Investment Sales | The New York Observer

State Shouldn’t Make a Whole New Ball Game of Mitchell-Lama

Thu, 19 Nov 2009 15:21:50 -0500

It is the top of the ninth inning in Game 6 of this year's World Series. The Yankees are playing the Philadelphia Phillies in the new Yankee Stadium. The Yankees have had another great year and are ahead in the series, three games to two. They are in search of a record 27th World Championship. Mariano Rivera, the greatest closer in the history of baseball, is on the mound for the Yankees, facing Shane...

Inside Iran's Fifth Avenue Skyscraper

Fri, 13 Nov 2009 13:07:23 -0500

Citigroup, Joseph Abboud, Kurt Salmon Associates, Pali Capital, and the Liz Claiborne Art Ortenberg Foundation are just a few of the bold-faced names who may have been paying rent to the Iranian government for their offices in a Fifth Avenue skyscraper, according to real estate sources, the tenants' own Web sites, and a complaint filed Thursday by the U.S. Attorney for the Southern District of New York.

The U.S. Attorney’s office alleges that the Alavi...

Oil-Rich UAE Buys Distressed East 46th Street Site

Thu, 12 Nov 2009 14:57:28 -0500

The United Arab Emirates has dropped a princely sum on a stalled development site in midtown east.

In an odd denouement to a development story that began in 2007, the Middle Eastern nation has paid $44.7 million to take the property at 313-317 East 46th Street, between First and Second avenues, off the hands of seller and real estate developer Alexander Gurevich. Property records indicate Mr. Gurevich bought the site from Gary Barnett's Extell Development for $40.95...

SoHo Properties Buys Chelsea Building for $45.7 M.

Mon, 09 Nov 2009 10:45:22 -0500

SoHo Properties has invested in Chelsea.

Sharif El-Gamal, chairman and CEO of the real estate investment group, has dropped $45.7 million on the property at 31 West 27th Street, which PropertyShark describes as a 12-story, 108,594-square-foot office building.

"We just bought it for the income," Mr. El-Gamal told The Observer. "It's got great long-term leases, and the financing was really attractive. We have five years at a very attractive interest rate, and it's probably the best B...

Fitch: Stuy Town Loans Transferred to Special Servicer

Fri, 06 Nov 2009 22:49:55 -0500

The main $3 billion mortgage for Stuyvesant Town and Peter Cooper Village has been transferred to a "special servicer," according to the rating agency Fitch, a significant step taken when loans are in default or on the verge of default.

The owners of the giant 11,200-unit Manhattan apartment complex, a partnership led by Tishman Speyer and BlackRock, had just $24 million left last month in a reserve fund to pay off debt, and default...

Worldwide Potential

Thu, 05 Nov 2009 11:03:38 -0500

When Worldwide plaza was completed in 1989, the West Side conjured thoughts of West Side Story, not high-end office space.

Fast-forward 20 years, and the sale of Worldwide Plaza—the 47-story granite and brick edifice that towers above Hell’s Kitchen, spanning 49th and 50th streets and Eighth and Ninth avenues—has been 2009’s biggest New York City building deal to date. While the rest of commercial real estate was in reruns this summer, Worldwide Plaza was very...

With Stuy Town, Electeds Play Bailout Card On Fannie, Freddie

Mon, 02 Nov 2009 22:42:46 -0500

With the ever-troubled Stuyvesant Town now bordering on default, particularly in the wake of last month's giant court decision, a set of elected officials has begun taking their concerns straight to the 11,200-unit complex's debt holders: Fannie Mae and Freddie Mac.

Bypassing the current owners--a partnership led by Tishman Speyer--the officials who represent the property sent a letter last week effectively asking for kindness and cooperation during the inevitable restructuring process (within the next...

Gural Sells Stake in Flatiron Building (Updated)

Mon, 02 Nov 2009 11:33:44 -0500

Newmark Knight Frank Chairman Jeffrey Gural and his partners have sold a stake in the Flatiron Building for $51.8 million, according to city records dated Oct. 28.

The buyer is listed as Michelangelo Flatiron Building Investment LLC, with an address at 805 Third Avenue. The LLC is 100 percent owned by the Michelangelo Fondo, which, in turn, is 100 percent owned by the Sorgente Group, headed in the United States by Veronica Mainetti. Sorgente already holds a...

The Digger

Tue, 27 Oct 2009 08:24:47 -0400

Two years ago, a major premonition rattled and shook Peter DeCheser.

Ten years into an escalating career with Massey Knakal, Mr. DeCheser, then a senior director of sales, began noticing faint but definitive signs of a financial backlash on the horizon.

First, an investment group he was representing suddenly pulled out of the market in the midst of an aggressive buying spree, just as the group was closing in on a building in the Financial District....

Tenacious Offense

Mon, 26 Oct 2009 17:25:14 -0400

The Commercial Observer: Tell me about how business is going since the acquisition.
Mr. Jaccom: Well, we just finished at the end of the year probably one of the biggest deals since ESG Insignia did their thing. It’s been a fantastic deal. They’ve been great partners. I mean, they’ve been partners in the sense that they’re with you in good and bad times, which is great. They’ve done everything they said they were going...

Tenants Celebrate Court Victory, Mostly

Thu, 22 Oct 2009 19:16:44 -0400

Tenants of Stuyvesant Town and Peter Cooper Village on Thursday expressed support for a ruling from the state's Court of Appeals, which said that landlord Tishman Speyer unfairly de-regulated thousands of rent-controlled apartments. While many specific implications are unclear, the decision seems to mean apartment deregulations will halt going forward.

"I'm thrilled," said Joe L., 63, a retired resident of a rent-controlled apartment who declined to give his full last name.

He said he was particularly incensed...

Speyers Dealt Tremendous Hit as Court Rules for Tenants at Stuy Town

Thu, 22 Oct 2009 10:44:36 -0400

In a decision with seismic implications for Stuyvesant Town and property owners throughout the city, the state's top court has ruled against real estate giant Tishman Speyer on a far-reaching rent regulation lawsuit, declaring the landlord had no right to deregulate some 4,440 apartments.

In a 4-2 decision, the Court of Appeals upheld an appellate ruling that said Tishman Speyer was not allowed to take apartments out of the rent stabilization program at the 11,000-unit...

Investment Sales: Never Mind the Adjectives, Look at the Numbers

Wed, 21 Oct 2009 13:25:28 -0400

When people talk about the building sales market in Manhattan today, and how slow things are, they often speak in adjectives. Here is a sample of some used in the past four months in various news articles: slow, anemic, horrible, inert, quiet, sluggish, creeping, apathetic, inactive, stagnant and lethargic. Rather than ask you to suffer through interpreting the degree to which these words apply, let’s look at some numbers. I have always preferred numbers...

Vig Stuy: Stuy Town Deregulation Efforts a Mess as Financial Clock Ticks

Tue, 20 Oct 2009 16:05:23 -0400

If the saga of the Stuyvesant Town-Peter Cooper Village sale is a countdown clock-the $5.4 billion purchase by Tishman Speyer and BlackRock is nearing default-there's a loud ding every few weeks in the form of a new analysis by a real estate tracking firm.

Each shows a fresh, dismally depressed value for the property ($1.99 billion based on current income), and tells of the new low level of the reserve fund meant to cover debt...

Payment Due! Class A Midtown Loans

Mon, 19 Oct 2009 18:57:05 -0400

As conditions in Manhattan’s commercial market grow grimmer, one question continues to dog investors: Where’s the debt and how can I break me off a piece?

The Manhattan office market dropped 22.9 percent between the second quarters of 2008 and 2009, according to the Moody’s/REAL Commercial Property Price September Indices, compared to 30.1 percent regionally and 21.2 percent nationally. (The indices track the price changes for commercial real estate in the top 10 U.S. markets...

Leona Helmsley Trust Sheds Two Manhattan Properties

Wed, 14 Oct 2009 16:25:06 -0400

The estate holding the assets of the one-time hotelier and reputed Queen of Mean Leona Helmsley sold two properties on Manhattan's East Side on Oct. 1, according to city records.

The properties in question are a ground-floor 4,178-square-foot retail condominium at 760 Third Avenue and the nearby 144 East 48th Street, a 114,500-square-foot apartment building between Third and Lexington avenues. A partnership with principals in Mamaroneck and Los Angeles bought the two properties for a...

How Keen Is Manhattan Valley?

Tue, 13 Oct 2009 15:10:51 -0400

An unexpected alliance between a powerful developer and a neighborhood retirement home is causing an uproar in the Manhattan Valley section of the famously ornery Upper West Side.

Enigmatic developer Joseph Chetrit and Jewish Home Lifecare, which has a campus at 120 West 106th Street, between Amsterdam and Columbus avenues, have decided to swap properties.

In exchange for its 106th Street campus, the retirement home will receive both cash and the right to develop a 22-story...

Sales? More Like Snails!

Tue, 13 Oct 2009 15:04:07 -0400

The commercial real estate cataclysm has proven false yet another real estate truism: the long-held belief that even in the most desertlike of investment sales markets, at least 1.6 percent of the 27,649 elevator and walk-up apartment buildings and retail condominiums and office buildings in Manhattan will sell every year, thanks to unavoidable (and generally unfortunate) reasons like death, divorce and the dissolution of business partnerships.

No longer.

“We’re going to break through that 1.6 percent...

The Value of a Building These Days

Thu, 08 Oct 2009 12:54:11 -0400

One of the most frequently speculated about and most difficult statistics to quantify in our marketplace has been the drop in Manhattan’s commercial real estate sales values. Thus far in 2009, a lack of abundant data points makes this difficult, and I have read estimates ranging from 20 percent to 70 percent. Ironically, both ends of this range are partially correct. The reason for this is that we must conduct this analysis utilizing market...

Real Estate Titans Gather, Express Commercial Confidence

Wed, 07 Oct 2009 09:00:06 -0400

Amid increasingly apocalyptic prophecies about the fate of New York’s commercial property market, more than a dozen “Masters of Real Estate” convened at the Metropolitan Club on Tuesday for an eponymous conference hosted by The Observer devoted to making sense of the market’s troubles. The major players appear to have emerged from the recessionary trenches leaner, shell-shocked, and hungry for deals, though some panelists were more upbeat than others about the prospects for...

Memories of the Way We Were … Hopeful Stats a Year Since Lehman

Tue, 06 Oct 2009 15:30:04 -0400

There are lots of memories—many of them apparently traumatic—in that glass-encased and forever under-heated back room at Michael’s, the midtown power lunch-counter where Cushman & Wakefield executives host quarterly market briefings for the press.

“It’s hard to believe, but it was about a year ago when we came here, and we didn’t know what was going on,” reflected Ken McCarthy, Cushman’s managing director for research, on Tuesday morning.

Mr. McCarthy was right. It kind of is...

The Wunderkind at 30

Tue, 06 Oct 2009 10:27:43 -0400

When Will Silverman finally realized that his chosen path as an investment banker was not all that was promised, he simply made a decision to change careers—and never looked back.

With no experience to speak of, Mr. Silverman fled a high-paying job at JP Morgan Securities in 2002 and set his sights on the real estate industry, particularly on a job as an investment sales broker at Insignia/ESG.

Thanks to an acquaintance with Insignia’s then-CEO, Stephen...

The Letterman Fan

Mon, 28 Sep 2009 17:49:47 -0400

Brian Ezratty had only been a broker for eight short years when he inked one of those once-in-a-lifetime fantasy deals that people tend to read about in the papers and then later wonder what would’ve happened had the sale not been successful.

In this case, it was a deal that not only established Mr. Ezratty as a premier broker at Eastern Consolidated, but may have also been a key ingredient in the revival of Times...

The Center Holds

Mon, 28 Sep 2009 10:49:38 -0400

The Commercial Observer: What’s happening at Brookfield?

Mr. Clark: We’ve just gone through a period of working to both preserve and enhance our liquidity. We’ve been working through some refinancing, and we did a very large equity raise of over a billion dollars. We did a $200 million preferred shared issue. We did it for two reasons. One, we wanted to have lots of liquidity in order to both make sure the...

A Rolling Loan Gathers No Loss

Tue, 15 Sep 2009 12:55:37 -0400

Editor's note: Concrete Thoughts is a new weekly column for The Commercial Observer by Robert Knakal, chairman of Massey Knakal, a leading New York investment-sales firm. This is the first column.

For nearly 18 months now, one of the hottest topics of discussion in commercial real estate has been the status of delinquent loans and distressed properties. In the New York City investment sales market, we have seen both property values and the volume...

The Cousins Durst

Tue, 15 Sep 2009 08:00:34 -0400

Commercial Observer: What have you been up to since stepping down as co-president?
Douglas Durst: I’m starting to step away and attend less meetings and come in a little later and that’s been terrific. My father taught me that you go for cocktails and then you have somebody say ‘I just saw him over there,’ and then you sneak out. That hasn’t changed.

Do you expect to have more free time?
Douglas...

Report: Commercial Real Estate Should Sit Tight--It's Gonna Be a While

Thu, 10 Sep 2009 07:43:43 -0400

What is the congenitally optimistic real estate professional to do when confronted with a Moody’s report entitled thusly: “For CMBS, Recovery Appears Through a Glass, Darkly – and Slowly.”

Apparently, so downcast was Moody’s senior VP Daniel Rubock that he had to resort to poetic language – and, later on, a LeBron James metaphor! – to articulate his predictions. And his conclusion? A rebound in commercial real estate “will not be any time soon.”

The 10 Most Expensive Buildings, Revisited

Tue, 25 Aug 2009 16:06:57 -0400

In April 2007, during those blindered days of economic bluster, The Observer published an article naming New York’s 10 most expensive towers, according to prominent real estate professionals. They agreed on the most valuable single building: the GM Building. That rocket of marble and black glass, considered then and now the most coveted skyscraper in Manhattan, if not the country, was, said one, “worth $4 billion–plus.”

Sure! Why not? The building sits at that delicious...

Manhattan Apartment Building Sales Drop Like a Beer Bottle From the Fire Escape

Thu, 20 Aug 2009 15:52:59 -0400

The multi-family sector of the real estate market is often described as the healthiest of the commercial bunch.

Insomuch as there is, in fact, the occasional transaction, that description holds water. Especially when compared to the office-building market, which, as CB Richard Ellis recently reported, saw a measly three transactions of greater than $30 million in the first half of 2009.

But comparatively healthy is in no way synonymous with healthy, as a recent report by...

The Rise and Falling of New York's Busiest Building Buyer

Mon, 17 Aug 2009 11:50:54 -0400

Two years ago, Broadway Partners was an empire on the march.

They owned some of the country’s best Class A office properties—the 62-story Aon Center in Los Angeles, One City Centre in Houston, 522 Fifth Avenue in New York—but they were always searching for more. Led by founder and CEO Scott Lawlor, the faster their real estate empire grew, the faster Broadway scrambled to conquer even more office buildings from California to New ...

Bearish Before It Was Cool

Tue, 11 Aug 2009 11:13:06 -0400

Location: Do you ever get bored waiting for the market to recover?
Mr. Kuhn: God, this is great! I don’t get bored waiting for the market to recover. I go look for opportunities! This is the greatest mining time we’ve had in the last 10 years. … And if you’re a tenant-rep broker, and I’m not, tenants now feel the market is at the bottom. I think the economic statistics indicate we’ve sort...

Sheffield Residents Plan to Party as Fortress Takes Over the Sheffield from Swig

Fri, 07 Aug 2009 08:20:13 -0400

Residents of Sheffield57, perhaps the most ill-starred condo conversion in recent history, are "euphoric" that developer Kent Swig and his junior partners on Thursday formally lost control of the project they began four years ago.

"We’re going to have a number of celebrations," said Larry Wagner, a condo owner and former Nomura CFO. That series of bashes will include a celebration in September at Kennedy's across West 57th Street. (We're willing to bet that never...

TIAA-CREF Steps In on $145 M. Refinancing for SL Green's Graybar Building

Wed, 05 Aug 2009 14:46:58 -0400

TIAA-CREF—the professors’ insurance company—has provided $145 million in loans for the Graybar Building, SL Green’s midtown trophy at 420 Lexington Avenue, atop Grand Central Station. It refinanced $100 million in loans and provided an additional $45 million, producing approximately $23 million in net cash proceeds.

SL Green acquired a leasehold for the 31-story, 1.5-million-square-foot, Class A building in 1999. It also took in several loans, two of which were quite hefty: $35 million from...

Bankers at the Gates! Joe Moinian's Empire Invaded

Mon, 03 Aug 2009 13:48:53 -0400

...

Buy This 23-Story Looker Now!

Wed, 29 Jul 2009 15:54:16 -0400

You can have it if you want it ... and have $105 million to spend.

The dun-colored, 23-story 475 Fifth Avenue, which lender Barclays Capital earlier this year took back from Westbrook Partners and embattled developer Joseph Moinian, is now quietly letting it be known that it will part ways with the office tower for the aforementioned sum, say industry sources.

Mr. Moinian and Westbrook closed on his purchase of the building on April 2, 2007,...

A New Paradigm in Manhattan Skyscraper Pricing

Thu, 23 Jul 2009 15:21:12 -0400

Sigh. What would we do without all of these market reports to brighten our day?

The latest is a dreary one indeed and comes by way of the Capital Markets Group at Cushman & Wakefield, headed by Scott Latham, Jon Caplan, Yoron Cohen and Richard Baxter. Much of the report dealt with the same issues addressed in Cushman's second-quarter breakfast last week. But there were some new stats (or maybe just ones we didn't notice...

Finally! George Comfort Clinches Worldwide

Wed, 22 Jul 2009 16:34:34 -0400

At long last, after one of the longer courtships in recent history, George Comfort & Sons has completed its purchase of Harry Macklowe's old Worldwide Plaza, at 825 Eighth Avenue.

Last month, after it was publicly revealed that George Comfort was in contract for the 47-story office complex, after George Comfort and its investment partners had made a very large (between $50 and $100 million) deposit, and after a closing date had been set for...

The Busiest Man in New York Real Estate

Tue, 21 Jul 2009 19:34:16 -0400

Gary Barnett wrote a letter. It was nine paragraphs and it circulated earlier this year to people like Michael Bloomberg, David Axelrod and Larry Summers.

“Even someone with a good job today is afraid to spend, because he is afraid he will not have a job a few months down the road.”

Mr. Barnett, the prolific president of development concern Extell, then offered a policy prescription for encouraging business amid what was just...

Recession Renders Uptown Even More Peripheral as Building Prices, Sales Plunge

Fri, 17 Jul 2009 08:56:12 -0400

On the south side of 97th Street, between Second and Third avenues, sits a four-story red brick building with a compromised foundation that could be yours, for a mere $1.275 million. Tear it down – you will have no choice, thanks to those foundation issues – and you could build an 8,679-square-foot residential building. Include a community facility and you could build much taller.

Massey Knakal broker Shimon Shkury is marketing the site, and...

Report: JPMorgan Putting One Chase Manhattan Plaza on the Block

Mon, 13 Jul 2009 11:16:32 -0400

JPMorgan is planning to sell its soaring aluminum and glass skyscraper called One Chase Manhattan Plaza, according to a report in the July 13 issue of trade magazine Real Estate Finance & Investment.

JPMorgan Chase wouldn't comment on the report—which is interesting, because when The Observer first asked the bank about the rumor on March 26, a spokesperson flat-out denied it. Same story on a couple other occasions in May.

So what gives? Unclear. But here's...

Office Menschmark: Holliday Takes a Measure

Tue, 07 Jul 2009 10:54:01 -0400

Location: When do you see the real estate market recovering?
Mr. Holliday: Recovery in rents is going to happen when there is competition for space.

When do you see that happening?
I hope soon. It’s hard to project or put too much conjecture into when exactly that will occur. I look at things more trend-based. And I feel that’s going to happen sooner than later. In the near term. So whether that’s 12,...

Deutsche Say No! Spurned Suitor Still 'Ready, Willing, Able and Eager' To Buy Worldwide

Wed, 24 Jun 2009 14:25:23 -0400

Deutsche Bank may have unceremoniously kicked would-be Worldwide Plaza buyer George Comfort & Sons to the curb on Monday afternoon—to the shock of nearly everyone involved—but the spurned suitor will not be deterred. George Comfort & Sons just released the following statement to The Observer via their spokesman at Rubenstein (no relation to this writer):

Despite a report that the deal to buy Worldwide Plaza has collapsed, the investment group in contract to purchase...

Are Asian Investors About to Storm Manhattan Real Estate? AIG Deal Suggests Yes!

Thu, 11 Jun 2009 07:45:41 -0400

Tuesday's blockbuster news that a Korean investment bank and local developer Young Woo are in contract to buy AIG's two skyscrapers downtown begs the question: Is Asian money the next wave to hit New York commercial real estate?

"It is definitely a trend," said Yoron Cohen, executive vice president of Cushman & Wakefield's New York capital markets group. "We have quite a few Asian groups looking at stuff that we have for sale."

And who can...

Scary! Number of Manhattan Building Sales Expected to Plummet 68 Percent

Thu, 28 May 2009 12:59:06 -0400

2009 is going to be an even sleepier year for Manhattan building trades than 2008, according to a report released Thursday morning by commercial real estate brokerage Massey Knakal, which specializes in mid-market investment sales.

"Annualized sales figures suggest that 2009 will see a 59 percent decline in total dollar sales volume and a 68 percent decline in the number of sales," reads the report covering Manhattan south of 110th Street on the West Side...

The Top Commercial Real Estate Deals of Early 2008 and Early 2009

Wed, 13 May 2009 12:14:12 -0400

As part of a larger package on the New York office market in these crazy, crazy times, I wrote in this week's print Observer about the biggest commercial deals of 2009 so far. Basically, they're a rather bland lot and clash with the generally hopeful vibe understandably propogated by commercial sales brokers.

Here are the Top 10 commercial real estate deals in both the first quarter of 2008 and the first quarter of...

Biggest Commercial Deals: Significant Shrinkage

Tue, 12 May 2009 12:22:13 -0400

Perusing statistics on the city’s biggest commercial property deals is like going to the Empire State Building’s observation deck with tourist friends from out of town: You know it’s supposed to mean something, but New York can be so much cooler.

The statistics underline just how far New York’s property sales market has fallen, and not just since Lehman Brothers’ September 2008 collapse. The biggest deal in the first quarter of 2009 was CB Richard...

Manhattan's Biggest Commercial Property Investors, Before and After Lehman

Tue, 05 May 2009 13:56:46 -0400

From April through September of last year, the 15 biggest commercial real estate investors in New York traded over $16.17 billion in property. Over the next six months, following the collapse of Lehman Brothers, the new 15 biggest traded around $1.892 billion, or barely one-tenth as much.

It’s not so much the dollar amounts—everyone knows things are bad—it’s who’s doing the spending. Gotham’s bigger property gobblers are increasingly domestic, privately held and from around these...

Hell Hath Frozen Over: A Garment District Building Sells for $45.3 M.

Thu, 12 Feb 2009 10:04:45 -0500

In a feat of extraordinary real estate prowess, a building in the Garment District has actually been sold, and for the totally respectable price of $45.3 million.

Said building, 488 Seventh Avenue, rises 13 stories in the Garment District, at 36th Street. The buyers are, according to city records, a group called Torkian International, and the seller is an entity called Swift Park based on East 61st Street. At 78,200 square feet, according to research...

For Under-$100 M. Investment-Sales Set, Rough Seas Ahead

Wed, 28 Jan 2009 12:14:36 -0500

Massey Knakal chairman Bob Knakal emailed the above gem last night. It charts the expectations for the New York investment-sales market for properties $100 million and under. Basically, sales volume will decline in 2009, and the turnover in property stock will decline with the unemployment rate.

It's tough out there. Sayeth Mr. Knakal: "The sales volume of investment properties in New York City in the under $100,000,000 market is approaching its all-time low level."

More...

The Dismal Commercial Market, One More Time with Feeling

Mon, 26 Jan 2009 11:25:05 -0500

Yet more scientific-looking numbers demonstrating that the real estate market is a horror show. If you work in real estate, you already know this: intuitively, personally, anecdotally. Now, yet another barrage of numbers to help you know it statistically.

Cushman & Wakefield's Capital Markets Team -- led by the dapper quartet of Richard Baxter, Yaron Cohen, Jon Caplan and Scott Latham -- has put out its fourth quarter review.

Here are some of the best...