Wall Street

As the speculation around Bear Stearns turns from when and if to how and by whom, the below excerpt from The Observer's John Koblin shows just how far the investment bank has tumbled in little over a year. The excerpt is from a story dated Jan. 21, 2007.

When it comes to the relentless pursuit of prime Manhattan real estate in the last six months, Bear Stearns is unmatched.  read more »

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If Manhattan’s masters of the universe are not buying baubles for their partners on Valentine’s Day, what other obvious signs of belt-tightening does one see on Wall Street these days? I visited the Street's BMW dealership—another product of the boom—to see if bankers are skimping on their own toys as well.  read more »

Investment bank Bear Stearns has reported its first-ever quarterly loss. The loss of about $854 million over the fourth quarter of 2006 exceeded fears about how badly the bank's investments in subprime mortgages would affect it, according to The New York Times.

The Wall Street Journal on Wednesday reported that top executives at Bear Stearns would skip year-end bonuses for themselves.

Goldman Sachs, the world's largest investment bank, is set to report on Tuesday a record annual profit of $11 billion, according to news reports this morning. More importantly for New York City and its real estate market, the average Goldman Sachs year-end bonus is expected to average an astounding $600,000 per employee--about double the average paid at other firms.

Despite Jesse Jackson’s warning of an impending “economic tsunami” from the subprime mortgage crisis, the only people marching on Wall Street on Monday afternoon were the business people whizzing past the few dozen protestors chanting “Restructure Loans—Don’t Repossess Homes” on the corner of Broad and Exchange streets.

Most business people strode past picket-wielding demonstrators, nonplussed by the accusations of “predatory lending” and “white-collar crime” being lobbed from the podium inside the metal barricades one block south of the New York Stock Exchange. As one speaker called on “Wall Street to help out the main street," a suited passerby shook his head and muttered, “Yeah, well, don’t buy something you can’t afford.”

Some spectators, like lawyer Angelo A. Paparelli, agreed that the government needs to do more to stem the two million mortgage foreclosures that are expected in the next two years.  read more »

The city will have to keep waiting to find out how much Wall Street will take home in year-end bonuses. The state Comptroller's office usually releases by mid-December estimates of the total bonus amount and average bonus per Wall Streeter, but Comptroller spokesman Robert Whalen tells us today that the estimates won't be out until early January.  read more »

Jesse Jackson plans a Monday march on Wall Street to pressure mortgage lenders to help stem the tide of foreclosures washing over the nation. Crain's reports that the rally is meant to lean on lenders to restructure loans and set aside more money for their "victims," instead of waiting for more foreclosures.

Bloomberg News reports that the leading Wall Street investment banks could hand out $38 billion in year-end bonuses--or, about $201,500 per employee.  read more »

We had a chance to parse state Comptroller Thomas DiNapoli's report (PDF) on Wall Street's 2007 performance. Contrary to some earlier media coverage, the report looks mild in its pessimism, preferring a sort of not-too-hot-not-too-cold assessment of the Street's performance and its chances for a prosperous new year.  read more »

Wall Street bonuses this winter may be less than last winter's, but so what?

Even if bouses drop 10 percent--as state Comptroller Thomas DiNapoli predicted yesterday--that would still mean that 2007's total would be higher than every year's total except for 2006, when bonuses hit a record total of $23.9 million. Really, now, would a bonus season of $21 billion or thereabouts be so bad?  read more »

Within the next four weeks, the twitter about Wall Street bonuses will reach fever pitch. Will the bonus total beat last year's record of $23.9 billion? How much of the bonuses will be spent on real estate? How much will the new Tiffany's on Wall Street get?

But, most of all, how much will each Wall Streeter get?

We got a hold of stats from the state Comptroller's office, which tracks the Wall Street bonuses every winter. Last year, the average bonus per Wall Streeter was a record $137,580. In 2005, it was a then-record $119,390. In fact, the average individual bonus in 2006 was 10 times the average 20 years earlier, in 1985, of $13,970.

And isn't that what matters to retailers, be they real estate brokers or salesmen at the financial district BMW dealership?  read more »

You know those little turquoise boxes from Tiffany’s, the ones with a big white bow? Apparently, they are among the great icons of the world—up there, I suppose, with the pyramids, the Great Wall of China and the Eiffel Tower. At least, that’s what Deputy Mayor Daniel Doctoroff said at Wednesday's grand opening of the new Tiffany & Co. store on Wall Street.

“So many of us have enjoyed Tiffany products in our lives,” Mr. Doctoroff gushed.

I’m not sure his words registered with the coffee-cart vendors whom Tiffany’s had contracted to display turquoise umbrellas and give out free coffee (in turquoise paper cups) and cookies, but Mr. Doctoroff was probably right about most of the hundred or so well-heeled tourists and Wall Street types who came to watch the ribbon-cutting and partake of free breakfast and gift bags.  read more »

An influx of tenants in creative fields is changing the law-and-banking character of the neighborhood—a little.  read more »

While New Yorkers watch the unfolding melodrama of the Spitzer-Bruno-Troopergate, the state and city stand together at the cusp of a fiscal crisis that both Governor Spitzer and Mayor Bloomberg have chosen to ignore.  read more »

Cupcakes are coming to Wall Street.

Crumbs Bake Shop recently closed on a 550-square-foot lease at 67 Wall Street, according to Winick Realty. The two brokers on the deal were Winick’s Darrell Rubens and Angelina DeRichie. The planned opening for the new store is late August.  read more »

The full flowering of the financial district’s success since Sept. 11, 2001, can be smelt within the Broad Street Hermès store, which had its first full day Friday.

To be amongst its $1,250 t-shirts, $520 belts, $5,750 leather jackets and $810 handbags is to feel the full braggadocio of capitalism in Manhattan—Power! Money! Stephen Schwarzman!—and it felt pretty good, though a bit disquieting. After all, the prices!  read more »

Upscale Italian clothier Canali recently signed a 10-year lease for 2,500 square feet at 25 Broad Street—right near the sorts of Wall Streeters who would crave the retailer’s $3,000 suits and $100 ties. The store’s scheduled to open this summer. The asking rent was just shy of $200 a square foot annually, according to Winick Realty Group's Darrell Rubens.  read more »

Could New York City be losing its place as the world’s foremost art emporium?  read more »

In the first quarter of 2007, the Manhattan housing market notched a record number of apartment sale  read more »

If you’re a buyer looking for a good deal in the Manhattan housing market, consider condominiu  read more »

Need more proof the Manhattan housing market's unique?

While inventory here dropped in the first quarter of 2007, inventory in markets like Los Angeles and Washington, D.C., increased. In the quarter ending March 31 in Manhattan, the inventory of unsold homes on the market was down 0.2 percent from the quarter before, according to appraisal firm Miller Samuel. (It was also down more than 14 percent from the first quarter of 2006.)

In other markets, though, inventory went up--sometimes by a lot--during recent months. The Wall Street Journal reports that inventory in Los Angeles was up 12.8 percent from February through March, and, in the San Francisco Bay Area, it was up 12.2 percent. In fact, the inventories of unsold homes in 18 major metropolitan areas, not including New York, was up 6.5 percent in March from a month earlier.

- Tom Acitelli

Madonna Watch 2007: She’ll Be Back to Buy    read more »

Madonna Watch 2007: She’ll Be Back to Buy    read more »

The Association Center, the office building at 120 Wall Street once dedicated to nonprofit organizations, is getting more profit-oriented.

Two of the roughly 40 nonprofit tenants have announced that they are leaving in part because the building's tax breaks, and the one-time cheap rents of the Financial District, are disappearing.

The 78-year-old, 600,000-square-foot office building, owned by Larry Silverstein, was designated the Association Center 14 years ago when the Dinkins administration was trying to revive Wall Street real estate. The city agreed to forgive nonprofit tenants real estate taxes, worth about $4 a square foot, but those original leases, and the tax breaks, are now expiring. The Guttmacher Institute, a reproductive research think tank, bought an office condo at 125 Maiden Lane this month, while the National Federation of Community Development Credit Unions moved to John Street in February. Together they rented about 23,000 square feet.

"We found that the prices for leasing were much more than we could bear," said Robert D. Rosendale, the vice president for administration and finance at the Guttmacher Institute. "We were paying right around $23 [a square foot], and that was going to go to $35."

He added that the institute needed more space because of a growing staff and that staying in 120 Wall would have required renting on non-contiguous floors.

Both Mr. Rosendale and the credit union association said that there were rumors that the building would eventually be converted to residential condominiums. Dara McQuillan, a spokesman for Silverstein Properties, said, "There are no present plans to operate 120 Wall as anything other than an office building."

He added that the company had been renewing leases for as far ahead as 2017 or 2018, and the building's 100 percent leased.

"The project was developed to stop the exodus of associations from New York and it did that," said Joel Dolci, the president of the New York Society of Association Executives, which helped secure the tax breaks. "We are hoping that that does not recur. We are trying to make every effort to assist the organizations with other space."

The city Economic Development Corporation, which last year established a separate desk to serve nonprofits, is talking with other priced-out tenants and encouraging them to consider places like Long Island City and downtown Brooklyn--which also happen to be areas where great hopes for satellite office districts have so far floundered.

"The Bloomberg administration is committed to helping New York City's not-for-profits locate and expand in all five boroughs," said EDC spokeswoman Yonit Golub.

- Matthew Schuerman

The Wall Street Journal's architecture critic Ada Louise Huxtable tackles the three shows now running under the title "Robert Moses and the Modern City: The Transformation of New York." She's old enough to remember battling Moses' plans, and, therefore, finds the show's "comprehensive objectivity" jarring:

"The carefully inclusive narrative tells it all in safely worded labels that neutralize outrage.... [I]ts very evenhandedness is disturbing. It is almost too cool; there was nothing evenhanded about Moses."

- Tom Acitelli

Godly-voiced newsman Tom Brokaw has bought the duplex apartment that belonged to the godly Barbara E  read more »

The upmarket men’s clothier Thomas Pink is moving downtown.    read more »

Good-bye to all that: The Apthorp, one of the most coveted and romanticized rental buildings in New York City, will be converted into condos, according to The Wall Street Journal. Israeli billionaire Lev Leviev bought a 50 percent stake in the 163-unit building at 2207 Broadway in a $426 million deal that closed on Wednesday night.

With the Apthorp's ground-floor retail factored into the deal, the purchase price is about $2.4 million per apartment, making it the most expensive price ever for an American residential building.

The Apthorp, with rents as high as $20,000 a month, has been home to Conan O'Brien, Al Pacino, and Nora Ephron, who last year wrote a long love letter to the Upper West Side building in The New Yorker. Ms. Ephron, like many Apthorp tenants, had been protected from market-rate rents through regulation. Many apartments remain rent-stabilized, meaning the new owners will have to either buy out tenants or otherwise boot them for the condo conversion.

- Tom Acitelli

Fresh (more or less) from his apperance in Selma this weekend, Barack Obama is swooping down on Clinton turf for a number of New York City fund-raisers, kicking off this evening with an event hosted by Antonio "L.A." Reid, one of the country's most powerful African-American record executives.

Judging by the host committee, the event, which has a "suggested" entrance price of $2300, seems geared toward a combination of prominent black businessmen and young mover-shakers.

Ray McGuire, a prominent Wall Street banker, is part of the host committee, as are fund manager Tracy Maitland and former Motown Records president Andre Harrell.

The list also features a number of prominent baby bundlers, including Jonathan Soros (son of George), James Rubin (son of Robert), Joshua Steiner (colleague of Steve Rattner), Wall Street wunderkind Eric Mindich and former John Kerry fund-raiser Jamie Whitehead.

Obama will be back this Friday for a reception (hosted by many of the same high-rollers) at the Grand Hyatt.

-- Lizzy Ratner

• A tale of reaction to two sales: Starrett vs. Stuy Town.
[NY Times]
• Where are home prices now nationally?
[NY Times]
• More buildings ending open houses.
[NY Times]
• The multi-building look of 1 Gracie Square.
[NY Times]
• Home prices appreciating in the Bronx's Baychester.
[NY Times]
• Architect, developer of 48 Bond are women.
[NY Times]
• What co-op record isn't an owner entitled to see?
[NY Times]
• How to deal with owners who don't pay common charges.
[NY Times]
• Limits on rent-regulated landlords' "personal use" of units.
[NY Times]
• Agent teams a trend in Connecticut market.
[NY Times]
• Wi-Fi is the new air-conditioning for retailers.
[NY Times]
• Refashioning Campbell Apartment--in one night.
[NY Times]
• Man makes purple truck home in Brooklyn.
[Daily News]
• Relief among Starrett City residents.
[Daily News]
• New director of city's Office of Long Term Planning.
[Daily News]
• Bay Ridge church in coming condo deal.
[Daily News]
• Mortgage rates fall.
[WSJ]
• 2nd Avenue Subway groundbreaking weeks away.
[NY Post]
• Hundreds protest Trump Soho condo-hotel.
[NY Post]
• National Register lists Wall Street Historict District.
[NY Sun]
• Landmarks to vote on Sunnyside designation.
[NY Sun]

Did we miss any New York City real estate news this morning? Please send along tips and links.

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The developer who is building the new downtown W Hotel is spreading his empire to Fifth Avenue.  read more »

F.  read more »

In the Times's EOP post-mortem this morning, Terry Pristin takes a look at Steve Roth, the head of Vornado who lost big to Blackstone in a months-long bidding war. The conclusion: It's a defeat, but Roth's reptuation is safely in place.

"He had a defeat in an unbroken string of successes, which is something unusual for him," said Doug Durst to the Times. "But it's not like he had a project go south on him, so it's not a terrible black mark."

The evidence? Wall Street still backs him. Vornado's share stands at $134.65 and on the day Mr. Roth backed out, the company's share rose more than 7 percent.

- John Koblin

Imagine how New Yorkers might react. The Wall Street Journal reports on Tuesday that someone mailed a letter bomb to the London office that collects fees for driving in some heavily trafficked parts of the British capital. New York is considering a similar congestion-pricing arrangement. A worker at the London office was "slightly injured" by the bomb. - Tom Acitelli

The Wall Street Journal (fee requried) says that the President's FY 2008 budget proposal includes another $175 million for "congestion initiatives" undertaken by cities and states, on top of $130 million that is expected to go out this spring.

New York, the article says, is "taking a look" as to whether to apply--though you would be hard-pressed to hear that on the record from the Bloomberg administration.

- Matthew Schuerman

Speculators and new construction have driven the national homeowner vacancy rate to its highest level ever, according to the Census Bureau.

The rate that measures how many vacant homes are on the sales market hit 2.7 percent in the fourth quarter of 2006, up from 2.0 percent a year earlier. Last year marked the first time the rate went above 2.0 percent. The Wall Street Journal on Monday reported that the spike was due partly to speculators trying to cash out of the housing market and partly to new construction that will have to slow for the vacancy rate to ebb.

The Real Estate couldn't find the homeownership rate for New York State or New York City. If anyone knows if such info exists--and where it can be found--please email. (The Census Bureau pegged the Northeast's rate at 2.0 percent.)

Here's the Census Bureau's release (PDF).

- Tom Acitelli

Mike Bloomberg is only a few minutes into the presentation of his executive budget in the Blue Room right now, and he's already setting out to debunk the an oft-repeated criticism of the city's economy: that Wall Street is booming but everyone else is falling behind.

He said the "Wall Street bonus pool was significantly higher," but that non-Wall Street earnings in the city grew at a rate of 1.17 percent above the rate of inflation.

His language was more guarded the real estate picture. Bloomberg said that it's taking longer on average to sell a house in the city, which will inevitably drive the cost of houses down and lead to less revenue in the future.

In other words, don't get too excited about those extra billions of dollars in revenues you may have been reading about lately.

-- Azi Paybarah

Tomorrow is the deadline for all state comptroller candidates - real and rumored - to file paperwork with the state in advance of interviews on January 23 with the legislature and an independent screening panel.

The procedures were announced in a joint statement from the Assembly and Senate which explained that candidates will have to submit resumes and to fill out financial disclosure forms.

In the meantime, the would-be comptrollers who currently serve in the state legislature are continuing to pour cold water on the Eliot Spitzer-endorsed idea that the position could profitably be filled by someone from the outside Albany, arguing that the skills it takes to manage the state's money are distinct from those required to manage a portfolio on Wall Street.

"The last thing in the world you want is the comptroller picking stocks," Richard Brodsky told me earlier this week.

"You can't possibly manage a $150 billion portfolio one investment at a time. Second of all, the job here is to balance reward and risk, in terms of investment, in ways that are not similar to managing ones own portfolio.

"This is not a question of whether you know whether you should be picking GE or GM. It's a question of how you calculate risk, especially in a fund that has been very heavily involved in what I'll call domestic equity. Essentially, if the stock market tanks, the fund tanks. That's not good policy. There needs to be a diversified investment portfolio including what are called alternative investments in ways that really reduce long term risk."

-- Azi Paybarah

"We're not about to turn 125th Street into 42nd Street or Wall Street," one participant in a public hearing on Wednesday night said.

Ahem. Isn't it sort of that way already?

The Columbia Spectator reports some resistance to the city's plan to make 125th Street more commercial and to create an "arts and entertainment sub-district." - Matthew Schuerman

Yet another thing wherein New York dominates Boston, a city in Massachusetts on the Charles River--ownership of office buildings in Boston's financial district.

Fifty-three percent of financial-district buildings are now owned by New York-based landlords, The Wall Street Journal reports. These include One Federal Street, bought by Tishman Speyer last year, and the recent purchase of the State Street Financial Center by Fortis Property Group.

A decade ago, 55 percent of Boston's financial-district buildings were owned by local landlords.

- Tom Acitelli

Hillary Clinton spoke to Wall Street leaders at Jesse Jackson's conference today.

Not everyone in the legislature is honoring Eliot Spitzer's self-imposed ban on fund-raisers in the capitol.

Ben wonders if Eliot Spitzer set expectations too high.

The city's top lawyer went to Albany to argue against open primaries in judicial races.

The Working Families Party wonders which politician is next to go topless.

Larry Silverstein wants to build low-income rentals on 42nd Street.

A candidate for Yvette Clarke's City Council seat in Brooklyn wants the city to do more about 421-a housing.

For the first time ever, a majority of people in Utah don't support the war in Iraq.

Howard Kurtz wonders if John Edwards is candid or super-scripted.

Oliver North contradicts Joe Lieberman on Iraq, according to Greg Sargent.

And pictured above are three men (and associates) in a room.

--Azi Paybarah

If 2006 was a year that confirmed downtown’s renewed relevance, then what a way to finish.  read more »

In 1992, I wrote a short book about a number of things going on in this country that I thought we as  read more »

More on what Eliot Spitzer should be looking for to in Alan Hevesi's replacement for comptroller...

One line of argument that helped Hevesi win his re-election was that his opponent simply couldn't manage the state's pension because it was so big (about $150 billion).

But not many people have that experience, especially among the possible replacements who have already been publicly mentioned. Even bigshot money managers in the private sector don't normally manage accounts of that size.

So, what constitutes enough experience? There's an argument in the financial world that its not really the size of the investment that is worth noting, but rather, the size of the risk -- and whether that risk pays off.

In other words, managing $150 billion of low-risk investments may not be as difficult as managing $100 million of high-risk investments. And if anyone were to emerge from the financial sector, they'd have to get used to managing other people's money at a more acceptable level of risk, which is not always how the big bucks are made on Wall Street.

-- Azi Paybarah

In a speech delivered just now, Andrew Cuomo said he's going to audit 6,000 member items doled out by state lawmakers and recover any "misspent funds."

Cuomo said he would seek to recover the money under the Tweed law or other statutory authority, but did not indicate what action would be taken against a lawmaker who doled out the misspent money.

Future member items, he said, will have to meet the following criteria:

1) a bona fide legal public purpose for the grant;

2) effective administration by a state agency pursuant to a contract with specific terms and conditions which can be measured and controlled;

3) compliance in actual grant implementation; and

4) full disclosure of all grants throughout the budget process.

Cuomo also said he'll elevate the status of the Public Integrity Unit to Special Deputy Attorney General level and expand the staff in that area.

All this is music to the ears of good government groups, and to people on Wall Street, as The Dealbook noted yesterday.

-- Azi Paybarah

UPDATE: Cuomo spokesperson Wendy Katz clarified to me that the review of member items will apply to those authorized this year, not in previous years.

Most of the member items authorized this year haven't actually been issued, she explained, so the items determined to have no legal basis simply won't be approved. If the member item was already dispersed and is later found to be unjustified, the attorney general's office will try to use the Tweed Law to recover the money.

Just to clear that up.

Lower Manhattan had the highest annual growth in office occupancy costs among 134 markets surveyed in a new report. Lower Manhattan's occupancy costs have increased 63 percent, according to the report issued by Staubach Company and its London-based partner.

The report defined occupancy costs as a combination of rent, maintenance fees and taxes, excluding leasing incentives. Success spirited lower Manhattan to the costly top, The Wall Street Journal reports:

The steep increase in costs in lower Manhattan represents the turnaround from the relatively cheap prices in that area just a year ago and shows how much the area has come back since its devastation from the terrorist attacks of Sept. 11, 2001...

- Tom Acitelli

Why spend that Wall Street bonus on real estate? How about a party instead?

A downtown Manhattan hotel is offering a swanky party package dubbed "Friends With Money" that costs $137,580, the average Wall Street bonus this winter, according to the state Comptroller.

The Ritz-Carlton, Battery Park, will provide overnight accomodations for 32 guests in the presidential suite and 15 executive suites, a 10-minute fireworks display, helicopter tours, and limousine transportation for every guest, the Wall Street Journal reports.

- Tom Acitelli

Azi must be at the dentist, and thus temporarily unable to take phone calls, because he's had time to blackberry in his list of possible comptroller replacement candidates. Who, he asks, will be the lucky public official who "gets a prime spot seated behind the new governor when he delivers his State of the State address January 3rd?" Bill Mulrow: Lost to Hevesi but has plenty of Wall Street experience, and far fewer ties to the Albany political elite... Which might seem like an advantage right now. Assemblyman Tom DiNapoli: The nicest guy in Albany. Spitzer endorsed DiNapoli during his 2001 primary for Nassau County Executive against Tom Suozzi. Assemblyman Richard Brodsky: He does comptroller-esque work as chair of the assembly's committee on Corporations, Authorities and Commissions. Bronx Borough President Adolfo Carrion: His office already has an official comment denying, while confirming, his interest in the post. As for that report that he's the favorite, his spokesman says, "no comment." -- Azi Paybarah

It's official: 2006 is a record year for Wall Street bonuses.

The state Comptroller's office on Tuesday released its annual estimate of the bonuses for investment bankers and other financial types, and the number is slightly staggering: $23.9 billion, well more than last year's record of $20.5 billion.

That $23.9 billion is more than the GDP of several nations, but that doesn't mean that Wall Streeters will automatically pour their bonuses into New York real estate in 2007. The average bonus this year will be $137,580, after all, barely enough to cover the annual price of a parking space in some of Manhattan's finer garages.

- Tom Acitelli

In September, New York Times publisher Arthur O. Sulzberger Jr. embraced self-sacrifice.  read more »