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Dalian Wanda Group, one of China’s largest developers and owner of AMC Theaters, made another move into the Western media market.

The firm – headed by China’s richest man, Wang Jianlin – will buy a majority stake in Legendary Entertainment, the film studio behind such titles as “Jurassic World,” “The Dark Knight,” “Man of Steel,” and others.

The deal values the Burbank, CA-based company at between $3 billion and $4 billion, Reuters reported.

Wanda, which made about $38.8 billion in revenue in 2014, has bought a handful of Western real estate and media properties over the last few years.

As of June 2015, Wanda owned seven major real estate properties abroad, in London, Madrid, Los Angeles, Chicago and Sydney. It bought AMC Entertainment Holdings, which controls the second-largest theater chain in the U.S. in 2012 for $2.6 billion.

It also owns British yacht maker Sunseeker and Swiss sports marketing firm Infront Sports & media.

The firm doesn’t own any real estate properties in New York, and recently closed its only office here, at 1330 Sixth Avenue. [Reuters] – Ariel Stulberg

Correction: AMC Entertainment Holdings is the second-largest theater chain in the United States, not the largest. 

Source: Chinese real estate giant Dalian Wanda to acquire majority stake in Legendary Entertainment

After flirting with the $1 million mark, Manhattan’s median sale price shot up more than 17 percent during the fourth quarter to a record-setting $1.15 million, the highest price in 27 years, according to Douglas Elliman’s latest quarterly report.

The price surge was driven by new development closings, which accounted for nearly 19 percent of sales during the quarter, compared with around 10 percent over the past few years, said the report’s author, Jonathan Miller, of real estate appraisal firm Miller Samuel. “You have more and more projects approaching completion,” he said. “We’re seeing closings accelerate.”

The median price wasn’t the only record high during the fourth quarter.

The average sale price rose by 12 percent to a record $1.9 million, and the average price per foot shot up more than 28 percent to a record $1,645.

In the luxury market, the median sales price increased by a stunning 25 percent to $6 million. The luxury threshold jumped 18.5 percent year-over-year to a record $4.2 million.

Overall, the number of sales during the fourth quarter jumped 9.4 percent year over year to 2,973. Inventory remained relatively stable – at 5,046 – and the number of days on market dropped 21.9 percent year-over-year to 82 days.

Condominium sales – also with condo prices – also outpaced co-ops. Condo sales rose 28.6 percent during the quarter to 1,434, with a median price of $1.7 million (up 21.3 percent). Co-op sales dropped 4 percent to 1,539, with a median price of $749,000 (up 2.6 percent).

In a separate report also released Tuesday, Halstead Property said condos accounted for 50 percent of sales during the fourth quarter, the highest percentage since early 2009.

“We’ve got great new developments and they’re starting to close,” said Halstead CEO Diane Ramirez. “We’ve got tight inventory, so the fact that we have new developments coming is opening up our market for more product.”

Compass, which also released a report, drilled down into various Manhattan neighborhoods and said Downtown’s median price hit a record $1.7 million, while the Upper West Side had a median price of $1.3 million.

In the Corcoran Group report, the brokerage said the number of contracts signed during the fourth quarter dropped 12 percent to 2,961 from 3,373 in 2014’s fourth quarter. Corcoran’s report also found the steepest price gains in large apartments, with the median price for a three-bedroom jumping 24 percent to $3.8 million from $3.1 million a year earlier.

Source: Manhattan’s median price of .15M breaks 27-year record

The flood of foreign cash into New York real estate will continue – and even grow – in 2016, according to a survey by the Association of Foreign Investors in Real Estate.

Sixty-four percent of the group’s members, who together hold about $2 trillion in global real estate, said they plan to increase their investments in the U.S. this year. About 31 percent said they plan to maintain their holdings.

Not one of the survey’s hundred respondents said he or she plans to reduce their foreign real estate investments in 2016, Bloomberg reported.

“This is a very strong response,” Jim Fetgatter, the group’s chief executive, told Bloomberg. Given slowdowns in China, Brazil and Europe, he said, “the U.S., at the moment, really is the safest place for them to go.”

Foreign buyers have spent a total of $87.4 billion on U.S. properties last year, a jump from just $5 billion in 2009, according to Real Capital Analytics.

Manhattan took in $23.5 billion of that, roughly 27 percent. London and Los Angeles were next on the list.

Investors favored U.S. multifamily and industrial properties. Retail was the third-most favored building class, with offices and hotels bringing up the rear. [Bloomberg] – Ariel Stulberg

Source: Even more foreign money coming to U.S. real estate in 2016

The elevator in which Stephen Hewett-Brown was crushed to death on New Year’s eve had a long history of problems, according to building residents.

The building, at 131 Broome Street on the Lower East Side, is co-owned by the city and the Archdiocese of New York’s Catholic Charities. The elevator there had three unresolved DOB violations in 2014, with seven more reported to the agency last year.

The 26-story story structure is part of a Section 8 housing complex adjacent to St. Mary’s Roman Catholic Church Between Grand and Broome streets that also includes 410 Grand Street and 460 Grand Street. Those buildings logged eight DOB violations between them in 2015.

“These are death traps,” Daisy Paez, president of the tenant association at the three buildings, told the New York Post. She was herself trapped in the elevator 410 Grand Street last month.

The elevators went untouched during a $96 million renovation that the landlords undertook in 2012, tenants said.

“The archdiocese has connections, they had tens of millions of dollars to fix this place,” said Paez. “But they never replaced the elevators. Where did the money go?”

Hewett-Brown, a Bronx resident attending a party, was crushed at 131 Broome Street just before midnight. He reportedly pushed another person, building resident Erudi Sanchez, out of the way just before the elevator collapsed on him.

“It’s a terrible way to die — it gives me nightmares,” another tenant, Alice Orlando, told the Post. “I think about it every time I get in the elevator now.”

Another man, Eran Modan, was crushed in an elevator at the Rabsky Group’s Espoir luxury building at 156 Hope Street in Williamsburg back in October. [NYP] – Ariel Stulberg

Source: Elevator that crushed man is a “death trap”: residents

Dropbox, the $10 billion cloud computing company, is moving across the Flatiron District to a much larger space at Two Trees Management’s 50 West 23rd Street.

The firm signed a five-year lease to take 31,000 square feet at the 13-story building, the entire fourth floor. The deal gives Dropbox the option to renew for an extra five years when the lease expires.

The asking rent at the building is $72 per square foot, Crain’s reported. The company is moving from a 12,000-square-foot space at the Hakimian Organization’s 33 West 18th Street.

Two Trees brought the 340,000-square-foot 50 West 23rd Street back in 2010 for $129.5 million. The firm made $25 million in renovations over the last three years, including upgrades to the lobby, a new heating and ventilation system and an 11,000-square-foot roof deck.

The online music platform Soundcloud also makes its home at the building. It took 43,700 square feet there in January, signing a five-year lease.

Two Trees’ Jed Walentas told Crain’s he’s in negotiations with another tenant who is looking to take the remaining 80,000 square feet of space at the building. [Crain’s] – Ariel Stulberg

Source: Dropbox takes 31K sf at Two Trees’ 50 West 23rd Street

Thinking way outside of the box and far into the future, Belgian architect Vincent Callebaut has proposed half-a-mile-tall “oceanscrapers” made of garbage and algae.

Callebaut sees environmentally harmful flotsam within the ocean as the building block for a new kind of structure. These so-called “oceanscrapers,” submerged 250-floor structures, would stretch about 3,000 feet beneath sea level and house 20,000 residents.

Best of all, they would be 3D-printed using algae and the discarded plastic that’s currently stewing in the Earth’s oceans.

The mixed-use aquatic developments would also contain offices, food gardens and laboratories, so residents wouldn’t need to set foot on dry land for anything.

All of this would be contained in a winding structure with a diameter of 1,640 feet and that features walls made out of aragonite, a crystallized calcium carbonate.

Granted, all of this is being proposed via a fictionalized manifesto written from the viewpoint of a future resident of one of these oceanscrapers from the year 2065. But Callebaut even goes into detail about some of the units’ finishes.

“The apartments’ partitions are made of chitin that is also synthesized,” he writes, explaining the material is a “molecule making up the shell of crustaceans such as lobsters.”

And for the flooring? “We took inspiration from the antibacterial denticles of the Galapagos shark’s skin, thus eliminating the need for toxic detergents.” [BuzzBuzzHome] – TRD

Source: Architect proposes ocean habitats made from garbage and algae

The Los Angeles Times has rounded up the 10 most expensive single-family homes sold in the greater Los Angeles area from Jan. 1 to Dec. 31, according to Propertyshark. Check them out after the jump.

$60 million — Malibu

Producer Marcy Carsey sold her Malibu beachfront estate to Interscope Geffen A&M Chairman Jimmy Iovine.

The 2.2-acre compound includes a 2,500-square-foot main house on a bluff, two guest houses, a cottage near the sand, a swimming pool and a tennis court.

$59.36 million — Holmby Hills

The Singleton House, a Holmby Hills estate estate built for Teledyne co-founder Henry Singleton, sold in April.

The 15,520-square-foot home opens to a grand entry with an oval foyer. Formal areas, a wood-paneled study, 10 bedrooms and 12.5 bathrooms are within the Southern Colonial-style house.

$50.5 million — Malibu

An oceanfront compound in Malibu’s Encinal Bluffs area sold in an off-market exchange involving a pair of blind trusts.

While details are scarce, tax records indicate show multiple structures including a four-bedroom main house and two guest cottages. A tennis court and a swimming pool are within grounds of about six acres.

$47.85 million — Bel-Air

Guess Jeans co-founder Maurice Marciano sold his 2.7-acre estate to hotel and casino magnate Steve Wynn for $47,851,500 in August in an off-market deal.

The 19,299-square-foot contemporary-style mansion has eight bedrooms and 13 bathrooms, according to tax records. A large motor court, tiered patios, large expanses of lawn and a swimming pool and spa sit within the hedged and gated grounds.

$46.25 million — Bel-Air

Liongate, the Bel-Air estate once home to singer Kenny Rogers, sold to philanthropists James and Eleanor Randall.

The mansion was rebuilt and expanded in 2013 and has 11 bedrooms and 15 bathrooms in nearly 24,000 square feet of interiors. Among amenities are three living rooms, a 12-seat theater and a master suite spanning 3,000 square feet. A glass elevator leads to a formal ballroom.

$44 million — Malibu

Investment banker and politician Jack Ryan sold a compound to a nondescript limited liability company in March in another off-market sale in Malibu.

The estate includes an unfinished Traditional-style main house and a pool house totaling 12 bedrooms and 12 bathrooms in about 13,000 square feet.

$38 million — Bel-Air

The Mediterranean-style Westside mansion on nearly two acres in Bel-Air was once owned by Georgia Frontiere, the late St. Louis Rams owner responsible for moving the football franchise from the Southland to St. Louis in 1995.

The two-story villa includes a home theater, a library, a bar, an art studio and a wine cellar. A total of 10 bedrooms and 15 bathrooms are within 17,700 square feet of living space.

$36 million — Beverly Hills

The onetime 90210 address of Detroit Pistons owner Tom Gores came to market in September for $43.5 million and ultimately sold for $36 million — the most expensive sale of a publicly listed home in Beverly Hills in 2015, public records show.

The 14,422 square feet of living space features eight bedrooms, 11 bathrooms, inlaid marble and walnut floors, coffered ceilings, custom millwork and seven antique fireplaces..

$34.5 million — Bel-Air

In June, the estate of late radio and television personality Art Linkletter quietly changed hands in an off-market deal. Mortgage documents later revealed the buyer to be Canadian billionaire and Edmonton Oilers owner Daryl Katz.

The nearly five-acre property features views on the surrounding canyons, Century City and downtown L.A.

$32.67 million — Beverly Crest

Following on the heels of brother Maurice’s sale in Beverly Hills, Guess co-founder Armand Marciano sold his Beverly Crest-area estate.

The Mediterranean-style mansion has 10 bedrooms, 10 full bathrooms and 12 powder rooms/bathrooms in nearly 25,000 square feet of living space. Three floors of living, designed for large-scale entertaining, include a professional screening room, a wine cellar, a game room and an elevator. [LAT] — TRD

Source: The most expensive Los Angeles home sales of 2015

From Luxury Listings NYC: If Jose Mourinho, a Portuguese soccer manager and former player, is having a bad year, you certainly wouldn’t know by his vacay destination. With a highly publicized recent firing from Chelsea F.C. as the team’s manager — reportedly the Premier League’s highest-paid manager ever — Mourinho’s getaway may be just what the doctor ordered. [more]

Source: Check out Jose Mourinho’s ,000-a-week Brazilian vacation villa

450 Park Ave. is seeing an influx of leasing activity, as two tenants are relocating to the 33-story, 334,000-square-foot high-end office building, while one existing tenant is nearly doubling in size.

Leasing for 450 Park Ave. has seen a resurgence now that construction of the nearby ultra-luxury condo tower at 432 Park Ave. is coming to an end, according to Crain’s New York Business.

450 Park Ave. has long been considered a premium office building where tenants paid top dollar for space. But construction on the nearby 1,400-foot-tall condo tower at 432 Park Ave. scared prospective tenants away, fearing noise, disruption and unsightly construction site conditions.

But with work on 432 Park Ave. set to be finished by mid-2016 and construction already winding down, 450 Park Ave.’s luster has been restored.

Financial firm Junto Capital Management just signed a 10-year lease for 450 Park Ave.’s entire 25th floor, which is also about 10,000 square feet.Junto is moving from 510 Madison Ave. The asking rent for the space was $145 per square foot.

The Mexico City-headquartered law firm Chevez Ruiz Zamarripa also signed on for space, taking about 3,000 square feet on 450 Park Ave.’s 14th floor in a 10-year deal. The firm is moving to 450 Park Ave. from its previous space in the Seagram Building. Asking rent was $130 per square foot.

Meanwhile, existing tenant BDT Capital is relocating from a portion of 450 Park Ave.’s 23rd floor to the entire 22nd floor, a roughly 10,000-square-foot office that is almost double the size of the financial firm’s previous space. BDT signed a 10-year commitment to the new office. Asking rents were $140 per square foot. [Crain’s] – TRD

Source: 450 Park Ave. sees uptick in leasing activity

From Luxury Listings NYC: Michael Jackson’s Neverland ranch was a peculiar home for a peculiar man. The world-famous pop star who never grew up turned this gigantic property into a Peter Pan amusement park, complete with rides and a petting zoo. [more]

Source: Take a look inside Michael Jackson’s Neverland Ranch

In New York, replacing old windows in one’s apartment isn’t so fast or easy as it is in other parts of the country. Rather than selecting the windows and having a contractor install them, window replacement in the city can be bogged down by red tape and regulations.

In co-op and condominium buildings in the city, there are often specifications to follow and boards to please. In buildings designated as landmarks, a permit from the city’s Landmarks Preservation Commission is needed.

Although these extra steps often result in a more protracted – and more expensive – project than homeowners might expect, they are designed to maintain the aesthetic integrity of the city’s streets, according to the New York Times.

Andre Neethling experienced firsthand the difference new windows can make. When he originally bought his one-bedroom co-op at 5 Tudor City Place in Manhattan 15 years ago, it didn’t take him long to discover a problem.

“It was extremely noisy,” Neethling told the Times, as well as dusty, because so much air was coming through the original casement windows, which gave the space character but also dated from about 1930.

When the building offered shareholders a pre-approved replacement option, he jumped at the opportunity and had Skyline Windows replace his windows in two phases — some in 2009 and the rest in November.

“I’m very pleased,” he said, adding that the new windows “cut down the noise by 99 percent,” and keep the dust out, while maintaining the look of the original window units.

For anyone thinking about replacing the windows in their apartments, “The first thing to look at is whose responsibility the windows are,” Stuart M. Saft, a partner of the law firm Holland & Knight and chairman of the Council of New York Cooperatives and Condominiums, told the Times.

“In some buildings, they’re the responsibility of the co-op or condominium; in others, they’re the responsibility of the apartment owner,” Saft said. “Then there’s a third category of buildings where it’s not clear who’s responsible, and it comes down to the history of what the building has done.”

For those seeking clarity, he advised reading the co-op’s proprietary lease or the condo’s bylaws. In cases where windows are the building’s responsibility, they are typically replaced only as part of a building-wide program, not at an individual’s request.

Regardless of who is legally responsible, Saft said that most boards are happy to let individual shareholders and unit owners replace their windows at their own expense, as long as all rules and standards are followed. [NYT] — TRD

Source: New apartment windows held up by red tape

Portions of Brazilian architect Isay Weinfeld’s Jardim condominium is now reaching street level as foundation work for the Chelsea development are now coming to an end.

The mid-block site at 525 West 27th St. is giving way to a set of two 11-story condo buildings encasing an elevated garden. Centaur Properties and Greyscale Development Group is responsible for the 95,000 square-foot complex. They purchased the site formerly occupied by the Pink Elephant nightclub in 2014 for $45 million.

The $62 million development is Weinfeld’s foray into New York’s design world. Building amenities include a private driveway, on-site parking, landscaped gardens, an indoor skylit swimming pool, fitness center, massage room, children’s playroom, tenants’ storage and a bicycle storage room. Completion is scheduled for sometime in 2017. [6sqft] — TRD

Source: Jardim Condominium rises to street level at High Line

A brick-and-limestone mansion in Washington, D.C. has closed for $18 million, making it the district’s most expensive home sale of 2015, according to the listing agents and real estate records.

The 20,000-square-foot home in the Forest Hills neighborhood has seven bedrooms, nine bathrooms and five half baths, according to the Wall Street Journal. There is also an elevator and a temperature-controlled wine cellar.

The nearly one-acre property is comprised of three lots and includes formal and informal English gardens, a pool, a basketball court and fountains.

The seller was Samuel Lehrman, founder of retail development company Lehrco, according to public records. Mr. Lehrman’s family co-founded the Giant Food supermarket chain.

Listing agent Nancy Itteilag of Long & Foster Real Estate declined to identify the new owner, who paid in cash, but said he was an international buyer. The home was publicly listed for $22 million in April with co-listing agent Kathleen Coumou.

The previous record sale in D.C. was in April 2014 when the Williams-Addison house at 1645 31st St. NW sold for $16.1 million. [WSJ] — TRD

Source: DC mansion sells for record M

From Luxury Listings NYC: Judd Apatow, the director who makes movies about adults who act like children, and his wife actress Leslie Mann have just listed their very grown-up Malibu beach house for $12 million. [more]

Source: Judd Apatow and Leslie Mann’s million Malibu beach house is no “Trainwreck”

In honor of the New Year holiday, we won’t be posting on Friday (but we’ll keep our eyes peeled for breaking news). The Real Deal wishes you and your family a safe and happy holiday, and a joyous 2016! Be sure to check back bright and early on Saturday, for the start of TRD‘s weekend edition.

Source: Happy New Year from The Real Deal!

Airbnb’s listings are concentrated in the U.S.’s biggest hotel markets, exposing hospitality firms in New York – as well as Los Angeles, San Francisco and Miami – to disproportionate levels of competition from the service, according to a new report from Bank of America Merrill Lynch.

Nationwide, Airbnb-rentable units make up roughly 2-4 percent of total hotel room supply. In New York though, that number is 13.9 percent, the second highest of any city in the country after Miami, which had a rate of 15.3 percent.

Another report, produced for the Hotel Association of New York by HVS Global Hospitality Services, and released in October, found a “direct loss” to the city’s hotel industry of $451 million between September 2014 and August 2015.

Those numbers are likely to grow. The new report, which analyzed data compiled by analytics firm AirDNA, said the number of listings offered through the service nationwide grew 150 percent between August 2014 and August 2015.

San Francisco-based Airbnb raised $100 million in a recent fundraising round, with the company valued at $25.5 billion.

National lodging companies that make large proportions of their revenue in the biggest U.S. markets – such as Host Hotels and Resorts, owner of the Marriott Marquis Times Square and five others; and Hersha Hospitality Trust, which owns 17 hotels in the city – are the most threatened by the short-term rental service, according to the BOAMR report.

One of the analysis’ more surprising findings was that, nationwide, the average Airbnb rental costs significantly more than the average hotel room. Rooms booked through the service cost around $196 dollars per night on average, while hotels charged about $122 dollars a room, a difference of about 60 percent.

New York, though, was one of just three exceptions to that trend. Here, the average Airbnb goes for about $204 a night, according to the report, while the average hotel room goes for about $233 dollars per night, about 12 percent more. Seattle and Oahu Island, HI were the only other markets where hotels cost more on average.

Earlier this month, the city’s Independent Budget Office estimated that $546 million in hotel occupancy tax would be collected in Fiscal Year 2016, a drop of $14 million from the prior year.

Back in August, a representative of the Hotel Association of New York said the group was attempting to put together a class action lawsuit against Airbnb, though to date no suit appears to have been filed.

Last year, The Real Deal queried seven hotel industry players about the company’s impact on their businesses.

Source: Airbnb vs. NYC hotels: Here’s the breakdown

The Real Estate Board of New York is having none of the backlash toward Midtown’s new generation of supertall skyscrapers.

From CIM Group’s 432 Park Avenue to Gary Barnett’s One57, the neighborhood’s crop of “tall, slender and mostly residential towers positively contributes to our city architecturally, economically and environmentally,” REBNY president John Banks said this week.

Banks’ comments came after the Municipal Arts Society of New York released a report earlier this week calling for changes to the city’s building codes — with MAS executive vice president Mary Rowe criticizing developers for “only playing by the rules provided to them by the city government.”

Such codes “in some cases are more than 50 years old and woefully outmatched by the realities of city-building today,” Rowe added, with MAS calling for strictly guidelines on high-rise structures in Manhattan and a temporary moratorium on towers over 600 feet that haven’t gone through public review, according to Real Estate Weekly.

But Banks has shot back, describing the new additions to the Manhattan skyline as signaling “a city ascendant.”

“They symbolize an urban environment that is vibrant and exciting,” he said. “We are confident that over time, the latest generation of towers – like their predecessors – will become beloved members of our skyline.” [REW] – Rey Mashayekhi

Source: REBNY strikes back against supertall criticism

Rabsky Group is closing in on the purchase of an East Williamsburg warehouse for about $48 million, with plans to reposition it as a office-and-retail property spanning as much as 285,000 square feet, sources said.

The one-story, 146,000-square-foot property at 101 Varick Avenue, also known as 471-485 Johnson Avenue, sits on a 3.4-acre site. M. Fried, a manufacturer of display cases and other retail fixtures, has occupied and owned the property since 1991.

Rabsky, one of the most active developers in Brooklyn, is considering converting the existing building on Varick Avenue into a large office building with several tenants, as well as a ground-floor retail component. The building is now used as a mix of industrial, storage and office space. Its ceilings are as high as 22 feet.

In the area, asking rents average $40 to $50 per square foot for office space and $35 to 45 per square foot for retail space.

The deal is expected to close in February for roughly $170 per buildable square foot, shortly after M. Fried vacates the property. Pinnacle Realty’s David Junik and Abraham Lowy, who brokered the deal, declined to comment.

M. Fried is in the process of relocating its headquarters to Red Hook, where it recently signed a lease for about 50,000 square feet at 110 Beard Street, sources said. A spokesperson for M. Fried declined to comment on the company’s new location.

Investors are making moves to usher in a new office submarket on the East Williamsburg-Bushwick border. The area is seeing widespread development, including the Lincoln Property Company’s office-and-retail project at 455 Jefferson Street and the Normandy Real Estate Partners-led office-and-retail project at 333 Johnson Avenue.

The notoriously private Williamsburg-based Rabsky, led by Simon Dushinsky and Isaac Rabinowitz, has been stepping outside its comfort zone in terms of neighborhood and project type. Last month, the firm bought the site of a now-demolished Downtown Brooklyn office building from Forest City Enterprises for $158 million. Rabsky is also the primary developer of the Rheingold Brewery site in Bushwick — and recently sold its stake in Heritage Equity Partners’ office project at 25 Kent Avenue in North Williamsburg.

Source: Rabsky plans office conversion at 285K sf Williamsburg site

The New York real estate community lost several influential brokers, developers and architects this year. From those who shaped the city’s neighborhoods to those who brokered complex commercial transactions, here are some of those we said goodbye to in 2015.

Jay Furman

Developer Jay Furman, whose RD Management-owned buildings throughout the U.S. and Puerto Rico, died in January. In 1995, Furman co-founded New York University’s Furman Center for the Real Estate and Urban Policy, a joint center of the NYU School of Law and the Robert F. Wagner Graduate School of Public Service.

“Jay was always the Furman Center’s toughest questioner — his curiosity, incredible intelligence, breadth of knowledge, and enthusiastic embrace of any complexity made him the best thinker in the room on almost any issue,” Vicki Been, Department of Housing Preservation and Development commissioner and former Furman Center head, said at the time.

A. James Clark

Billionaire “King of Concrete” A. James Clark, whose firm built the American Ballet Theater at Lincoln College and other iconic buildings, died in March at age 87.

The Virginia native started his career in construction in 1950 and took business classes on the side. His wealth was estimated at about $1.4 billion by Forbes. His firm, Clark Enterprises, built Oriole Park at Camden Yards in Baltimore, the Juilliard School in New York and World Bank Headquarters in Washington, D.C.

Michael Graves

Michael Graves, one of the most notable American architects of the 20th century who made a mark on modernism, died at age 80 in March.

Perhaps best known for designing the teakettle and pepper mill, the Indianapolis native designed more than 350 buildings around the world, including the Impala Building, Averne East, and 425 Fifth Avenue in New York City.

Graves began teaching at Princeton University in 1962 and founded the firm Michael Graves & Associates in Princeton, N.J., in 1964. In the 1970s, Graves was associated with the New York Five, a group of architects who shaped modernism.  In the 1980s, Graves proposed an expansion of the Whitney Museum of American Art, which did not happen.

Greg Young

Real estate educator Greg Young – who founded the agent training school Broker Heaven – died in April. Young, 54, began his career in real estate in 1982 as a broker and worked at J.I. Sopher & Co. and then the Marketing Directors.

He was hired as director of sales at Citi Habitats in 2000, where he earned the nickname “G Money” for helping rookie agents learn to make money. He launched Broker Heaven in 2010.

Patricia Goldstein

Patricia Goldstein, a vice president and the head of commercial real estate for Emigrant Bank, died in May after being injured in a bicycle accident in Florida.

Goldstein, 69, began her career at Citigroup in 1966 and joined Brookfield predecessor Olympia & York in 1983. The CRE pioneer later rejoined Citigroup and cofounded Citadel Realty Group, and worked for Milstein Brothers Realty Investors, where she spearheaded a new venture for acquisitions and development.

Kirk Kerkorian

Billionaire real estate investor and former MGM mogul Kirk Kerkorian died at age 98 in June. The son of Armenian immigrant parents, Kerkorian changed the face of Las Vegas, where he built the city’s largest hotel on three separate occasions, including the MGM Grand in 1993.

His net worth was an estimated $16 billion in 2008, according to Forbes, though the number later fell to $4 billion. As a young man, Kerkorian was an amateur boxer, daredevil pilot and high-stakes poker player before turning to real estate. In 1986, he sold MGM to Ted Turner for $1.5 billion, buying back the company – but not the film library – for only $300 million a year later. In 2000, Kerkorian paid $4.4 billion cash for Steve Wynn’s Mirage Resorts.

Julien Studley

Legendary broker Julien Studley, founder of the eponymous commercial brokerage, died at age 88 in October. “This is a guy who transformed the business in many ways into what it is today,” Bruce Mosler, chairman of global brokerage at Cushman & Wakefield, said at the time.

Born in Brussels, Belgium, Studley and his family fled to France and then Cuba in 1940 to escape the advancing Germany army. Arriving in New York at age 16, Studley worked at a real estate firm and in the diamond business at night before founding Julien J. Studley Inc. in 1954. Studley sold the company in 2002, and the brokerage eventually merged with London-based Savills in 2014.

Douglas Shorenstein 

Douglas Shorenstein, whose San Francisco-based real estate firm is heavily invested in New York City, died in November 2015 after battling cancer.

Shorenstein, who joined his father in the family real estate business in 1983, rose to be chairman and CEO of Shorenstein Properties in 1995. Splitting his time between San Francisco and New York, Shorenstein oversaw a nationwide portfolio of more than 24.8 million square feet. In New York, Shorenstein Properties was one of the two sellers of the 2.3 million-square-foot Starrett-Lehigh Building in West Chelsea for $920 million in 2011. Shorenstein also owns 1407 Broadway, 477 Madison Avenue and 850 Third Avenue, which is on the market.

John Zuccotti

John Zuccotti, a Brookfield executive and former deputy mayor who is perhaps best known for shaping Lower Manhattan after Sept. 11, died in November.

A Manhattan native, Zuccotti studied at Princeton University and Yale Law School, and he was appointed chairman of the City Planning Commission in 1973. He later became first deputy mayor under Abraham Beame.

In 1990, Zuccotti joined Brookfield’s predecessor, Olympia & York. It was from his perch at Brookfield that he helped to redevelop Lower Manhattan, which now has a park bearing his name. Most recently, he served as the chair of global operations for Brookfield Asset Management.

Glen Nelson 

Glen Nelson, founder and CEO of commercial and residential development firm, died in December in a car crash on Long Island.

Nelson, 48, was co-founder of Matrix Realty Group, a real estate investment and management company he helped to start in 1993 that has holdings throughout the U.S. Properties include suburban office parks in Connecticut, Alabama and Long Island.

Source: In memoriam: Portraits of real estate players who died in 2015

Being in charge of a large Chinese company or investment firm might be one of the most dangerous jobs out there at the moment.

On Wednesday, Chang Xiaobing, CEO of the state-owned telecoms giant China Telecom, resigned after becoming the latest Chinese executive to go missing amid a government-led nationwide crackdown on corruption.

Multiple high-profile executives have gone missing in recent months, in the wake of China’s stock market crash. As many as 36 companies reported executives missing from January to September, according to a Bloomberg report.

The Beijing-based independent magazine Caijing reported on Sunday that Xiaobing was “lost” and uncontactable via mobile phone. The report said he had been “taken away because of serious disciplinary review,” and it featured a picture claiming to show his office had been sealed.

What is clear is his fate isn’t unique. Here’s a (non-exhaustive) list of some of the highest-profile and most important execs who have gone missing:

• In December, 48-year-old Guo Guangchang, known as “China’s Warren Buffett,” who is the head of China’s Fosun Group, went missing. Guo is worth an estimated $6.9 billion (£4.5 billion). His investment group, Fosun, owns Club Med and Cirque du Soleil among others. He reappeared in the U.S. after about a week spent out of contact.
• Yim Fung, chairman and CEO of the Hong Kong-listed Guotai Junan International Holdings, went missing in November. Guotai shares tumbled 12% when his disappearance was announced.
• Two senior executives, Chen Jun and Yan Jianlin, of China’s Citic Securities — the firm at the centre of a government investigation into China’s stock-market rout — disappeared in November. Their involvement in the investigation brings to at least 10 the number of Citic Securities executives implicated in the investigations to determine the causes of the stock plunge that wiped out $5 trillion of market value.
• Zhang Yun, president of the Agricultural Bank of China, one of China’s four massive, state-owned banks, was detained in October as part of a corruption investigation. The bank is ranked as the world’s third-largest bank with $2.7 trillion in assets, according to SNL Financial.
• Poon Ho Man, CEO of China Aircraft Leasing Group, resigned by letter while on holiday in June and hasn’t been in contact since.
• Xu Jun, chairman of the department-store operator Ningbo Zhongbai, disappeared and couldn’t answer questions over his personal connection with the hedge fund manager Xu Xiang, who is under investigation for suspected insider trading, according to the official Xinhua news agency.

Source: The list of missing Chinese financial execs keeps getting longer

It’s about time residents along Billionaires’ Row start shelling out some serious cash.

In a New York Times editorial, Max Frankel, the newspaper’s former executive editor, argued that residents with choice views of Central Park or the waterfront should pay anywhere from $10 to $25 a month as a “user fee” for their access to the city’s most attractive locations.  The new tax could be dedicated to the city’s parks, streets and affordable housing. The suggestion comes as a slew of new tall and slender towers rise above Central Park, but also as the future strength of the high-end market remains uncertain.

Jonathan Miller, of Miller Samuel, told Bloomberg that the residents of the lofty towers along Billionaires’ Row are already paying exorbitant property taxes.He also pointed out that the race to build taller buildings in the city, dating back roughly 100 years, has long left older buildings in the shadow of new towers.

“One of the axioms of New York real estate is no views are guaranteed unless you are located on Central Park,” he said. “The whole argument is pretty ridiculous.” [Bloomberg] — Kathryn Brenzel

Source: Should NYC tax the views on Billionaires’ Row?: VIDEO

While rent-stabilized apartments will see no rent increases this year, another class of regulated units, those under rent control, will see rates climb as much as 9.6 percent over the next two years.

Owners of rent-controlled units – there are about 27,000 citywide, about 2 percent of rental stock – aren’t allowed to charge a rate higher than the Maximum Base Rent established by the state’s Division of Housing and Community Renewal.

That rate is recalculated every two years to adjust for changes in landlords’ costs, the New York Times reported.

Rent-stabilized units, in contrast, are regulated by the city’s Rent Guidelines Board, whose decisions can incorporate considerations such as affordability and tenants’ income. There are more than a million such units in the city. The board decided earlier this year that stabilized rents in the city wouldn’t increase at all in 2016 for one-year leases, and would increase by 2 percent for two-year leases.

Landlord groups defended the rent-controlled unit increase.

“What this illustrates is that when you stick to a formula that reflects the costs to owners, instead of playing politics, you come up with an increase,” the Rent Stabilization Association’s Jack Freund told the Times.

Tenants and their advocates, though decried it.

“Each and every day, my staff and I sit with seniors — 70-, 80-, 90-year-olds — who cannot afford to pay their rent,” Assembly member Linda Rosenthal told the Times. [NYT] – Ariel Stulberg

Source: Rent-controlled tenants to see 9.6% hike over next two years

From the December issue’s “In their words” feature, a roundup of the funniest and most insightful comments on real estate:

To read others, click here for the full feature.

Source: Richard Mack on his ideal Brooklyn property

Renowned 98-year-old architect I.M. Pei was allegedly attacked earlier this month by a home health aide.

The aide, Eter Nikolaishvili, grabbed Pei’s arm at his Sutton Place home after he threatened to call the cops on her for “doing something bad,” according to the New York Police Department.

The architect was rushed to a hospital at 4 a.m. and treated for “bleeding lacerations and bruising” on his forearm.

Pei called police, who investigated for weeks before arresting the aide on Tuesday. Nikolaishvili told another aide she’d grabbed Pei to prevent him from falling. She was arraigned the same day and released without bail, the New York Post reported.

Pei’s firm, Pei Partnership Architects, has designed massive, high-style projects all over the world, including New York projects such as the Jacob K. Javits Convention Center and Six Sigma’s condo building at 435 West 19th Street. [NYP] – Ariel Stulberg

Source: I.M. Pei allegedly assaulted at Sutton Place townhouse

From the December issue’s “In their words” feature, a roundup of the funniest and most insightful comments on real estate:

To read others, click here for the full feature.

Source: Miki Naftali on the end of soaring prices

Dumbo’s days as a trendsetting arts district may be behind it, but its reign as Brooklyn’s most expensive neighborhood is just beginning.

A total of 71 condominiums, co-ops and townhouses sold in the neighborhood in 2015, with 31 of those selling for over $1.5 million, according to a new report from YARDI, a real estate software firm.

The most expensive homes this year were all on Water Street, and sold for between $4.1 million and $4.8 million. The median sales price in the submarket was about $1.4 million, a record, DNAinfo reported.

The next most expensive Brooklyn neighborhoods were Vinegar Hill and Carroll Gardens, both with median prices of $1.3 million, and Cobble Hill, with a median of $1.2 million.

The median price for Brooklyn as a whole hit a record as well, climbing to about $560,000 in 2015, up from $400,000 a decade ago.

Dumbo ranked only 13th most expensive neighborhood in the city as a whole. [DNAinfo] – Ariel Stulberg

 

Source: Dumbo was Brooklyn’s priciest neighborhood for sales in 2015

Dreams of Manhattan condominiums dominated 2015’s top 10 development site deals. While Gary Barnett’s Extell Development – which is known for this sort of thing – appears on the list as both a buyer and a seller, the crop of developers overall is best characterized by its diversity. Three Chinese firms appear, including locally-based Kuafu Properties. Global firms like GID Development Group and the Carlyle Group showed up next to local fixtures like Ziel Feldman’s HFZ Capital and Joseph Sitt’s Thor Equities. And while the outer boroughs failed to place, Manhattan – at least the expensive parts – was fully covered, from the far West Side, through Midtown, to the Upper East Side, and all the way Downtown.

1. 518 West 18th Street, $870 million

Buyer: HFZ Capital Group

Seller: Edison Properties

Ziel Feldman’s firm closed on this 76,000-square-foot High Line-adjacent site, also known as 76 Eleventh Avenue, back in May in one of the most expensive transactions in the city’s history, valuing the lot at over $1,100 per square foot. Back in June, the developer told The Real Deal the buy was “worth every penny.” Feldman is planning a two-building, 850,000-square-foot luxury condominium project at the site.

2. 40 Riverside Boulevard, $410.8 million

Buyer: GID Development Group

Seller: Extell Development, Carlyle Group

This massive – and massively expensive – 45,000-square-foot site was just one of five that comprised Extell Development and the Carlyle Group’s Riverside Center project on the Far West Side. James Linsley’s GID Development Group is planning a 37-story, 877,000-square-foot mixed-use tower at the site. It’s slated to include 595 residential units along with 18,500 square feet of commercial space, which will house a bar, an amphitheater and a music lounge.

3. 80 South Street and 163 Front Street, $390 million

Buyer: China Oceanwide Holdings

Seller: Howard Hughes Corp.

Billionaire Lu Zhiqiang’s firm bought the two South Street Seaport sites – only about 15,000 square feet between them – with plans to build an 820,000-square-foot tower, with 440,000 square feet dedicated to residential space and 380,000 square feet of commercial. Howard Hughes Corporation, which is leading the Seaport’s redevelopment, bought the sites in two deals last year, totaling about $124 million.

4. 1865 Broadway, $300 million

Buyer: AvalonBay Communities

Seller: The American Bible Society

AvalonBay Communities bought the American Bible Society’s longtime headquarters with plans to develop a 32-story, 343,000-square-foot residential and retail project on the site. The firm plans a mix of rental and condominium units, with 131 of the former and 26 of the latter planned. Retail at the building will occupy about 70,000 square feet.

5. 200-204 Amsterdam Avenue, $275 million

Buyer: SJP Properties, Mitsui Fudosan America

Seller: American Continental Properties

SJP Properties and Mitsui Fudosan America paid nearly $700 per square foot for this Upper West Side site, between West 69th and West 70th streets, with plans to build the neighborhood’s tallest building. That project, a 55-story, nearly 400,000-square-foot condominium tower, will replace the church building that currently occupies the site. The new tower’s residents will have a protected view of Central Park.

6. ​520 ​Fifth​ Ave​nue,​ $2​70 million

Buyer: Ceruzzi Properties, SMI USA

Seller: Thor Equities

Fairfield, Conn.-based investor Ceruzzi Properties and Shanghai-based SMI USA bought this 11,000-square-foot Midtown site aiming to follow through on Thor Equities’ plans for it: a 71-story, roughly 354,000-square-foot residential, hotel and retail tower. The price paid adds up to about $763 per buildable square foot. Two prewar buildings at the site have already been demolished.

7. 20 Riverside Drive and two adjacent parcels, $265 million

Buyer: GID Development Group

Seller: Extell Development, Carlyle Group

Earlier this month, GID Development Group followed up its previous Riverside Center purchase (see above) with another buy, this time for three parcels between West End and 12th avenues. The developer’s plans for the site aren’t yet known, but the three properties together have a combined 1.1 million buildable square feet, according to public records.

8. 143-161 East 60th Street, $254 million

Buyer: Kuafu Properties

Seller: World Wide Group

New York-based Chinese developer Kuafu Properties bought six contiguous Upper East Side parcels, closing in October. Together, the lots total about 20,000 square feet and offer about 283,000 buildable square feet above grade, for a per-square-foot price of about $1,060. Kuafu’s exact plans for the site are unknown, but sources told TRD the firm is contemplating a luxury condominium building with about 60,000 square feet of retail at the base.

9. 1710 Broadway, $247 million

Buyer: Extell Development

Seller: C&K Properties

Extell bought a 39 percent stake in C&K Properties’ Midtown, closing earlier this month. The deal includes air rights across a total of six lots, with the possibility of some air rights being transferred to another Extell project, at 842-846 Seventh Avenue. The site offers a total of 370,000 square feet of buildable space. The two firms will team up to build a planned 60-story condominium and hotel project there.

10. 525-529 East 73rd Street, $226 million

Buyer: Memorial Sloan-Kettering Cancer Center, Hunter College

Seller: New York City Economic Development Corporation

The partners – listed as Memorial Hospital for Cancer and Allied Diseases – are planning two buildings at the Upper East East Side site: a 500,000-square-foot cancer treatment facility next to a 300,000-square-foot nursing school. The price paid to the city agency, while high, amounted to just $283 per square foot.

Source: The top 10 biggest development site deals of 2015

Real estate investment trusts had a bit of a rough year despite the surge in the wider market, but a change in policy at the S&P 500 and MSCI are likely to provide a tailwind for the firms in 2016.

The two stock indices are planning to separate real estate securities from those of banks and insurance companies, creating a new industry sector.

The S&P 500 currently has 10 sectors. Real estate stocks – currently 25 companies – make up about 2.6 percent of market value, making it the second smallest sector after telecommunications as of Nov. 30, the Wall Street Journal reported.

The move is likely to boost the price of those stocks, experts said.

“It increases the demand for real-estate securities,” Gil Menna, a partner at investment firm Goodwin Procter, told the Journal.

As of late September, REIT stocks were trading at an almost 15 percent discount to what investors would pay for the properties that compose them, the largest gap in five years, according to Green Street Advisors.

Nonetheless, firms like Forest City Enterprises and crowdfunding pioneer Fundrise have moved forward with major new REIT offerings in the last few months. [WSJ] – Ariel Stulberg

Source: S&P 500 will break real estate out as its own sector

Peter Straub’s novels may be terrifying, but his Upper West Side home, which just sold for $7 million, is anything but.

The acclaimed horror author has lived in the five-story, 4,800-square-foot townhouse, at 53 West 85th Street, for 30 years. He put it on the market for the first time back in April, asking $8.2 million.

It features an asymmetrical facade, a pitched gable roof, bay windows, wrought iron railings, and a stained glass skylight, 6sqft reported.

Dana Luttway, an experienced home flipper, was the buyer, according to public records.

Straub’s daughter Emma, also a writer, recently listed her own townhouse, at 182 Rutland Road in Prospect-Lefferts Garden, for $1.85 million. [6sqft] – Ariel Stulberg

Source: Author Peter Straub sells UWS townhouse for M

Steiner Studios’ Doug Steiner, who recently filed plans for a massive film production complex at the Brooklyn Navy Yard, just got a $130 million loan for a different project, a ground-up condominium development in the East Village.

The developer received the cash to fund construction at his 82-unit, 165,000-square-foot residential building at 438 East 12th Street, between Avenue A and First Avenue, the New York Observer reported.

Steiner bought the site for $41 million in 2012, from the Mary Help of Christians church.

He received another loan in February – $390 million from Bank of America – for The Hub, a planned 52-story, 720-unit rental tower in Downtown Brooklyn, which will be 20 percent affordable.

Earlier this month, The Real Deal reported that Steiner filed plans for a 179,000-square-foot studio complex at the Brooklyn Navy Yard. The three-story building will house six soundstages. [NYO] – Ariel Stulberg

Source: Doug Steiner gets 0M loan for East Village condo project

UPDATED, Dec. 29, 10:25 a.m.: What do the 10 biggest New York City investment sales of 2015 have in common? All the deals, whether they were for mega complexes, standalone trophy towers or a stake in a multi-building package, crossed the billion-dollar threshold.

The numbers don’t lie: The year was unusually strong. All told, commercial real estate investment activity in the city is on pace to hit a record $70 billion in deal volume, a 12.5 percent jump from the previous record during the 2007 peak, according to CBRE and Cushman & Wakefield data.

Jim Costello, senior vice president at Real Capital Analytics, said industry players have responded to the market surge with a mix of excitement and fear — as opposed to 2007, when there was very little fear.

“This is certainly a time to be cautious,” Costello said. “The forces driving the market are a lot different now. Single-asset classes are doing much more of the heavy lifting than portfolio plays, and global capital is flooding in.”

The Real Deal looked at the year’s priciest building deals, which together totaled roughly $22 billion.

Familiar faces abounded, from the Blackstone Group to Scott Rechler’s RXR Realty to the broker tag team of Eastdil Secured’s Doug Harmon and Adam Spies. Foreign investors, such as Ivanhoe Cambridge and Anbang Insurance Group, also made a big splash.

Note: The list is based on data from Real Capital Analytics and CoStar Group. The ranking is based on all closed 2015 sales and all known in-contract sales as of press time. It includes building portfolios and partial interests, but excludes development sites and development projects.

1. Stuyvesant Town-Peter Cooper Village, $5.3 billion
Buyer: Blackstone Group and Ivanhoe Cambridge
Seller: CWCapital (on behalf of lenders)
Brokerage: Eastdil Secured
On a list often dominated by the sale of Class A office skyscrapers, an apartment complex – the biggest in Manhattan, in fact – topped them all. The city, intent on preserving the 11,200-unit complex’s affordable units, struck a deal to maintain 5,000 units as affordable for 20 years. In exchange, private equity giant Blackstone and Canadian investment firm Ivanhoe Cambridge received $225 million in benefits and the administration’s blessing for the deal. The complex doubled as the biggest multifamily portfolio of 2015, by a long shot. (The second biggest portfolio was the 24-building, $690 million Caiola package, also acquired by Blackstone and a partner.)

2. 11 Madison Avenue, $2.29 billion
Buyer: SL Green Realty
Seller: Sapir Organization and CIM Group
Brokerage: CBRE

Although Stuy Town surpassed it in December as the biggest deal of the year, 11 Madison Avenue stands firm as the largest single-building transaction in New York City’s history. SL Green closed in August on the $2.29 billion purchase of the 2.3 million-square-foot, 29-story Art Deco skyscraper in the Flatiron District. The purchase price excludes $300 million in lease-stipulated improvements. The sellers, the Sapir Organization and minority partner CIM Group, pocketed a hefty sum. Sapir paid $675 million in 2003 and proceeded to reposition the property as a TAMI-tenant destination, with Sony and Yelp signing in recent years. Yes, Boston Properties paid more for the GM Building in 2008 — $2.8 billion — but that was part of a four-building package.

3. 1095 Sixth Avenue (3 Bryant Park), $2.2 billion
Buyer: Ivanhoe Cambridge and Callahan Capital Properties
Seller: Blackstone Group
Brokerage: Eastdil Secured
When this 1.2 million-square-foot office tower overlooking Bryant Park entered contract in late 2014, it was technically the priciest building sale of that year. Now that it has closed, it still charts pretty high in what was a banner year for the investment sales space. Ivanhoe Cambridge, in partnership with Chicago-based private equity firm Callahan Capital Properties, bought the property from its future Stuy Town partner, Blackstone. Blackstone took ownership of the 1.2 million-square-foot building as part of the $39 billion purchase of Sam Zell’s Equity Office Properties Trust in 2007. MetLife occupies more than 400,000 square feet there, with a Whole Foods coming to the ground floor sometime in 2016.

4. RXR office portfolio (50 percent stake), $2 billion
Buyer: Blackstone Group
Seller: RXR Realty
Brokerage: Eastdil Secured
Through its core-plus real estate fund, Blackstone bought a partial stake in a six-building package owned by RXR Realty. The portfolio, which was valued at $4 billion after the deal, includes properties such as 620 Sixth Avenue, 1330 Sixth Avenue, 340 Madison Avenue and the Starrett-Lehigh Building at 601 West 26th Street. RXR’s plan was to return most of its investors’ equity and to continue managing the properties. Blackstone was looking for assets that fell into a middle ground between risky deals and core investments. The deal closed in several installments throughout the year, sources said.

5. Waldorf Astoria, $1.95 billion
Buyer: Anbang Insurance Group
Seller: Hilton Worldwide Holdings
Brokerage: Eastdil Secured
Perhaps the highest-profile Chinese investment in New York was Anbang’s record-setting purchase of the iconic property on Park Avenue, the priciest-ever purchase of a U.S. hotel. Sources called it a “chairman to chairman” deal, in which Anbang’s Wu Xiaohui flew back and forth to New York over a two-week period to negotiate directly with Jonathan Gray, head of real estate for Blackstone, which holds a majority stake in Hilton Worldwide Holdings. The Waldorf Astoria was the biggest hotel in the world when it opened in 1931.

6. 787 Seventh Avenue, $1.9 billion (in-contract, pending)
Buyer: CalPERS
Seller: AXA Financial
Brokerage: Eastdil Secured
At the tail end of the year, AXA Financial struck a deal to sell a trophy two-building package for a combined $3.6 billion. The Midtown office towers sit side by side on a four-acre site between West 51st and 52nd streets. The larger of the two deals is for 787 Seventh Avenue, which CalPERS, a California pension fund, is expected to close on early next year for $1.9 billion. The 51-story, 1.7 million-square-foot property is almost fully occupied.

7. 730 Fifth Avenue (Crown Building), $1.78 billion
Buyer: Wharton Properties and General Growth Properties
Seller: Winter Organization and Spitzer Enterprises
Brokerage: Eastdil Secured

In the span of a year, the 390,000-square-foot Crown Building was associated with at least two price records – one for the city, one for the world. In April, the sale itself, to Jeff Sutton’s Wharton Properties and Sandeep Mathrani’s General Growth Properties, set a global record for highest price per square foot paid, at $4,490. Then, in November, luxury Italian brand Bulgari set a new retail record in the city with a 15-year lease exceeding $5,000 a foot in rent. After Sutton and GGP’s deal entered contract, Michael Shvo’s SHVO and Russian developer Vladislav Doronin’s Capital Group agreed to buy the 290,000-square-foot non-retail portion — floors four through 24 — of the property for $500 million. The 29-story office-and-retail property at 57th Street last sold in 1991, when Winter Organization and Spitzer Enterprises bought it from the government of the Philippines for $93.6 million.

8. 1285 Sixth Avenue, $1.7 billion (in-contract, pending)
Buyer: RXR Realty
Seller: AXA Financial and JPMorgan Chase
Brokerage: Eastdil Secured
The second building in the two-pronged AXA Financial sale is 1285 Sixth Avenue. Scott Rechler’s RXR is expected to close by early next year on the 39-story, 1.7 million-square-foot building. Swiss Bank UBS AG anchors the fully-occupied building. AXA, formerly known as the Equitable Companies, bought its 50 percent stake from AXA Equitable Life Insurance Company for $587.5 million in 2012, records show.

9. Trinity Church office portfolio (44 percent stake), $1.56 billion (in-contract, pending)
Buyer: Norges Bank
Seller: Trinity Real Estate
Brokerage: CBRE
Norges Bank Investment Management, which manages investments for Norway’s sovereign wealth fund, signed a contract in November for a big piece of Trinity Church’s extensive office holdings in Hudson Square. The 11 buildings included in the deal, now valued together at $3.6 billion, span 5 million square feet and are 94 percent leased. The package’s crown jewel is One Hudson Square, a 1.2 million-square-foot property at 75 Varick Street. Vornado Realty Trust, SL Green Realty and Brookfield Property Partners were among the bidders.

10. 230 Park Avenue (Helmsley Building), $1.2 billion
Buyer: RXR Realty and Blackstone Group
Seller: Invesco, Monday Properties and South Korea’s National Pension Service
Brokerage: CBRE
RXR made a big splash in May with the announcement that it was buying the iconic Helmsley Building. TRD later revealed that it was partnering with Blackstone on the buy. The 34-story, 1.4 million-square-foot tower, known for its cupola, sits directly north of Grand Central Terminal.

Source: The 10 biggest investment sales of 2015

Leonard Litwin’s Glenwood Management, at the center of both Sheldon Silver and Dean Skelos’ corruption trials, also doled out hundreds of thousands of dollars to members of the state Senate Ethics Committee.

The developer, the largest political donor in the state of New York in 2014, has contributed $227,000 in total to members of the committee since 2012.

Sen. Phil Boyle (R-LI) was the top recipient of Glenwood’s generosity, taking in $105,000. Queens Democrats Sen. Tony Avella and Sen. Michael Gianaris took in $40,000 and $25,000, respectively.

Other senators — Hugh Farley (R-Schenectady), Terrence Murphy (R-West­ches­ter) and Thomas Croci (R-LI) — also received contributions, according to the New York Post.

Gov. Andrew Cuomo has received about $1.2 million from the company over his career. Mayor Bill de Blasio took in $20,200 from Glenwood as well, though he’s pledged to return some of the money.

Of the cash that went to Ethics Committee members, a small part was contributed not by the firm itself, but by LLCs connected with it, a practice that’s recently come under fire.

“If you serve in a position of trust for an ethics watchdog or committee, then you have to lead by example,” John Kaehny, executive director of Reinvent Albany, told the Post. “The ethical and right thing to do would be to return the dirty LLC money.”

In their trials over the past months, both former Senate majority leader Skelos and former Assembly Speaker Silver gave political favors to Glenwood in exchange for contributions and no-show jobs. Both politicians were found guilty of corruption. [NYP] – Ariel Stulberg

Source: State ethics commissioners took 7K in contributions from Glenwood Management

It may not be the Paris Agreement on climate change, but some of the city’s top hotels are promising to do their part to reduce greenhouse gas emissions.

Sixteen of New York’s top lodges — including the Waldorf Astoria New York, the Lotte New York Palace, the Grand Hyatt New York and others — agreed to reduce their emissions by 30 percent or more over the next decade.

The hotels’ pledge is part of the de Blasio administration’s NYC Carbon Challenge, which aims to reduce greenhouse gas emissions citywide by 80 percent by 2050.

Their promise translates to a reduction of roughly 32,000 metric tons on carbon, and about $25 million in energy cost savings, the Associated Press reported.

“As the nation’s number one big city destination, the hotels are showing the rest of the world that our city is committed to reducing our carbon emissions and fighting climate change,” Hervé Houdré, general manager of the InterContinental New York Barclay, told the AP. [AP] – Ariel Stulberg

Source: City’s top hotels promise to cut emissions

Last week, The Real Deal compiled a list of the 10 most expensive residential sales of the year, based on data from StreetEasy and the city’s Department of Finance. For a run down of the units, visit The Real Deal‘s YouTube page, or watch the video above.

Source: The top 10 most expensive resi sales of 2015: VIDEO

For some of the partners in Staten Island’s New York Wheel project, the wheels are starting to fall off.

Eric Kaufman, a minority shareholder in the ambitious observation wheel project, claims that the project has no coherent business plan, ineffective management and is experiencing unexplained cost overruns, according to allegations contained in an email to fellow investors Andrew Ratner and Jay Anderson of the Feil Organization.

Kaufman, who made the claims in response to a 2014 capital call by the wheel’s board of directors, told Ratner and Anderson he would not pony up additional funds “without evidence of a viable business plan,” court papers show.

The allegations are just the latest in an escalating legal battle between Kaufman and Meir Laufer — the original developers of the wheel — and a consortium of larger investors who control the project’s board of directors.

New York Wheel board president Richard Marin called allegations of a lack of a viable business plan “silly.”

“If there was no coherent business plan, do you believe major financial institutions like the Highbridge Strategies hedge fund would have put $195 million of senior debt in?,” he told The Real Deal. “How on earth did we close on $476 million in funding without a coherent business plan? We’ve gotten all the major authorities to give us the thumbs up. To me, that speaks for itself.”

The large investors, which include the Feil Organization, BLDG Management’s Lloyd Goldman and jeans mogul Joseph Nakash, operating under the entity Wheel Estate LLC, filed suit against Kaufman and Laufer last July, seeking a judgment in reducing their respective stakes in the project because Kaufman and Laufer hadn’t met capital requirements.

Laufer, who chairs the wheel’s board of directors, countered in November, saying that he’d been sidelined from his own project and discriminated against by the other investors, who allegedly say his Hasidic image is bad for business.

Now, Kaufman is fighting back, too.

In papers filed last week in New York State Supreme Court in response to the suit, he alleges that the board concocted a false need for $17 million in additional capital from its board members in a bid to oust him and Laufer from the project. The board, knowing that he and Laufer would be unable to raise the money to meet the capital requirements, saw the calls as a means to dilute the equity stakes owned by the two small-time investors and to increase their own by making up the shortfall, Kaufman claims.

While strong-arming fellow investors is not illegal, the means by which the large investors called for additional capital did break the terms of the project’s operating agreement, which stated that the board must identify an immediate need for funding and make a “good faith” effort to raise it from outside before turning to the board for additional capital, Kaufman claims. He alleges that, with outside funding readily available and no immediate budget shortfall, it’s clear the board did not make those “good faith” efforts.

At the time of the capital calls, the wheel already had a $150 million commitment in the form of EB-5 funding, a $120 million senior loan from Deutsche Bank, a $10 million equity commitment from the Angelides Group, a $5 million loan from the New York City Investment Fund and was in talks with various other prospective investors, Kaufman said. Goldman Sachs, which financed the nearby Empire Outlets, had also expressed interest in investing in the project, he claims.

At that time, the wheel’s board had also obtained an early-stage commitment from New York Life insurance company to be the sponsor of the wheel for 22 years. That deal has since fallen through, New York Wheel president Rich Marin told The Real Deal.

 “This litigation represents an all-too-common effort by a latecomer Goliath investor seeking to eliminate the initial entrepreneurs who came up with the plans and ideas,” Kaufman alleged in court papers. “The board is not free on a whim, or even on hasty consideration, to demand $17 million in capital contributions from members.”

The larger investors want to dilute Kaufman’s stake in the project to 1.077 percent from 4 percent and raise their own from 51 percent to 78.84 percent, Kaufman claims. He has already been forced to relinquish his position as CFO on the board as a result of the missed payment deadlines.

“Wheel Estate has engaged in an egregious scheme, in breach of its contractual obligations, 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.”

Marin, who is neither a plaintiff nor a defendant in the suit, said Kaufman and Laufer’s claims were little more than sour grapes from investors who simply didn’t have the cash reserves to keep up with fellow board members.

“There are many very sophisticated investors involved in this project and then there are these two fellows who have gripes,” he said. “It’s more than coincidental that they were not able to put the money forward and now they have a gripe. I don’t believe they can do anything to impede the progress of the wheel.”

The wheel’s developers are projecting first-year pre-tax revenues of a whopping $127.85 million in 2017, as The Real Deal reported last month. Those projections, if met, would make the wheel more lucrative than the Empire State Building’s famed observatory deck, which took in $111.5 million in revenue last year.

Source: Early New York Wheel investor claims project has no coherent business plan, ineffective management

Maryland-based investment firm ASB Capital Management acquired a nine-story, 43,000-square-foot Flatiron District commercial building for just under $44 million, according to property records filed with the city last week.

ASB bought the building at 7 West 18th Street, located between Fifth and Sixth avenues, from Connecticut-based Scandia Realty for a purchase price of $43.75 million. The deal closed Dec. 14.

In addition to 4,000 square feet of retail space currently occupied by furniture store Homenature, the 115-year-old commercial building houses more than 39,000 square feet of office space in the heart of the Midtown South district — which ranks as the tightest office market in the city. The deal amounts to slightly over $1,000 per square foot.

Neither ASB nor Scandia could be reached for comment. The Bethesda, Md.-based firm partnered with Chicago-based L3 Capital to acquire a portfolio of 16 Williamsburg properties for $86 million earlier this year. The firms are planning residential and retail projects on the sites.

ASB’s real estate investments division currently has around $6 billion in assets under management, according to the company’s website.

Source: ASB buys Flatiron District office building for M

Source: The week in luxury: A map of NYC’s priciest apartment sales

The Federal Reserve has finally lifted interest rates from 0% and after nine years without a rate hike.

The potential ramifications of the policy move are far-reaching and span various American industries, from automakers to homebuilders to investment banks.

But those impacts may be disparate.

Typically, rising interest rates make for a more difficult borrowing environment. That has the potential to slow home sales, which impacts US banks, as well as new starts, which will hurt homebuilders.

With the Fed’s rate hike, history shows homes starts have tended toward a decline, which will inevitably hurt homebuilders. When rates get higher, building new homes is usually a less attractive prospect.

“Homebuilding stocks are typically losers from an absolute and relative standpoint during tightening cycles,” according to a separate Credit Suisse note from December 15. “Historically homebuilding stocks underperformed the S&P 500 during each of the past six Fed tightening cycles.”

For years after the Federal Reserve’s decision to back down interest rates to 0%, a badly beaten homebuilding sector saw gradual increases in both homes starts and permits. They never rose to the pre-crisis levels, but the period that led up to this was in part fueled by an unprecedented boom in lending to many unqualified borrowers.

Yet it is debatable on Wall Street whether the average consumer’s psyche is far less tethered to the behavior of US central bankers than, say, that of a Wall Street executive.

“If we do see some rate increases coming, because it reflects a stronger economy, nobody is going to not buy a house because the mortgage rates went up,” Wells Fargo CEO John Stumpf said the Goldman Sachs Financial Services Conference earlier this month. “They can choose a different product and probably get the same rate. The same thing is true for small businesses.”

But Bank of America CEO Brian Moynihan doesn’t agree with Stumpf.

“If you see rates rise, you’ll see the mortgage market slow down,” Moynihan said at same event earlier this month, before the Federal Reserve raised rates.

At still the same event, Blackstone Group CEO Steve Schwarzman noted that most interest-rate hikes have typically resulted in an uptick in home prices.

“Twenty-five out of 26 times when interest rates went up, home prices went up,” Schwarzman said.

If that is indeed the case, homebuilders may be better building more and aiming to make it up on margin. Even at the end of 2016, interest rates are expected to remain near record lows for the last half-century.

Source: A big change could be about to come to the housing market

If you’re sick and tired of paying the taxman, you may want to consider booking a flight to St. Kitts and Nevis. You’ll probably stay a while. In exchange for investing big money into real estate projects, the island nation is offering the gift of citizenship.

St. Kitts and Nevis isn’t the only Caribbean nation exchanging citizenship for investment. Islands like Dominica and Grenada have also been courting wealthy Chinese, Russians, Middle Easterners and even Americans to invest $200,000 or more into real estate developments for a new passport.

That type of investment has helped pay off resort projects from Hilton, Hyatt and the Four Seasons, among others, the Wall Street Journal reports. As many as 2,000 investors signed up across the Caribbean this year, estimates Canadian wealth firm Apex Capital Partners.

And business is booming in St. Kitts and Nevis. Officials wouldn’t disclose the sum but said revenue in 2015 exceeded expectations by 42 percent.

Buddy Darby, the developer behind Christophe Harbour, a master planned community with a Park Hyatt hotel and a marina, said he raised $42 million of the $350 million by tapping wealthy investors who became St. Kitts citizens.

The dollars-for-visa program resembles the controversial EB-5 visa program in the U.S. which offers residency to foreigners who invest at least $500,000 in job-producing ventures.

Much as that program is criticized, the U.S. government has said the Caribbean citizenship programs enable investors to cover financial crimes. Meanwhile, a record-number of Americans are giving up their citizenship as the U.S. government clamps down on tax dodgers abroad. [WSJ] — James Kleimann

Source: Have 0K lying around? Wanna become a citizen of St. Kitts?

From Luxury Listings NYC: This ain’t your typical igloo. Sweden’s 55-room “Ice Hotel” in the tiny village of Jukkasjärvi is a pop-up palace that has been around for 26 years. Elle Decor reports its cool history: Because it is hand carved each year out of 4,000 tons of ice and snow harvested from the nearby River Torn — this year in just two months — it sports a unique design yearly. [more]

Source: Sweden’s unique Ice Hotel is the coolest place you will ever chill

The more than 12,000 members of the Real Estate Board of New York will soon be reaching for their checkbooks to send their annual dues to the influential trade group. And there’s no doubt many will be engaging in a yearly cost-benefit analysis of the nonprofit’s value.

Members pay more than $6 million per year in dues — which are supposed to be in on Jan. 1 — and the group takes in several million more through its annual gala and other income that make up its approximately $9 million annual budget.

The 115-year-old organization is the undisputed top real estate organization in the city, and presents a powerful and unified public front. But there are rumblings of discontent, partly because it operates with a lopsided distribution of power. For example, building owners and residential firms are contributing roughly the same amount of money to the organization, but owners outnumber residential brokers on the board 10 to 1.

Read the whole story from our December 2011 issue here.

Source: From the archives: Reassessing REBNY

New Yorker’s aren’t the only people out there that have to cram all their worldly possessions into tiny living spaces, but a new type of construction is creating small spaces that make a big impact. The micro apartments at Carmel Place are the first new construction of tiny apartments in New York city in decades and they just might have been worth the wait.

Source: The tiny apartments creating a big impact in NYC (VIDEO)

Perhaps no mayor in recent history has taken such delight in shaping New York as Michael Bloomberg. Indeed, he rezoned over a third of the city, while developers added a staggering 40,000 new buildings since he took office, according to an analysis of census data by the New York Times. But whether developers — and the real estate industry as a whole — can count on having an ally in City Hall once Bloomberg’s 12-year reign ends in January remains to be seen.

As the race to replace him moves into the homestretch — this month voters will go to the polls to cast ballots in the long-anticipated Democratic and Republican mayoral primaries — The Real Deal talked to some of the leading candidates on both sides of the political aisle. (Bill Thompson is the only major candidate who did not participate).

Below is a side-by-side look at where the candidates stand on key real estate issues, including rezonings, air rights and tax breaks. Read the full story from our September 2013 issue here.

Source: From the archives: Mayoral candidates get candid

From Luxury Listings NYC: Kerry Washington, aka Olivia Pope on “Scandal,” aka the most stylish woman on TV, has just sold her Los Angeles home, and boy does it have a nice closet.

Though the buyer of the house was undisclosed and so was the selling price, Washington and her husband, retired NFL player Nnamdi Asomugha, had listed it for $2.695 million, Variety reports. It was only on the market for a few weeks, but apparently the allure of living like a Shondaland star was irresistible. [more]

Source: Olivia Pope would be proud of the closet in Kerry Washington’s LA pad

China Vanke sure is receiving some unwanted attention these days. The world’s largest property developer — with stakes in New York properties like the Bush Tower and Aby Rosen’s 100 East 53rd Street — is fighting a takeover attempt from Baoneng Group, a privately-owned Chinese property-to-finance behemoth. Baoneng is China Vanke’s largest shareholder at 22 percent.

Vanke will issue more shares in an asset restructuring in an attempt to reduce Baoneng’s power, the Wall Street Journal reports.

So who would gobble up newly-issued shares? State-owned China Resources Group, with a 15 percent stake in Vanke, could potentially step up, according to the Journal.

However, with Vanke’s stock having soared 68 percent in the past month, any new investor would likely receive a discounted rate. And a discount would certainly upset existing shareholders like Waldorf Astoria Hotel owners Anbang Insurance Group, which recently bought a 5 percent stake. Along with Baoneng, Anbang could try to block Vanke’s share issuance, according to the Journal.

The restructuring could also mean that Vanke purchases assets, the Journal reported.

Vanke has a controlling stake in the 30-story office building known as the Bush Tower and also bought into Aby Rosen’s condo project at 100 East 53rd Street.

In November, Vanke paired with Adam America and Slate Property Group for a development site at 10 Nevins Street in Downtown Brooklyn. The trio have planned a 33-story condo tower. [WSJ] — James Kleimann

Source: China Vanke fighting off takeover attempt from Baoneng Group

The “SuperPier” officially has its anchor: Google signed a 15-year lease for 250,000-square-feet with Pier 57 development team Youngwoo & Associates LLC and RXR Realty on Friday.

In addition, chef and television personality Anthony Bourdain is close to inking a deal for his 155,000-square-foot international marketplace on the Meatpacking District pier, the Wall Street Journal reported.

Bourdain’s “Asian night market” on the pier’s main concourse and mezzanine will boast around 100 culinary vendors, the New York Times reported earlier this year.

The transformation of the former freight terminal and bus depot in Hudson River Park has banked on commercial tenants gravitating toward 24/7 neighborhoods and high demand for work space in the Midtown South office market.

“If you think about Midtown South, where are you going to get 250,000-square-feet of space, unique, big floor plates, incredible views…a marketplace, parks where you can sit outside?” RXR Realty CEO Scott Rechler told the Journal.

RXR and Young Woo agreed a 97-year ground lease with the Hudson River Park Trust for the property. The $350 million redevelopment is slated to cover 480,000-square-feet of office and retail space.

The Trust’s board still needs to vote to approve the lease. Earlier this month, Gov. Andrew Cuomo gave the thumb’s up for the project, green-lighting state approval.

The pier’s revamp will also include adding two mezzanine floors and a roughly 80,000-square-foot rooftop public park. [WSJ] — TRD

Source: Google officially inks 15-year lease deal for Pier 57

In observance of the holiday on Friday, The Real Deal won’t be posting. Keep an eye out for breaking news though, and be sure to check back bright early Saturday morning, for the start of our Weekend Edition.

Source: Happy holidays from The Real Deal!

Related Cos., in partnership with New York City pension funds, is ramping up its multifamily moves, with the $112.5 million purchase of a 20-building Bronx portfolio – the largest package to change hands in the borough this year, sources told The Real Deal.

The portfolio contains 737 apartments spread throughout the North, West and South Bronx. In a statement, a spokesperson for Related confirmed the portfolio buy and said the firm’s Related Fund Management arm and the pension funds plan to preserve the units in a long-term hold as workforce housing.

The buildings are largely low-rise walkups with rent-stabilized units. They are in a mix of working-class and middle-class neighborhoods such as Soundview, Wakefield, High Bridge and Fordham.

A group of private Brooklyn Heights-based investors known as Eastern Capital Partners acquired the properties in several transactions over the past five years, records show.

Addresses include 4002-4004 Carpenter Avenue, 1085-1095 Colgate Avenue, 2608 Creston Avenue and 1065 Jerome Avenue, among others.

Rosewood Realty Group’s Aaron Jungreis and Besen & Associates’ Amit Doshi and Ron Cohen each brokered portions of the deal. Jungreis, Doshi and Cohen declined to comment.

Last year, Related and the city pension funds to acquire 35 rental buildings from Stanley Wasserman’s SW Management for $270 million. Over the summer, the development giant behind the Hudson Yards megaproject scooped up a 10-building, Brooklyn-and-Queens package from Silvershore Properties and three formerly distressed buildings in Marine Park.

The Bronx is undergoing something of a residential renaissance, with more than 11.5 million square feet of residential real estate under development borough-wide, according to a TRD analysis in September.

Two of the other large Bronx portfolios of the year include A&E Real Estate’s purchase of a 441-unit complex in Riverdale for $89 million and an Asden Properties-led group’s acquisition of 612 apartments for $90 million.

Source: Related makes biggest Bronx portfolio deal of the year 

Kahen Properties is taking another crack at 145 Madison Avenue.

The developer has submitted plans, for the second time, for a new 21-story building on Madison Avenue, DNAinfo reported. Alex Kahen’s firm first filed plans for the property in May, but the Department of Buildings rejected the application. It wasn’t immediately clear why the original plan wasn’t accepted.

The latest plans for 143-145 Madison Avenue call for 71 apartments, 21 of which will be below-market rate, across 56,306 square feet. The building will also have 2,779 square feet of ground-floor commercial space, according to the permit.

The company acquired the two adjacent buildings — 143 and 145 Madison Avenue — in 2013 for $12.2 million. The city approved demolition plans for the property in July. In September, Kahen snapped up four multifamily buildings in Gramercy Park for $18.5 million and three buildings in Downtown Brooklyn for $23.2 million. [DNAinfo] — Kathryn Brenzel 

Source: Kahen Properties plans 21 affordable units for NoMad building

First the Meatpacking District, then the world.

Well, okay, actually just Lower Manhattan and the Bronx.

Chris Reda, owner of Gansevoort Market, is planning to open additional food halls in the Grand Concourse in two other areas of the city.The market will also relocate from its current Meatpacking District location — 52 Gansevoort Street, which is being redeveloped — to a 12,000-square-foot space at 353 West 14th Street, the Wall Street Journal reported.

The planned expansion would join the city’s growing number of upscale food halls that have sprouted across the city over the last few years, like Gotham West Market and City Kitchen. Earlier this week,  Vornado Realty Trust announced that its 2 Penn Plaza will soon be home to an 8,000-square-foot gourmet food court, dubbed Pennsy.

Reda is also working on a retail project in Dumbo — Empire Stores — that will include a 10,000-square-foot food hall, and he plans to bring a hall to Miami next year. Reda told the newspaper that his projects fall under the “Mrkt” brand, but he doesn’t consider the various food halls as part of a chain. [WSJ] — Kathryn Brenzel

Source: Gansevoort Market owner aims to open food halls in Lower Manhattan, Bronx