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From left: Chris Hughes and 157 West 12th Street

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

It’s the fuse that finally ran out.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: Andrew Chung’s IPG Management takes Midtown space

From left: 70 Pine Street and the Spotted Pig

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

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

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

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

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

Source: Delayed 70 Pine St. finally welcomes tenants

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

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

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

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

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

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

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

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

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

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

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

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

Bill Ackman and Stuyvesant Town

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

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

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

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

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

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

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

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

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

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

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

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

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

CWCapital could not immediately be reached for comment.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

OpenDoor Labs’ website

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: Skyscrapers, stay off Sutton Place!: tenants

Di Fara pizza and Midwood

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

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

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

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

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

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

Source: South Brooklyn’s Midwood has arrived

Halston, left, seated next to Bianca and Mick Jagger

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

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

99 Washington Street, 163 Orchard Street and 171 Ludlow Street

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

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

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

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

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

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

Source: Manhattan experiencing historic hotel boom

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

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

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

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

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

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

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

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

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

Source: Officials call for property tax overhaul

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

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

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

Here’s what we found out.

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

A living room by Kelly Martin.

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

A dresser (and bar!) by Kelly Martin.

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

A Manhattan penthouse by Nina Etnier.

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

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

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

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

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

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

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

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

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

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

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

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

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

Buckingham-Palace

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

Source: Take a virtual tour through Buckingham Palace

From left: John Banks and Senate Majority Leader John Flanagan

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: NY Botanical Garden issues RFP for Bronx parcel

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: Port Authority Bus Terminal set for retail makeover

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: The Closing: Frank Sciame Jr.

Ziegfeld Theater in Midtown (credit: Google Street View)

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

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

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

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

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

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

From left: Time Warner Center, One57 and President Obama

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: 7 ways to avoid the new LLC disclosure law

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

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

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

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

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

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

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

Wang Jianlin

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

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

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

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

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

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

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

A rendering of the Dekalb Market Hall, set to open in March

From the January issue: More than 500 years ago, Algonquin Indians were trading meat and crops on an area along the Hudson River in Chelsea. In 1993, developer Irwin Cohen paid $9 a square foot for a rundown complex on that same spot and four years later he debuted the Chelsea Market, a gourmet food and shopping hall. At the time, retail rents at the Chelsea Market were $25 per square foot. Today, they are well over $100 per square foot, according to news reports. And the Chelsea Market has spawned roughly a dozen food halls. These markets bring together a wide variety of trendy specialty foods into one culinary potpourri. Where else can you dine on an Iraqi pita pocket, a $17 lobster roll and Japanese-inspired tacos all in one place? [more]

Source: By the Numbers: The wave of new food halls hitting NYC

The Metropolitan Museum of Art on the Upper East Side (inset: Daniel Brodsky)

The Met’s new addition will no doubt be a work of art.

The Metropolitan Museum of Art is planning a new 180,000-square-foot expansion.

The project, led by British architect Sir David Chipperfield, will include new space for galleries that house art from Africa, Oceania and the Americas, along with operational space, the New York Post reported.

“It will be no higher than the existing buildings that are there,” the Brodsky Organization’s Daniel Brodsky, who serves as the chairman of the museum’s board, told the Post. “It goes down and up to a rooftop with a terrace.”

The landmarked, 2 million-square foot museum, located on Fifth Avenue at East 82nd street, completed a new $65 million entrance plaza last year.

Last year, it issued $250 million in bonds last year to fund infrastructure projects, the Post reported.

The Museum of American History is also planning an addition, totaling 218,000 square feet. It’s projected to cost $325 million. [NYP] – Ariel Stulberg

Source: The Met to get 180K sf new wing

Clockwise from top: New York Wheel investors Rich Marin, Eric Kaufman, Meir Laufer, Jay Anderson, Lloyd Goldman and Joseph Nakash and a rendering of the project

TRD Special Report: In September 2014, Rich Marin stood on stage at TEDx St. George and invoked Cornelius Vanderbilt. He spoke of a passion project worthy of the Commodore’s native borough: transforming Staten Island’s sleepy waterfront into “the gateway to America” by building a giant wheel, the world’s largest.

“It’s been said that Staten Island never misses an opportunity to miss an opportunity,” he quipped. “But I like to think that they’ve been smart to wait for just the right opportunity.”

Marin, a tall, beefy man with a professorial air, knew a bit about high-stakes deals. He helped create the derivatives market at Bankers Trust, ran the asset management division at Bear Stearns, and later rescued Lev Leviev’s Africa Israel USA after a disastrous boom-time acquisition spree. The project he spoke of that day in St. George, the New York Wheel, was meant to be his “legacy to the world.”

But this legacy appears at risk. The wheel is now estimated to cost north of $500 million, more than twice the original figure. Critics say its revenue projections are wildly optimistic. And vicious infighting has ripped apart the fabric of the development team. All the while, the public officials and government agencies that threw support behind the project for the past three years have suddenly gone quiet.

“No one is really sure how it got to this point,” said one person with knowledge of the situation.

Origin story

A view from inside the London Eye

To understand the challenges facing the developers of the 630-foot-tall wheel, it helps to jump back to 2008, when Meir Laufer first visited the London Eye.

Laufer, CEO of Plaza Capital Management, a small Financial District-based developer, began studying every aspect of Britain’s most-visited paid tourist attraction. Why, he asked himself, did his hometown not have something similar?

“I thought: ‘Why not New York, and why not me?’” Laufer told Jewish newspaper Hamodia in 2012. “I knew that one day New York City would have such a wheel. I was utterly convinced that this was going to happen. I got to work right away.”

Laufer pitched the project to his connections, including eventual investor Eric Kaufman, a developer and a former top broker at Colliers International. Some of them scoffed. But once he struck an exclusive construction deal with Starneth, the engineering firm behind the London Eye, he and Kaufman were able to use the agreement to entice deep-pocketed investors.

Starting in 2010, the partners started looking for a suitable site, working with NYC & Company, the city’s official marketing arm, as well as with the city’s Economic Development Corporation. After flirting with the idea of South Street Seaport and Governor’s Island, they secured an eight-acre waterfront parcel on Staten Island’s North Shore.

The partnership grew to include prominent New York businessmen such as Andrew Ratner and Jay Anderson of the Feil Organization, Joseph Nakash, co-founder of jeans giant Jordache Enterprises, and Lloyd Goldman, nephew of the legendary Sol Goldman and founder of BLDG Management.

Laufer and Kaufman served as chairman and CFO, respectively, of the operating entity, New York Wheel LLC. Marin, who had been brought in earlier by Laufer and Kaufman, officially became CEO.

Rich Marin

“One of the puzzles the city had been trying to solve for years was how to take the tourists who ride the Staten Island Ferry every year and convince them to get off the ferry and explore Staten Island,” said Seth Pinsky, the former head of the New York City Economic Development Corporation and now a top executive with RXR Realty. “What we liked about the wheel was that it was a unique attraction that could pull people off the ferry.”

In September 2012, then-Mayor Michael Bloomberg unveiled the plan to the public. “The New York Wheel will be an attraction unlike any other in New York City — even unlike any other on the planet,” he said. “It will offer unparalleled and breathtaking views, and is sure to become one of the premier attractions in New York City.”

Whose wheel is it anyway?

Meir Laufer stands next to then Mayor Michael Bloomberg as the wheel is announced

At the press conference announcing the wheel, a beaming Laufer stood next to Bloomberg, clearly relishing the spotlight and his ascendance to macher status.

But his euphoria didn’t last long. He claims he soon found himself sidelined by the other investors, who by now held the majority equity stake in the project. He alleges he was discriminated against in part due to his Hasidic background, which his partners supposedly said was bad for business. 

“Because of his Hasidic garb and ethnic appearance, Laufer was treated differently than other investors and board members,” his lawyer claims in court documents filed in response to a July 2015 lawsuit from fellow investors. “Marin was even so bold as to tell Laufer that, in order to attract investors, the project could not have ‘more than one board member from your ‘community.’”

Laufer further claims he was removed from press releases, excluded from project updates and even barred from speaking publicly about the wheel. Things got so nasty that when he attempted to confront Marin he was told to “suck d**k,” he claims.

As costs began to skyrocket, the partners tussled over their equity positions in the project. As per the wheel’s original operating agreement from 2012, Laufer had a 33 percent ownership stake, court papers show. Wheel Estate LLC, an entity held by Feil, Goldman and Nakash, invested $7 million for a 51 percent stake; Marin, the CEO, had 8 percent; and Kaufman had 4 percent.

But since then, the Wheel Estate investors have allegedly moved to dilute Laufer and Kaufman’s equity positions by making several unnecessary capital calls to the board. Since June 2013, the board has opted to raise an additional $20 million from board members, rather than raising outside capital, the duo claim. Since their wealth didn’t match that of their fellow investors, Laufer and Kaufman haven’t been able to meet contribution demands and so were sidelined, they claim.

In August 2015, Wheel Estate asked a judge to approve reducing Laufer’s stake to just 11.08 percent and Kaufman’s stake to just 1.08 percent. Meanwhile, Feil, Goldman and Nakash want to up their combined stakes to 78.84 percent, saying they had to inject additional equity to cover Laufer and Kaufman’s obligations.

But Laufer and Kaufman claim the capital calls breached the terms of the project’s operating agreement. They insist that at the time, the project was on firm financial footing and wasn’t experiencing any shortfall (which they said was a prerequisite for a capital call).

“Wheel Estate has engaged in an egregious scheme to deprive the originators of the groundbreaking New York Wheel attraction of their rightful ownership interest in the project,” Kaufman’s attorney Marc Kasowitz told The Real Deal. “We are confident that this litigation will finally put an end to Wheel Estate’s abusive pattern of withholding critical financial information and attempting to improperly increase its own financial interest at the expense of the originators.”

Kaufman has also alleged massive financial bungling at the project, saying the wheel had no valid business plan in place, weak management and several unexplained cost overruns. 

Marin dismissed the claims as sour grapes, saying the original founders simply didn’t have the funds to keep up with the big boys.

“These two shareholders, who have no money, are sore about getting diluted due to this project costing more than we had originally thought,” he told TRD. “They should be thankful that we did not just throw in the towel but kept moving forward.”

Breaking down the capital stack

A rendering of the New York Wheel

So, just how much is this wheel going to cost?

When Marin and Laufer responded to a request for expressions of interest (RFEI) from the city in 2011, they estimated a total cost of just $250 million, inclusive of an adjacent terminal building (for $17.5 million) and visitor parking (for $36.8 million), documents obtained by TRD show. 

By the time the project was officially approved by the City Council in 2013, and further research had been carried out, the project’s total cost was up to $350 million.

But now, the project is slated to cost a total of $534 million, a 114 percent leap from original projections, despite no significant changes to the initial development plan, documents show.

The developers have already scored about $476 million of that sum, including $80 million of their own equity, $195 million in senior debt secured from JPMorgan Chase subsidiary Highbridge Capital Management last May, $174 million in mezzanine financing through Canam Enterprises, an EB-5 regional center, and $31 million raised from smaller investors through securities firm Houlihan Lokey.

In September, the board announced its intention to raise an additional $30 million through North Capital Private Securities, a Utah-based broker-dealer that would sell New York Wheel shares via its 99Funding online crowdfunding platform and other crowdfunding sites. The wheel, Marin said, will raise this funding by January.

As for a $20 million sponsorship deal the developers hoped to secure with sponsors such as Google, GE and Coca Cola, that plan was nixed after a provisional deal with insurance giant New York Life fell through and another willing suitor couldn’t be found.

Marin downplayed the overruns and attributed any escalation in costs to the evolving financing and construction environment in the city and to specific challenges associated with the waterfront site.

“While some of this is due to the passage of time, a lot of this is due to the site conditions requiring more extensive site preparations and foundations,” he said. “We are paying extra to meet the high resiliency needs of the New York Harbor location and quite a bit extra to set a standard of security for this site that makes it a safe site in an increasingly uncertain world.”

He continued: “We have been building this project in a robust New York City building environment where we compete for subcontractor and vendor services with many other large projects underway in New York City. This has undoubtedly contributed to considerable cost escalation, just as it has for many other projects.”

Construction costs have certainly risen at a brisk clip since the project was launched, including expenses for labor, concrete, electrical and insurance, as TRD reported in October 2014.  But New York Wheel insiders said too much of the project’s additional burden was due to interest payments on the senior debt from Highbridge, which, unusually, is far costlier than the mezzanine debt arranged by Canam.

The Highbridge debt carries an annual interest rate of 10.25 percent, documents show, while Canam’s mezz debt interest rate is just 2.75 percent. Therefore, for every six months the project is delayed, the development team must fork over nearly $10 million to Highbridge. The documents aren’t clear on the length of the Highbridge loan. A representative from Highbridge did not respond to a request for comment.

Marin said the project would be absorb these financial issues.

“We are about 35 percent complete with the construction, so we have the utmost confidence that everything is and will remain on track, he said. “Fortunately, the robust business model underlying the wheel’s economics can, we believe, support these added costs.”

Representatives for Starneth didn’t respond to multiple requests for comment.

More popular than Lady Liberty

(Video by Alistair Gardiner for TRD)

The financial projections distributed to would-be investors in 2015 differ dramatically from what Marin and Laufer first projected in their response to the city’s RFEI in 2011.

In its first year of operation, the wheel was originally slated to earn $15 million from admissions. But now, after jacking up the proposed price of a ride to $35 from $15, the developers are projecting $95.9 million in admissions, more than six times that amount.

And the optimism doesn’t end there. Projected gift shop revenues have jumped to $8.75 million from $1.25 million (a sixfold increase), parking revenues are expected to be $2.5 million, up from $250,000 (a ninefold increase), and event revenues are projected at $3.52 million, 27 times more than the $125,000 originally projected.

Overall, documents distributed to investors last year predict total revenues of $127.85 million for the wheel’s first year in business, more than six times the $20.73 million projection made to the city in 2011.

Those projections rely on the wheel drawing more than 4 million riders in 2017, its first year of business, and 3.5 million riders annually in successive years. Marin said the wheel would be starting at an advantage, given that the Staten Island Ferry carries about 2.5 million tourists annually.

“When you’re looking to do 3.5-plus million visitors, having 2-to-2.5 already sort of on the boat is a very good start,” Marin said in a recent promotional video for the wheel.

By comparison, the Empire State Building observatory drew 4.3 million visitors in 2014, according to Empire State Realty Trust, the entity that owns the skyscraper. The Statue of Liberty draws an average of 3.5 million visitors per year, according to the National Park Service, and the Top of the Rock draws an average of 2.5 million visitors per year.

The politicos and government agencies which championed the project for the past three years now have little to say about the wheel.

“We don’t have any comment regarding this except to say we’re very excited about the project and its future impact on New York City tourism,” said a spokesperson for NYC & Company, which once billed the wheel a key fixture of “the new New York.”

Staten Island Borough President James Oddo, a longtime wheel supporter, declined to comment other than to say that the project still had his backing.

Comparing wheels

The proof of the pudding will be in the eating — or, in Ferris wheel terms, in the riding.

As developers of other giant wheels can attest, projections don’t always pan out.

Caesars Entertainment’s High Roller, a 550-foot-tall giant wheel that opened on the Las Vegas Strip in 2014 at a reported cost of $175 million, has reportedly fallen well short of its attendance projections.

While numbers have been climbing, the company said early last year that High Roller was averaging just under 5,000 riders per day (1.83 million annually), compared to projections of between 8,000 (2.92 million) and 11,000 (4.02 million) a day, the latter of which would have yielded annual revenues of up to $60 million.

And what of the London Eye, the inspiration for Laufer’s vision?

Built at a cost of $100 million in 2000, the Eye is estimated to earn $78 million a year, based on 3.6 million visitors and an average ticket price of around $22, according to a report by consulting firm Roland Berger.

But Marin, in the thick of building his legacy, isn’t interested in cautionary tales.

“Dream no small dreams,” he said during his TEDx talk, channeling Victor Hugo, “because they have no power to stir the hearts of men — or women.”

Source: Is the New York Wheel spinning out of control?

Sample work of Floored, 158 West 27th Street

From the January issue: Every real estate startup under the sun is looking to become the industry’s next tech mainstay, but not every one makes the cut. The Real Deal sifted through dozens of startups this month and found several interesting tools that could have a significant impact on the industry. [more]

Source: The 5 startups that could forever change the face of real estate

Amir Korangy

The Real Deal, long considered the bible of New York and South Florida real estate and finance, is thrilled to bring its award-winning mix of breaking news and in-depth analysis to Los Angeles.

As the county sees an unprecedented amount of development, with both domestic and foreign capital continuing to flood the area, it’s all the more important that L.A.’s complex and varied submarkets get the serious journalistic coverage they deserve.

I am very pleased to announce that the steward of our newest publication is Hannah Miet, who led real estate coverage for the Los Angeles Business Journal before joining The Real Deal Los Angeles as managing editor. Her work has appeared in the New York Times, Newsweek, the Washington Post, Complex Magazine, the Times-Picayune and the Atlantic Wire, among other publications. Hannah lives in Los Angeles’ Echo Park neighborhood.

I know that TRD’s signature blend of up-to-the-minute real estate news, profiles of key and up-and-coming players, industry rankings and behind-the-scenes views will fast become mandatory reading in the L.A. market, as it is in both New York and South Florida, where we have upwards of 2.5 million visits a month online, and a print circulation of nearly 128,000 readers.

We look forward to feedback from our readers on what they’d like to see covered. Also, if you have any news to share, please let us know at LANews@TheRealDeal.com.

Cheers to what’s ahead,

Amir Korangy
Publisher

Source: Letter from the Publisher: We’re live in Los Angeles

From left: 10 Hudson Yards, on the left, the Bank of America Tower and the GM Building

Related Companies and Oxford Properties saw 10 Hudson Yards’ “market value” – assessed for tax purposes – grow by nearly $250 million year-over-year according to city assessments released Friday, the largest increase of any property in the city.

The city valued the property at $332.8 million, up from $84 million the previous year.

Vornado Realty Trust’s 1.8 million-square-foot hotel and retail building at 1375 Broadway saw its city-assessed market value climb by just over $200 million, to just over $1 billion.

In total, 15 city properties crossed the $1 billion threshold this year, including the Bank of America Tower at One Bryant Park; Boston Properties, Safra Group and Zhang Xin’s GM Building; and Stuyvesant Town, recently purchased for $5.3 billion by the Blackstone Group and Ivanhoe Cambridge, along with city landmarks like John F. Kennedy and LaGuardia airports, Yankee Stadium and Citi Field.

Tentative 2017 “market value” assessments based on data from FY 2015

The city’s figures – despite measuring what’s known as “market value” – are not in fact meant to estimate the price of properties were they to be sold on the market.

For commercial properties, the estimates are often as little as 50 percent or less of the true market value. In addition, these figures are based on income and expense figures filed with the city for the calendar year 2014, so the values lag the current market by a few years.

As an example, the assessed “market value” of the GM Building – which was valued at $3.4 billion when Zhang Xin and Safra bought their stakes – was pegged by the city at $1.7 billion.

All together, the city valued New York real estate at just over $1 trillion, a 10.6 percent increase from the previous year.

Source: 15 NYC real estate properties assessed at over B

(Illustration credit: Noah Patrick Pfarr for The Real Deal)

As the city’s real estate industry comes to terms with Friday’s expiration of the 421a tax abatement program, there remain questions over what the development landscape will look like without the abatement, and whether industry interests and construction unions can agree on terms to extend or replace a tax break many consider essential for building multifamily housing in New York.

While the industry remained hopeful as of a few weeks ago that the Real Estate Board of New York and the unions could arrive at some sort of compromise, many players were wary of the unions’ demand for a “prevailing wage” mandate on 421a projects that developers say would render would make construction prohibitively expensive.

“I think we were very skeptical from the beginning that there was going to be a deal,” said David Schwartz, a principal at Slate Property Group who was among a group of developers who lobbied for the abatement in Albany in June.

“From the developer side, you’re adding more affordable housing [requirements from the city] and then on top of that, [additional construction] costs on top of it,” Schwartz said. “We also don’t control land prices, which are high. If you’re adding more affordable units and more cost, it’s not going to work.”

The numbers are tight to begin with to produce affordable housing,” he said. “These rental deals are not like condo deals, where the profits are huge.”

Some observers noted that a 421a deal was doomed from the start, given how the issue “was portrayed as a tax break for developers,” according to political strategist Hank Sheinkopf.

“It was set up for conflict from the beginning,” Sheinkopf noted. “The mayor [Bill de Blasio] set the discussion on affordable housing, and therefore it became almost impossible to have a discussion about tax incentives for developers. That’s the way the conversation was framed.”

The de Blasio administration’s goal of creating and preserving 200,000 affordable housing units in the city over the next decade could take a hit if the abatement is no longer around, sources said.

“Most of the developers I’m speaking to, they just want to make money” said Shaun Riney, the top-producing broker in Marcus & Millichap’s Brooklyn office “They embrace diversity of tenants and different income streams, as long as the city can properly structure the incentives to promote [affordable housing] requirements. They have to create a pathway where a developer can make a profit by doing so.”

Without 421a, the most popular pathway for such developers is now gone. While many builders sought to get projects in the ground before the end of the year to be eligible for the abatement, Riney noted “there has been a pause” in recent months in the market for development sites – “especially larger sites” where the viability of the project could rest on whether or not a tax abatement is in place.

421a also helped developers deal with what many in the industry consider a broken property tax code — with Riney citing “an insane amount of uncertainty as to what [property owners’] taxes are going to be every year” and Schwartz bemoaning the fact that, for all the discussion around 421a, “nobody’s examined the fact that the tax rate on rental housing doesn’t work.”

Unless a new 421a agreement is put in place, Schwartz said he anticipates seeing “a bunch of legacy projects over the next year or two that were grandfathered in” under the tax abatement prior to the Dec. 31 sunset. Otherwise, “the only answer now is to do condos,” he said.

The NYU Furman Center recently released a study that said the expiration of 421a could lead to a drop in land prices in areas where the tax abatement is most popular. But Schwartz said it “was already hard enough to find sites that work as rentals, and now it’s just become impossible. Regulation doesn’t control land prices, the market does. The reason land prices were going up were condos, not rentals.”

Instead of land values declining, Schwartz predicted more condo development across the city as well as more hotel, retail and even office development in lieu of rental housing.

Under such circumstances, the question for most is when – not if – the relevant principals in New York and Albany get together and decide on a resolution that they see is necessary to get developers to build rental units.

“It’ll come down to the [Assembly] speaker, the majority leader of the [state] senate and the governor, ultimately,” Sheinkopf said. “The pressure will be on them from the real estate community and the development world… Unless legislators figure out the means to turn this into an affordable housing [issue], it’ll be very hard to get a tax break passed.”

Riney said investment sales could potentially slow down.

“Uncertainty creates paralysis,” he noted. “That’s why they can’t afford to not do anything. You want commerce to continue.”

Schwartz said he remains hopeful for a deal.

“I don’t know what it will look like,” he said, “but I know there needs to be a solution.”

Source: Developocalyse: The Day After

Michael Meldman

Michael Meldman’s journey has taken him from the beer pong table to the negotiating table. The Arizona-based developer, once “the epitome of a frat boy,” now runs Discovery Land Company, which made over $1 billion in sales last year.

The firm owns 18 private resorts around the country, most of those in California and Arizona.A few are further afield, such as in Hawaii and Southampton.

Homes at the firm’s developments, which Meldman describes as “frat houses for families,” go for between $1 million and $50 million, the Wall Street Journal reported.

Meldman’s extracurricular experiences at Stanford University informed his approach as a developer, he told the newspaper. “I am one of the best beer-pong players in the world,” he said.

“A lot of these guys who made a lot of money don’t have fun and don’t know how to have fun. We show them how to have fun,” Meldman said.

Meldman frequently buys homes in his new developments. Then, he sells them when he begins the next project.

Two of his current homes – a nine-bedroom at Discovery Land’s Los Cabos developer and a 7,900-square-foot pad at its Bahamas community – contain custom beer pong tables, one of which cost $6,000.

Meldman is “a very civilized frat boy now,” his son Hunter told the Journal. [WSJ] – Ariel Stulberg

Source: Meet the Arizona developer who builds “frat houses for families”

From left: SilverTech partners Charlie Federman, Lawrence Wagenberg and Tal Kerret

From the January issue: Roughly $1.5 billion flowed into real estate tech companies in 2015, and those funds came from an increasingly diverse pool of investors.

In addition to about a dozen venture capital firms, institutional and family organizations — which wouldn’t have touched real estate tech 10 years ago — are expanding their hold on the nascent industry.

“You have everyone from the Milsteins to the Rudins to the Wilpons to the LeFraks all doing deals,” said Zachary Aarons, an angel investor and co-founder of MetaProp, a New York City-based real estate technology “accelerator,” which mentors tech startups. [more]

Source: A look at the developers bankrolling real estate tech’s gold rush

Renderings of 520 Park Avenue, 220 Central Park South and 3 Sutton Place

Developers have realized that mechanical space – once considered a necessary evil – can significantly raise the value of buildings when placed strategically.

By increasing the height of mechanical floors – which house the building’s heating, cooling, electrical, ventilation and other systems – and placing them at the bottom of the building, developers are able to build more residential units at higher elevations, which command a premium price.

Vornado Realty Trust deployed the tactic at its 950-foot-tall luxury tower at 220 Central Park South. A full six of the building’s lower floors are given over to mechanical uses, with ceiling heights between 18 to 24 feet. In total, the gambit allowed Vornado to add 100 feet to the tower, Crain’s reported.

Bauhouse Group’s Joseph Beninati, which is looking to build an 80-story condominium tower at 3 Sutton Place, told Crain’s he planned to build 24-foot mechanical floors.

“Higher floors are more valuable,” Beninati said. “It’s a bedrock rule of real estate.”

That’s double the height of most of the building’s residential floors. The trick will add 100 feet or more to the tower’s total height, Beninati estimated to Crain’s. The firm is moving ahead with construction on the project, though it’s reportedly yet to secure financing for it.

“In general, a floor premium, controlling for other factors such as view, is 0.5% to 2%,” Corcoran Sunshine’s vice president of research Ryan Schleis told Crain’s.

Back in September, The Real Deal wrote about another trick developers were employing to maximize space: buildings that widen as they rise, creating an inverted pyramid. [Crain’s] – Ariel Stulberg

Source: Here’s a little trick that developers use to build taller towers

The city has assessed the market value of NYC’s taxable real estate at $1.07 trillion

City tax assessors confirmed what everyone more or less knew: prices have shot up over the last year. The total market value of taxable property crossed the $1 trillion threshold for the fiscal year beginning July 1, a 10.6 percent jump from the previous year. 

That increase is the largest since the last year of the pre-crisis boom, the year ending in June 2008, the Wall Street Journal reported.

Average condo tax assessments rose the fastest among unit types, increasing by 10.7 percent to $9,302. Average taxes on co-ops rose by 6.5 percent to $6,837.

Brooklyn saw by far the largest spike in market values, with a whopping 16 percent increase year-over-year. Queens values climbed by 9.9 percent while Manhattan, which foots nearly two-thirds of the city’s property tax bill, saw values increase by 9.3 percent.

“This year’s tax roll is simply a reflection of New York City’s growing real estate market,” Jacques Jiha, commissioner of the city’s Department of Finance, told the Journal.

Construction of rental properties jumped during the year and now account for more than a third of all construction activity in New York City, and more than half of all construction activity in Brooklyn, Jiha added.

It’s important to note that “market values” as assessed by the city for tax purposes are generally well below actual property values in the investment sales market. The Google Building at 111 Eighth Avenue, for example, was assessed by the city as being worth $827.7 million in 2013, but the search giant bought the property for a cool $1.8 billion in 2010. [WSJ] – Ariel Stulberg

Source: NYC real estate assessed at trillion

Clockwise from left: Domingo Zapata, Sean Combs, Bobby Flay and Susan Bloomberg

From Luxury Listings NYC: A round up of all the deals and steals that have happened this week involving celebs and their homes. [more]

Source: It’s a wrap: this week’s celebrity home swaps

A bathroom in One57

From Luxury Listings NYC: January is a time of renewal, when many of us refocus on our health and well-being. But sometimes you can’t spend a week at Canyon Ranch, or you just may prefer a spa that’s closer to home  —  like down the hall. [more]

Source: How to make a blissful bath

J. Crew CEO Mickey Drexler and 140 Franklin Street first

It’s back! The chic Tribeca apartment of J. Crew CEO Mickey Drexler has listed once again, this time for $25 million.

The apartment at 140 Franklin Street first hit the market in early 2015 asking $35 million. The price was then slashed to $29 million. By July, it was off the market.

Now that Drexler is trying again, here is a look inside the highly designed home via Curbed.

Celebrated designer Thierry Despont is responsible for the interiors in the 6,226-square-foot apartment. It has five bedrooms, five bathrooms, three walk-in closets, 11-foot ceilings and a custom “billiards area.”

[Curbed] — Christopher Cameron

Source: J. Crew CEO now asking M for Tribeca apartment

Oft-controversial Republican presidential frontrunner Donald Trump has owned a lot of New York real estate over his decades-long career, but few are as iconic as the Plaza Hotel. Here are 12 facts about how precisely that deal went down and how Trump ultimately lost the Plaza, via the New York Times.

1. Trump negotiated the deal for the Plaza with Tom Barrack — who represented Texas billionaire and Plaza Hotel owner, Robert Bass — in just 30 minutes.

2. The owners expected the hotel to fetch as much as $500 million at auction.

3. Trump paid $407.5 million for the hotel, a tremendous amount for a hotel at the time. But he said: “It wasn’t purely about the bottom line.”

4. Trump agreed to a no contingency deal.

5. A rent-controlled tenant named Fannie Lowenstein stood in the way of Trump’s plans for a condo conversion.

6. To get Lowenstein out, they had to give her a room in the Plaza almost 10 times larger than her studio with a view of Central Park rent-free for life — also, new furniture and a Steinway piano.

7. Trump handled nearly all of the negotiations for the Plaza himself.

8. The Plaza lost $74 million the first year into Trump’s ownership.

9. In the meantime, Trump racked up some $900 million of debt by personally guaranteeing building loans.

10. Trump signed over nearly all of his properties, including the Plaza, his yacht and his jet, in exchange for more favorable terms on his personal guarantees.

11. The Plaza was in bankruptcy protection just one year after Trump bought it.

12. Seven years later, the hotel sold for $325 million to a partnership between Prince Alwaleed bin Talal of Saudi Arabia and CDL Hotels International of Singapore.

[NYT] — Christopher Cameron

Source: A look inside Trump’s famed Plaza deal

Joe Moinian and Joe Chetrit

Joseph Moinian made a name for himself with audacious real estate deals — like the building on John Street that he bought at $12 a square foot and rented out for $58 a square foot. Or his purchase of Chicago’s Sears Tower, which he bought in 2004 with Joseph Chetrit and a number of other investors, paying $840 million. Chetrit’s most recent acquisitions include 620 Sixth Avenue, which houses Bed Bath & Beyond, Filene’s and TJ Maxx. Yair Levy and Charles Dayan were his partners on that $300 million purchase last year.

But ask Moinian, Chetrit, Levy or Dayan about their very first deals, and you’re liable to get stories about an altogether different kind of transaction. They’ll probably tell you about selling pants, shirts and undergarments to the very same kind of business owners to whom they now rent space. Read the full article from the March 2007 issue here.

Source: From the archives: Developers cut from the same cloth

The W New York Downtown

From Luxury Listings NYC: The W New York Downtown is offering one of the most spectacular deals in town. But we aren’t sure which is more outrageous, the offer itself or its name. Called, “Live Like a BO$$,” the hotel is offering an entire floor of the hotel for rent during weekends in February, presumably to a group of deep-pocket party animals. [more]

Source: The W Downtown wants you to “Live Like a BO$$”

From left: Todd Bassen and Joseph Farkas

Todd Bassen, a former top executive at Invesco and co-head of real estate at WeWork, is joining Metropolitan Realty Associates as a managing principal.

“After 15 years of organic growth, the time was right to bring in a seasoned New York investment expert to advance the expansion of the company,” the firm’s founder Joseph Farkas said in a statement.

Bassen was a top acquisitions executive at Vornado Realty Trust, and then spent five years as head of New York real estate acquisitions for asset manager Invesco. In May 2015, he jumped ship to co-working space giant WeWork, becoming its co-head of real estate, but left the firm a mere three months later.

The hiring of Bassen signals a stronger focus on core New York City for Metropolitan Realty Associates, and potentially on bigger projects. The 15-year-old firm, which in the past focused primarily on the outer boroughs and suburbs, is opening a Manhattan office at 555 Madison Avenue. Its most recent major project is Riverdale Crossing, a 159,000-square-foot shopping center in the Bronx which it completed in 2014 and sold to the Vanbarton Group in October 2015 for $133 million.

The firm also developed the Garden City Square complex in Long Island, which it sold to Hampshire Companies for more than $80 million in 2013.

Bassen told The Real Deal that the company will focus on projects between $50 million and $250 million, but could go higher. “After 20 years of institutional investing, working with great companies like Vornado and Invesco, I wanted to do something more entrepreneurial,” he said.

Source: Todd Bassen joins Joe Farkas’ Metropolitan Realty Associates