a whopping 19.8 percent drop from the same time last year. The decrease can be attributed to the success of landlords in convincing tenants to renew their leases, as well as high rents that drove tenants to the outer boroughs, Miller said.

The number of rentals with concessions reached 16.4 percent, which is nearly twice the five-year average. He said rent rates are likely to “bump along a high plateau” for some time before rents start to drop.

“We’re just in this transition period, and the market is trying to find its way,” Miller said. “But I don’t see big savings ahead for consumers. Anything that happens will be in slow-motion.”

Another report by Citi Habitats found that 17 percent of the brokerage’s rental transactions offered tenants a free month’s rent and/or payment of the broker fee, a 7 percent increase from January 2015. Gary Malin, president of Citi Habitats, said that the concessions have helped offset high rents and stabilize the market.

“The market is still strong. It’s just gotten a little too frothy for some people,” he said.

The trend is less pronounced in Brooklyn and Queens. Median rent hit $2,923 in Brooklyn last month, a .8 percent increase from December 2015 and a .8 percent year-over-year increase. The slight jump is a modest one, but follows two months with no year-over-year growth, according to the Elliman report.

Median rent in Queens fell to $2,767, a 4.8 percent year-over-year decrease. New leases in the borough jumped 53.1 percent from January 2015, due to a number of new rental projects that entered the market.

Source: Rentals beware: Market could be heading for a slowdown

As Donald Trump continues his unlikely run for president of the United States, his three elder children have become fixtures on national television. But they aren’t necessarily as skillful with the media as their dad as, and the spotlight hasn’t always been kind to them. As Trump basks in the glow of his big victory in New Hampshire, here’s a quick roundup of the public roles Ivanka, Donald Jr. and Eric Trump play in their father’s campaign:

Eric Trump
Title: Executive Vice President at the Trump Organization
Wild card: Owns Trump Winery in Virginia, a key swing state
Said about his dad: “He’s very passionate about himself.”

Eric Trump has been logging heavy airtime answering all the important questions pundits have thrown at him: Would his dad make a great president? What does it say about his dad that his kids turned out so great? And so on. Fishing for superlatives to describe his father, he tends to spurn the customary Trumpism “terrific,” preferring “absolutely amazing.”

Eric was either in a really weird frat, or he doesn’t know what waterboarding is, claiming on live TV that it “quite frankly is no different than what happens on college campuses and frat houses every day.”

On policy, he parrots his father but sounds less irate. Says people are “sick of the PC, sick of the nonsense.” Talks about infrastructure a lot.

When a CNN anchor asked Donald Trump, Jr. what traits Eric shares with his father, his response was they’re both good at “spatial visualization.” Make of that what you will.

Donald Trump, Jr.
Title: Executive Vice President at the Trump Organization
Wild card: Said to be fluent in Czech
Said about his dad: “Sometimes when I have a rough day I come back home and I can’t get away. He’s dominating every channel. I can’t get away. Big Brother is watching you at all times.”

Don Jr. wins style points for Trumpian hand gestures: flat, open palms, arms sticking out at a stiff 90-degree angle. (Eric does more of a lazy wrist flick when he talks) Also has that slightly hoarse Trump voice down pretty well. Likes to say “deals” a lot. Sample sound bite:

“You have people making deals that have never made other deals ever in their lives. And these are the deals that our kids and their kids behind them are gonna have to live with forever.”

Don Jr. had to spend several minutes on air defending his father’s proposal to ban Muslims from the U.S. and was visibly uncomfortable. Said something about a Muslim taxi driver telling him he supports Trump. The Fox News hosts were friendly and understanding, which probably helped.

Ivanka Trump
Title: Executive Vice President at the Trump Organization
Wild card: Has nearly 750,000 Instagram admirers
Said about her dad: “He would be amazing for women in this country.”

The most famous of Trump’s children and a successful entrepreneur in her own right, Ivanka stood on stage to introduce her father as he announced his presidential candidacy back in June. Her unofficial role in the campaign is to convince people that her father is a champion of women’s rights. It’s a Sisyphean task.

On CNN, she was asked to comment on Trump’s claim that no one would vote for his rival Carly Fiorina because of the way she looks and his suggestion that Fox News reporter Megyn Kelly asked him critical questions because she was on her period.

“Well I think a lot of the sensationalism around this was orchestrated – largely by the media,” she said, adding that her father “is not gender-specific in his criticism of people.”

Source: Donald Trump’s kids take spotlight in presidential campaign – with mixed results

Luxury condominium developers are rolling out the red carpet for tweens and teens — sure to send the tykes to Snapchat and Instagram to compete for who lives in the coolest building.

Developers are offering perks like soundproof music rooms, mini arcades, fitness spaces, and, of course, study lounges to entice parents into dropping millions on a new condo.

“It used to be that everyone left by the time their kids were in second grade and the five-bedroom colonial in Greenwich [Conn.] was the ‘I made it’ kind of statement,” Douglas Elliman’s Darren Sukenik told DNAinfo. “Now it’s the three- or four-bedroom in TriBeCa, and people are doing everything imaginable to stay.”

At 111 Murray Street, the 157-unit, 62-story tower, old school is new as 80s and 90s nostalgia hits the building’s 1,692-square-foot rec room fitted out with classics like skee ball and pinball. Apartments — ranging in prices from $2 million for a one-bedroom to $18.9 million for a five-bedroom — went on the market in September.

At the 18-story, Robert A.M. Stern-designed 20 East End Avenue, a junior lounge is decked out with vintage arcade games like Centipede, board games, foosball, mini-basketball table, complete with gaming consoles. Prices for the Upper East Side building range from around $4.5 million for a two-bedroom to $35 million for a five-bedroom penthouse. [DNAinfo] — Dusica Sue Malesevic

Source: The kids are all right: How developers are courting tweens

In a rapidly-changing area near the Greenpoint border that’s home to local hangouts named after far-off foreign lands and early explorers, Simon Baron Development sees big-time potential. The firm just closed on a site at 12 Franklin Street for $24 million, its first acquisition in Williamsburg/Greenpoint.

“I think we’re going to, in the short term, wait to see how the area develops,” said Matthew Baron, who runs the company along with Jonathan Simon.

A team at Cushman and Wakefield led by Brendan Maddigan and Mark Lively represented the seller, Samuel Brach, in the deal. Simon Baron was represented in-house.

The property, home to popular local eateries Northern Territories and Dirck the Norseman, is in a manufacturing zone and offers the developer the opportunity to build an office or retail building covering 55,500 square feet, or one spanning 133,320 square feet if space for a community facility were included.

Baron said he is keeping an eye out for what happens two blocks south, where fellow developer Toby Moskovits is seeking city approval to waive the community facility requirement for her planned 480,000 square-foot office project at 25 Kent Street in Williamsburg.

If successful in seeking a zoning amendment, Moskovits will free up more than half of the building’s space that would otherwise have to be set aside for medical, school, nonprofit or religious facilities.

Also nearby, the Related Companies, Midtown Equities and East End Capital are reportedly in discussions to buy the 11-acre CitiStorage development site on the Williamsburg waterfront where the partners could build 600,000 square feet of retail and office.

And of course, work is already under way at Greenpoint Landing, Park Tower Group and L&M Development’s mixed-use project that will bring 5,000 apartments to the waterfront. The developers last month topped out the project’s first two buildings.

Source: Anticipating development boom, Simon Baron buys M Greenpoint site

WeWork’s valuation jumped 50 percent to $15 billion this week after Fidelity Investments reported that its shares in the company had appreciated spectacularly in the fourth quarter of 2015. The firm is also reportedly planning to enter another round of financing.

The new valuation – based on a 53 percent rise in Fidelity’s appraisal – elevates WeWork nearly to the level of deeply-established commercial landlords such as Boston Properties, which is worth $17 billion and owns 10 times the amount of space as the startup. Mort Zuckerman, that real estate investment trust’s chairman, also happens to be a major investor in WeWork.

Investors’ WeWork optimism comes despite fears the company will have difficulty weathering a significant downturn, as some of its peers have, and despite the recent slowdown in the tech startup industry that provides WeWork with many of its tenants, the Wall Street Journal reported.

“The obvious risk and the obvious concern is, in a downturn, you would see some shakeout of your tenants,” Ian Weissman, an analyst for Credit Suisse Group AG, told the Journal. “It is an untested business model to a large degree.”

WeWork co-founder Miguel McKelvey said last fall he expected the firm to expand to 1,000 locations over the next few years, up from the 52 it managed at the time. The company has received nearly $1 billion in investment from the likes of Fidelity and T. Rowe Price Group.

The company has said its 40 percent profit margin, excluding construction costs, are strong enough to carry them through future down cycles.

Back in June, sources told The Real Deal that WeWork’s then-valuation was around 100 times the company’s earnings, an extremely high ratio. At the time, SL Green Realty was trading at about 20 times its earnings. Regus, another shared-office provider, traded at 34 times its earnings.

WeWork – which manages nearly 3 million square feet in the city – has recently pushed into new lines of business, including WeLive, its “co-living” dormitory venture. It’s also announced plans to expand internationally into countries India and China.

It also plans to expand into new cities domestically, many of which are unlikely to host the same sort of tech startup-heavy tenant pool the company has leased to in cities such as New York.

“Expanding aggressively right now—it’s probably a suboptimal time to be doing so,” John Bejjani, a real-estate analyst at Green Street Advisors, told the Journal. “But their business model isn’t going to pause for a few years waiting for the real-estate cycle to turn over.” [WSJ] – Ariel Stulberg

Source: WeWork could be raising even more money

Related Cos. is expanding its recent push into commercial real estate debt, raising as much as $2 billion in capital for a new fund along with partner Highbridge Principal Strategies.

Related Fund Management will soon begin taking in funds for the new vehicle, which will focus on properties from real estate investment trusts that have recently seen their stock prices sag.

REIT stocks have fallen far more in value than have the assets they control. In that situation, REITs have an incentive to sell their properties and buy back stock to boost its value, the Wall Street Journal reported.

The company began moving into debt financing about two years ago, working with Highbridge, a division of J.P. Morgan Asset Management. Its real estate funds currently manage a total of $3 billion in assets.

Its push is part of a trend towards real estate financing by non-traditional lenders. As banks and insurance companies have been slow to return to the commercial real estate debt space, REITs and private equity firms such as Related have moved in to fill the breach.

Traditional bank lenders have begun to return to the market though. At the end of the the third quarter of 2015, banks and thrifts held $1.79 trillion worth of commercial real estate debt, with $380 billion in commercial real estate loans outstanding, according to Trepp. [WSJ] – Ariel Stulberg

Source: Related to raise debt fund of up to B

Global ad agency Droga5 is more than doubling its space at Silverstein Properties’ 120 Wall Street in the Financial District, leasing 110,000 square feet in addition to the 98,000 it currently occupies.

The firm — recently named “Agency of the Year” for 2016 by Advertising Age — will occupy 11 floors at the 34-story, 650,000-square-foot building.

Asking rents at 120 Wall Street — now fully leased up — were in the mid-$50s per square foot, the New York Post reported.

Ken Siegel and Howard Hersch of JLL represented Droga5 in the deal. Roger Silverstein and Joseph Artusa represented Silverstein in-house.

Larry Silverstein, who bought the building in 1980, told the Post the deal was, “part of a seismic shift that has taken place in Lower Manhattan over the past decade.”

“What’s critical is that they are absolutely representative of TAMI-type tenants coming to Lower Manhattan,” the developer told the Post, “Not only for work by day, but many of their employees live in close proximity, and many live in Brooklyn right over the river.”

Silverstein’s firm recently suffered a setback when Rupert Murdoch’s News Corp and 21st Century Fox announced they were backing out as anchor tenants at Silverstein’s 2 World Trade Center. That project is now in limbo. [NYP] — Ariel Stulberg

Source: Droga5 takes an additional 110K sf at Silverstein’s 120 Wall St

Paul Massey is launching a political action nonprofit that will “foster a dialogue in the city” about issues related to education, infrastructure, crime and the economy.

Massey, who sold the commercial brokerage firm he built with Robert Knakal — Massey Knakal Realty Services — to Cushman & Wakefield reportedly for $100 million in 2014, said he wants to “build consensus” and named the nonprofit 1NY Together.

“This isn’t a tale of two cities; it’s one city and it can be great for everybody,” he said.

The Dickensian phrase became part and parcel of Mayor Bill de Blasio’s campaign when he was running for the office. The Real Deal in its February issue explored the real estate industry’s relationship with the mayor.

However, Massey told Crain’s this wasn’t about de Blasio’s tenure.

“We’ve had super-strong leadership for the past 20 years,” he told Crain’s, referring to Rudy Giuliani and Michael Bloomberg. “But I don’t hear people talking enough — and this has nothing to do with Bill de Blasio — about where we’re heading and what the blueprint is.”

Massey did say he thinks the mayor does not emphasis the city’s positives — including its growing economy.

“We’ve been handed four aces,” he said. “Why aren’t we taking advantage of it?”

Massey, who is a Republican, tapped one of the party’s state operatives, Bill O’Reilly, to manage 1NY Together. The “pro-growth” nonprofit’s donors will be made public, unlike the now defunct business-backed Committee to Save New York, which promoted Gov. Andrew Cuomo’s first term agenda. [Crain’s] — Dusica Sue Malesevic

Source: Paul Massey launches political action nonprofit

Buyers who get in early on new condominium developments may shoulder more risk, but they’re typically rewarded with a perk: lower prices.

In boom times, developers – and marketers – are known to raise condo prices throughout the sales and marketing of a building to maximize sales. To get a sense of the biggest price jumps out there, The Real Deal analyzed projects approved since January 2014 and ranked them based on which developments had the steepest price increases, via amendments to the condo offering plans filed with the state Attorney General’s office.

Vornado Realty Trust’s 220 Central Park South predictably topped the list, with Time Equities’ 50 West Street and Silverstein Properties’ 30 Park Place filling out the top three. Combined, those three projects call for some $1.3 billion in price increases over the total sellout figures that were initially accepted by the Attorney General’s Office.

Billy Goldstein, managing director of new development at Compass, said it’s the marketing team’s job to maximize sellout and the process starts even before a developer closes on the site.

“Once you’re in the market, it’s a very high-pressure game of inventory management… and you have to adjust your pricing as needed,” he said. Some developers prefer to sell slightly below market value in order to sell the building quickly and give investors a great return, according to Goldstein. Others with more “patient money,” he said, are unwilling to negotiate and will wait for their price.

Not on TRD’s list was Macklowe Properties’ 432 Park Avenue, which was approved by the AG’s office in July 2012. The total projected sellout is now $3.1 billion – a stunning $726.6 million more than the initial $2.4 billion sellout projection.

Extell Development’s One57 – which holds the distinction of housing the priciest condo ever sold for $100.5 million – was not on the list because it received AG approval in June 2011. The total sellout is now $2.4 billion, nearly $385 million more than the initial sellout.

According to the Marketing Directors’ Andrew Gerringer, the luxury market is relatively flat right now, meaning most developers are not aggressively raising prices.

“I think we’re in a wait-and-see pattern,” he said, adding that overall, “the worst thing you can do is show weakness and reduce the price by amendment.”

These are the five buildings with the steepest price jumps:

1) Vornado Realty Trust’s 220 Central Park South topped the list with a total sellout of nearly $3.1 billion, up a staggering $932.8 million since the condo plan was approved in March 2015. But that number was fueled by the developer’s decision to hold back seven penthouses when the building first launched. Since then, hedge fund manager Ken Griffin has reportedly agreed to pay more than $200 million to combine multiple units, and a Qatari buyer is rumored to be eyeing a mega-unit around the same price.

2) Time Equities’ 50 West Street, a 191-unit glass condo tower in the Financial District, checked in at no. 2. The current sellout is more than $1.1 billion, an increase of some $300 million since the building launched in May 2014. The developer is currently marketing a 3,594-square-foot penthouse asking $22.645 million, or $6,300 per square foot.

3) Silverstein Properties’ 30 Park Place in Tribeca saw its total sellout climb by $143 million to $1.23 billion since the building launched in mid-2014, and claimed the third spot. The Robert A.M. Stern-designed tower rises 82 stories and has 157 units. Unit 78B, spanning nearly 6,000 square feet, is currently asking $29.5 million, up from $27.5 million in June 2014.

4) Clocking in at No. 4 was Continuum Co.’s 45 East 22nd Street, an 83-unit condo in the Flatiron. The developer raised prices by nearly $106 million for a total of $716.7 million. The offering plan was approved in September 2014. A full-floor unit measuring 4,655 square feet was listed in March 2015 for $20.75 million, or $4,457 per square foot.

5) Aby Rosen’s 100 East 53rd Street, the Sir Norman Foster-designed tower adjacent to the Seagram Building, rounded out the top five. The total sellout is $867.8 million, up more than $105 million from the initial prices when the plan was approved in October 2015. Last month, a 6,760-square-foot penthouse hit the market asking $65 million, up $10 million from the initial pricing.

Source: Which new luxury condo developments saw the greatest price increases?

A new study suggests the hotel industry and Airbnb maybe be able to “share” the New York hospitality market after all.

Using data provided directly by Airbnb, hospitality research firm STR Inc. found no smoking gun that the $25.5 billion startup was pilfering the pockets of Manhattan hoteliers and shrinking hotel revenues.

The study found that based on pricing, 60.7 percent of the startup’s Manhattan supply is categorized in the midscale-economy class. That puts those units in direct competition with a relatively small slice of the Manhattan hotel market – just 13 percent – that fits into the same category.

Beyond that, 58 percent of Airbnb guests stay for seven days or longer, according to the study, which exclusively measured aggregate daily metrics from Airbnb. That’s a consumer class that the city’s hotel industry has largely ignored. Just 4 percent of the city’s hotel rooms are classified as extended stay, according to STR.

“Overall, in reviewing the Airbnb data for Manhattan, there appears to be no direct, statistical evidence suggesting Airbnb units and hotel rooms compete consistently for the same traveler,” the firm’s researchers concluded.

“That’s not to suggest there isn’t any overlap; it’s highly likely at least some travelers research both hotels and Airbnb units before making a booking decision,” the report stated. “However, given Airbnb hosts’ lower-tier rate structure and propensity for booking long-term (7+-day) stays, it’s likely this overlap is most common with extended-stay and economy hotels in Manhattan.”

STR’s analysis found no evidence that when demand was strong for Airbnb, it negatively impacted hotel occupancy or average daily rate.

When studying “compression nights” – or nights when hotel occupancy is 95 percent or greater – STR researchers found hotel rooms could charge a hefty 25 percent premium over periods of lower demand. Airbnb hosts, by contrast, charged only a 4 percent premium.

The researchers also concluded that since the Manhattan market overall runs at 87 percent occupancy with 52 peak nights a year, there’s plenty of unaccommodated demand that can spill over to Airbnb or new hotel supply coming to the market.

“There is no evidence that every room occupied by an Airbnb guest is a room taken from a hotel,” the report found.

For its analysis, STR requested data from Airbnb on supply, demand and revenue in Manhattan from December 1, 2013 through the end of November 2015.

The study is unique in that the direct data provides information on when listed units are actually booked as well as aggregate revenue across the listings. That information was not available to several recent studies that relied primarily on data scraped from Airbnb by third-party firm AirDNA.

It also leads to very different conclusions.

A study prepared by HVS Consulting & Valuation in October for the Hotel Association of New York City found a direct loss of $451.4 million last year to Airbnb.

A CBRE report released last week found New York to be the market most at risk in the country to competition from Airbnb, and in December the city’s Independent Budget Office said competition from home-sharing app – along with the rising dollar and increased hotel supply – was partly to blame for a drop of $14 million the city would collect in hotel occupancy tax.

Last year, The Real Deal spoke with a handful of hotel industry players to gauge their reaction to Airbnb’s impact on their industry. TRD also performed its own analysis of scraped Airbnb data and found that the company pushes up rental rates in New York City’s most desired neighborhoods.

 

Source: Study finds no ‘smoking gun’ on Airbnb and hotel revenues

From the February issue: Taylor Swift, Ben Stiller, supermodel Kate Upton and, of course, Spike Lee have all had courtside seats for the New York Knicks this season to bear witness to the 7-foot-tall Latvian rookie sensation Kristaps Porzingis sinking shots.

And on many game nights, Howard Lorber, the 67-year-old chairman of the mega brokerage Douglas Elliman, can be found next to that “Celebrity Row” stretch, sitting directly below the hoop.

That’s because last year, Elliman entered into a multi-year sponsorship deal with Madison Square Garden for the right to slap its grey-and-blue logo on an entire row of courtside seats at the arena. [more]

Source: Will Elliman’s spending spree pay off?

Nikki Field of Sotheby’s International Realty is set to step aside as the lead broker at Kushner Companies’ Puck Building, shortly after selling the building’s Penthouse II for $28 million.

That price was high – about $5,360 per square foot for the 5,222-square-foot unit – but was nonetheless more than $7 million below ask, and only the second closed sale since the property went to market, the Wall Street Journal reported.

The buyer “made a nice deal,” Jared Kushner told the Journal. “We’re OK with people getting good deals.”

The apartment features a landscaped, 800-square-foot terrace with views of the Chrysler Building. Field told the Journal the price was one of the highest ever paid for a residential property in Soho or Nolita. Mara Flash Blum of Sotheby’s also worked on the sale.

The Corcoran Group will take over marketing units at the landmarked, 207,000-square-foot building at 295 Lafayette Street in Nolita. Kushner bought the property in 1986 for $19 million, along with Harry Skydell, Joel Seiden and George Gellert. Kushner added six penthouses to the top of the building.

“Nikki did a great job,” Kushner told the Journal. But “it’s good every now and then to switch it up.”

Field took the decision in stride.

“It’s the nature of our industry,” she told the paper. “You get your turn at bat and then someone else is up.” [WSJ] – Ariel Stulberg

Source: Nikki Field out, Corcoran in at Kushner’s Puck Building

New York Wheel CEO Rich Marin, the former Bear Stearns executive tasked with heading up plans for the $500 million Staten Island observation wheel, has finally gotten tangled up in litigation among the project’s investment partners.

Marin, who has thus far watched the legal battle from the sidelines, was named as a defendant in an amended counterclaim filed by Eric Kaufman, one of the original founders of the wheel.

In the counterclaim, filed in response to a lawsuit brought last year by the wheel’s majority investors, Kaufman accuses Marin of conspiring with the project’s majority investors to improperly dilute his equity stake in the company and of breaching his fiduciary responsibility to serve the minority investors as CEO of the project.

Marin also says Kaufman should be held accountable for the escalating costs of the wheel, which was initially slated to cost $250 million but is now budgeted at more than $500 million.

“The counterclaim adds CEO Richard Marin as a counterclaim defendant for his role in the ballooning expenses that have more than doubled the cost of the wheel and in the efforts to marginalize and ultimately drive Kaufman out of the company without any basis,” said Kevin Cyrulnik of Kasowitz, Benson, Torres & Friedman, Kaufman’s attorney.

Marin declined to comment on the latest legal filings. The Staten Island Advance first reported news of the counterclaim.

The dispute dates back to July 2015, when Wheel Estate LLC, an entity held by the wheel’s majority investments Lloyd Goldman, Joe Nakash, Andrew Ratner and Jay Anderson, asked a judge to approve reducing Kaufman’s stake to just 1.08 percent from the 4 percent laid out in the original operating agreement, saying he had failed to pony up the funds to satisfy several capital calls to the board.

They also wanted to reduce the stake held by Meir Laufer, the original brains behind the wheel, to just 11.08 percent from 33 percent.

Both Kaufman and Laufer argued that the capital calls breached the terms of the project’s operating agreement.

Marin is no stranger to controversy. He was allegedly dropped from his role managing several troubled hedge funds at Bear Stearns in 2007, and was unceremoniously fired from his next gig – helping Africa Israel USA rescue some of its assets amid the recession – after just two years.

Meanwhile, Laufer claims that the board is trying to oust him as chairman amid the chaos. He filed an injunction to stop the ouster.

Laufer declined several requests for comment via his attorney, Kenneth Rubinstein.

Source: Rich Marin named in suit over New York Wheel cost overruns