Dana Rubinstein

In case you're not yet numbed to bad economic news, here's some more.

RCA Analytics has released its latest global trends report, and it concludes that global investment sales are--suprise, surprise!--tanking:

"Sales of significant commercial properties worldwide totaled $388b (€254b) through August, representing a 57% decrease compared to same period in 2007."

Nice! Even better, "The pace of transactions continues to slow and preliminary data for Q3’08 shows an even steeper decline of 64% from Q3’07."

Here are some of the report's other conclusions:

First, we should expect a lot more properties to come on the market, either through distressed sales, or companies looking to shore up their balance sheets:

"The failure of Lehman Brothers and the government bailout of AIG may bring a multi-billion dollar flood of new offerings to the market.

 read more »

A firm called Endland LLC has purchased two 26-story apartment buildings at 251 Cherry Street on the Lower East Side for $170.8 million, according to city records.

Endland LLC, an entity affiliated with Pembroke Companies, bought the buildings from Helen Drew on Sept. 24.

On its Web site, Pembroke describes itself as "a privately held real estate investment, development and management firm. Pembroke makes significant, usually lead investments in both public and private real estate companies, whose portfolios include multifamily residential properties, net lease retail and shopping centers, industrial properties and other mixed-use properties."

Calls to Pembroke's founder were not immediately returned.

Pembroke got some press earlier this year when it sought to purchase the 200-unit, Mitchell Lama Trinity House, on the Upper West Side.

Barclays Capital has fired Mark Walsh, the man in charge of Lehman Brothers' commercial real estate investments, along with nearly all the rest of Lehman's commercial-mortgage-backed securities team, according to the trade mag Commercial Mortgage Alert.

Mr. Walsh has often been described as the "man behind the curtain" who made Lehman Brothers loads of money during the heyday of the CMBS market, but also as a man who took far too many risks and ultimately played a significant role in Lehman's demise. Indeed, Mr. Walsh financed Tishman-Speyer's ill-conceived $22.2 billion acquisition of Archstone-Smith, a luxury apartment building portfolio that has since been devalued; and financed SunCal's $110.2 million purchase of a 2.25-acre plot of land in Southern California.  read more »

It doesn't say much about our learning curve, but as frightening as all of this economic news seems, we've been through it all before. More than once.

GVA Williams broker and history buff Richard Warshauer and political historian James Kaplan, also an attorney, will lead this year's 20th annual financial history tour of Lower Manhattan, sponsored by the Museum of American Finance, on Oct. 25 at 1 p.m.

The tour promises to commemorate "the Great Crash of 1929, the Panic of 1907 and the 1987 stock market collapse, as well as [delve] into the political, financial, real estate and architectural history of Wall Street and New York City. The tour shows that despite such adversities as the Great Fires of 1776 and 1835, financial panics of the 19th century, the 1920 Wall Street explosion, the Crash of 1929, the stock market collapse of 1987, the terrorist attack of September 11, 2001 and the mortgage crisis of 2008, New York and Wall Street have always recovered their position as the world’s financial capital."

Here's the full release below:  read more »

Mid-market brokerage Massey Knakal has cut its team of brokers from 63 to 46, according to The Real Deal:

"The latest round of cuts was last month. Compared to the start of the year, the number of agents in Brooklyn and Staten Island has dropped to 14 from 21; and Queens and Nassau has declined from 15 to eight, Massey said. Manhattan, the Bronx and Westchester has fallen by three to 24 brokers."

Paul Massey, CEO and co-founder of the brokerage, told the real estate monthly that the cutbacks had nothing whatsoever to do with the dramatically tanking economy--and the dramatic dip in the volume of investment sales.

"Everyone will think this is in reaction to economic externalities, but the planning for the growth in territory size has been going on all year," he told The Real Deal.

We are incredulous.  read more »

Oh, NBC Universal! When ever will you make up your mind?

At this morning's CB Richard Ellis third quarter breakfast, Global Chairman Steve Siegel ticked off a bunch of pending deals, including NBC Universal's negotiations to take 200,000 square feet of space in Midtown. Reporters took note. What a tantalizing hint!

Turns out, Mr. Siegel wasn't far from the truth.

NBC Universal, which recently took two floors of "swing space" at 75 Rockefeller Center, is also in talks with reps from 1633 Broadway and 1271 Avenue of the Americas to take a short-term, 200,000-square-foot lease at either, according to two knowledgeable sources. NBC may also take more temporary space at 75 Rock.

All of this shuffling around would be in preparation for NBC Universal's consolidation of its business operations into one, over 600,000-square-foot, permanent location (possibly at Worldwide Plaza).

We know this is confusing. NBC's internal memo from last week explains it well:  read more »

So much for hitting the brakes.

Sam Chang, New York's hotelier for the common man, strikes again.

This week he filed an application with the Buildings Department to build a 25-story hotel at 54 West 36th Street, between Fifth and Sixth avenues, near Herald Square.

This will, of course, be the gazillionth hotel Mr. Chang has built in New York over the past few years - a pace The Real Deal in December 2006 dubbed "dizzying":

Christyne Nicholas, the city's tourism czar, estimated that Chang is building 3,000 out of the 5,000 rooms under construction in the city. An analysis by The Real Deal that looked at Chang's longer-term plans through 2008 found even more units in the pipeline -- some 5,900 units out of approximately 13,000 units planned in the city.

 read more »

Calm down! That was the message CB Richard Ellis honchos impressed upon reporters at this morning's end-of-third-quarter breakfast, at which the brokerage released a "Supply & Demand Special Report."

"Everybody's knee-jerk reaction this month has been wrong," said Simon Wasserberger, senior vice president of CBRE's New York tri-state region consulting group, referring to predictions that the demise of Lehman and other banks would dump massive amounts of sublease space on the market, causing big vacancy rate increases and sizable rent declines. "People underestimate the stability of Manhattan rents."

Mr. Wasserberger went on to argue that Manhattan is incredibly supply constrained. At most, there will be 7 million feet of new construction in the next four years, which, in addition to whatever sublease space comes on the market, will comprise merely a drop in the bucket that is New York's 400 million-square-foot marketplace.  read more »

A London-based bond management firm has established a beachhead in New York with the leasing of the entire 37th floor at 444 Madison Avenue.

Rogge Global Partners, which also has offices in Connecticut and Singapore, will use its chichi new digs to house the 11-member high-yield team it recently bought from ING. The firm will pay in the high $80s annually for each of the 5,455 square feet.

In exchange, the bond managers will get two months of free rent and prebuilt space.

CB Richard Ellis’ Paul Amrich, Patrice Hayden, and Elie Gross represented landlord Westbrook Properties. The firm was repped by CBRE’s William Iacovelli.

drubinstein@observer.com

Trevor Day School needs more space. This year, the posh private institution accepted just 9 percent of the 450 pre-kindergarten applicants whose parents were clamoring to burn through $25,000 a year on their tykes’ ABCs. So the school has embarked on an ambitious expansion plan that would require the creation of a new building on the Upper East Side.

Trevor Day School’s nearly 800 students are now dispersed at two different campuses on either side of Central Park. The little ones study in a school-owned townhouse on East 89th Street and in the nearby Episcopalian Church of the Heavenly Rest.  read more »

Civilian horse-lovers were not the only New Yorkers to mourn the departure of the more-than-100-year-old Claremont Stables from the Upper West Side in 2007. The longest continuously operating stables in the city, at 89th Street and Amsterdam Avenue, Claremont had also been home to a handful of the Parks Department’s Mounted Patrol horses, which carried enforcement officers through Central Park, frightening would-be muggers and posing for pictures with tourists.

Following the stables’ funereal closure that April, those horses, including a sweet-tempered chocolate-brown equine named Monty, were relocated to less glamorous environs in places like the Bronx and Staten Island.  read more »

It was a dour Tuesday morning at Michael’s, as Cushman & Wakefield brokers and their assorted guests gathered in the back room for the third-quarter office market analysis and scrambled eggs with chives on top.

Joseph Harbert, Cushman’s chief operating officer for the New York region, spoke in somber tones, grasping repeatedly for something called “historical perspective” in order to make sense of the ordeal, or at least lessen its apparent magnitude.

The numbers told a stark tale of increasing vacancy rates, dropping rents, and negative absorption.

In Manhattan overall, leasing activity dropped 14.4 percent compared to the third quarter of 2007.  read more »

The Indiana limestone-encrusted Cunard Building at 25 Broadway, which the city calls one of “lower Manhattan’s most architecturally and historically significant edifices” in its landmark designation report, has a new tenant.

The Borough of Manhattan Community College has signed a lease for the more than 40,000 square feet on the eighth floor in the 22-story confection, built by the Cunard Steamship Line for its headquarters in 1921 on what was once known as Steamship Row.

BMCC, one of the lesser-known Sept. 11 victims, could certainly use the space. In 1993, Miles and Shirley Fiterman donated a 15-floor, 375,000-square-foot office building at 30 West Broadway to the school, perhaps the largest private donation ever made to a community college in the United States at the time.  read more »

The self-immolating spectacle of Wall Street has cast a paralytic spell over Manhattan’s commercial brokerages. Buildings don’t trade. Leases don’t close. Real estate professionals take extended vacations. Only a few brokers have resisted the spell. They are this year’s power brokers.

The contingent of eight selected this year is by no means all inclusive. It is, however, representative. It includes three brokers who, at the start of 2008, were extraordinarily well placed to survive the storm and used their contacts and reputation to rise above the turmoil—Eastdil’s Doug Harmon, and CB Richard Ellis’ Paul Amrich and Richard Hodos. All three work at the top of the market and have continued to do so, the spectacular economic meltdown only mildly throwing them off their game.  read more »

Mort Zuckerman, the chairman of Boston Properties whose months-long economic doomsdaying was vindicated this September with the demise of Wall Street, has put on his prognosticator of prognosticator hat yet again, this time in an appearance on Intelligent Investing with Steve Forbes.

Here are some excerpts from the conversation (you can find the whole transcript here):

First off, Mr. Zuckerman thinks the $700 billion bailout sucks:

I don't believe that they should be doing it that way. I think they should be taking an equity position....Now, if [bankers, et.al.] can take up that much money on the way up they should take whatever the cost is on the way down. And it is not, it is absolutely a joke to say that their salaries are going to be constrained or their parachutes, golden parachutes, are going to be restricted.

Mort thinks John McCain blew a crazy good opportunity when he decided to support the bailout:

If John McCain had wanted to win the election, he could have sat there at that debate and said, 'This is an outrage. We should not be bailing out the very people who got us into the trouble. If we do anything, we should buy equity into the companies so that we can participate and let the shareholders pay.' If he had said that he would win the election.

Mort says the GM Building was a sweet deal, no matter what the critics say:

We were able to buy the General Motors building at a price that was roughly 20% below what it would have been the previous year. ... We have a very long-term view of these kinds of assets. We're at this stage, we bought that building with a minimum of a 5% yield that will go up every year. It's not the greatest yield, but virtually every, there was a huge gap between the current rents and the market rents. A huge gap. And so as these things rollover over time it will yield to us, in our judgment, the highest internal rate of return of any acquisition we have ever made or probably ever will make. So we think that's a wonderful asset.  read more »

The national debt has grown so exponentially that the Durst Organization, which maintains the National Debt Clock in Times Square, will revamp its ticker to accommodate 14 digits, or more than $10 trillion, according to CNN.

"$10 trillion is a number that would just be beyond my father's imagination back in 1980," said Douglas Durst, CEO of the Durst Organization and "keeper of the clock," whose father Seymour in 1989 created the digital debt-tracker, basing its numbers on U.S. Treasury data.

In 2000, when politicians began driving down the national debt, Mr. Durst temporarily turned off the clock, saying that the rapidly dropping numbers were causing confusion amongst passers-by. But Mr. Durst was prescient, telling CNN at the time that he doubted the clock would be turned off for long.

"We'll have it ready in case things start turning around --which I'm sure they will," Mr. Durst told CNN at the time. "The politicians will do what they have always done and start spending more than we can afford."

Which brings us to today, October 2008.  read more »

Bob Knakal, chairman of Massey Knakal and master of the under-$100 million commercial property transaction (which, believe it or not, is considered small potatos in New York), just closed his 1,000th deal.

Said deal was the sale of an Upper East Side parking garage at 301 East 69th Street for $5.4 million.  read more »

Two small Hell's Kitchen buildings, a one-story edifice and its four-story next-door neighbor, traded for $36.6 million, according to city records.

An entity called 400 Times Square Associates, affiliated with the Landis Group, snagged the buildings, at 571 and 573 Ninth Avenue, between 41st and 42nd streets, from the Washington Beef Company of New York in August -- way before the credit crisis paralyzed the commerical real estate market.

The purchaser could not be reached for comment.

Yesterday at noon, Marc Chini, NBC Universal's executive vice president of human resources, sent out a memo updating employees on the media giant's closely watched search for a 600,000-square-foot office space in which to consolidate its business operations.

NBC's search for such a huge chunk of space has for months riveted the commercial real estate industry, which has found itself hamstrung by the credit crisis. NBC finds itself one of the few tenants out there actively kicking the tires and seriously looking to sign a lease before the end of the year. And there's little question that whichever landlord gets the deal will have scored a very, very prestigious tenant.

According to this memo, a decision will be forthcoming soon.

The full memo is pasted below:  read more »

Here's the latest article to question the wisdom of Tishman Speyer forking over a record-setting $5.4 billion for Stuyvesant Town and Peter Cooper Village in 2006. And this article features something more than mere speculation -- actual numbers!

According to Bloomberg, when Standard & Poor's "downgraded ratings on 22 classes of commercial mortgage-backed securities related to the properties," the ratings agency explained that, "Stuyvesant Town is now worth 10 percent less than what Tishman and BlackRock paid two years ago."

S&P downgraded the securities because Tishman Speyer hasn't been able to deregulate as many of the complex's 11,200 units as quickly as originally predicted:  read more »

Israeli banks are growing increasingly fearful that Lev Leviev's Africa-Israel--owner of the old New York Times building and other New York City trophies--will be unable to repay the more the $4 billion (or 14 billion shekels) he's taken in short- and long-term loans, according to an article in today's Haaretz:

"Lev Leviev's Africa Israel Investments owes Israel's banks more than NIS 14 billion in long-term and short-term liabilities, and the bankers are evidently growing nervous about the huge amount. Within days the two biggest lenders, Hapoalim and Leumi, are expected to receive rights to yet more shares in the Africa Israel parent company to secure the debts."

 read more »

The story was reported by Max Abelson, Eliot Brown and Dana Rubinstein; and written by Ms. Rubinstein.

New York's real estate community doesn't just love Mayor Bloomberg. It lurves him. And it's greeting the news of his third-term bid accordingly.

A sampling:

"Love him," said developer and landlord Alex Sapir. "Let's keep him forever."

"It's the best news I've heard in years," said residential superbroker Michelle Kleier, president and chairman of Gumley Haft Kleier.

"I can't think of anyone who's done more for New York... in my lifetime," said Howard Lorber, chairman of Prudential Douglas Elliman owner.

"I think he's the greatest mayor we've ever had," said Douglas Durst, of the Durst Organization. Mr. Durst even thinks President Bush should call Mr. Bloomberg down to Washington to "straighten out the financial mess."

"I think the country needs him more than the city does," he said.

Thirty-something Dumbo developer Jed Walentas called Mr. Bloomberg, "the best mayor New York has had - certainly in my lifetime."

And Donald Trump said he begs the mayor ("Michael," to him) to run whenever they meet.

"Any time I see Michael I say, please run," Mr. Trump said. "I don't want to get into the details, but any time I see him. I think it's very important."

So what gives? Why all the love for Massachusetts' own, Michael Bloomberg?  read more »

The Convent of the Sacred Heart School of New York, perhaps the city's most elite Catholic school and owner of the sublime building above, has closed on a much less attractive edifice down the street in which to implement a long-planned school expansion.

The school, which educates the girls of New York's Catholic elite for more than $30,000 a year, is housed in two former mansions at One East 91st Street, at the corner of Fifth Avenue, but has long sought to expand:  read more »

Mark Walsh entered 2008 as a Svengali of numbers. He headed Lehman Brothers’ commercial real estate investments, which put him at the helm of a chugging ship that spouted billions in liquid cash for deals locally and nationwide.

It was the pinnacle of a career that began 20 years before, just as Wall Street was recovering from the crash of late 1987, when Mr. Walsh, a young Fordham law school graduate scored a job at Lehman.

Mr. Walsh had worked a few years as a lawyer before finding his way to the investment bank with pre-Civil War roots. But, once arrived, he rose quickly.  read more »

The empty storefront is the new bank branch.

With Citigroup’s acquisition of Wachovia and JPMorgan Chase’s Washington Mutual takeover, more storefront bank branches citywide will come into play, according to retail brokers. (Washington Mutual alone has 148 branches in the five boroughs.) Much like the bank consolidations of 1991 and 1996, when Chemical Banking Corp. merged with Manufacturers Hanover Corp, and then Chase purchased the resulting conglomerate, some of those bank branches will close.

Pity the landlord who just signed a new bank branch for his ground-floor retail space. 

“What happens with those leases that were just signed?” said a frustrated Faith Hope Consolo, chairwoman of the retail leasing and sales division at Prudential Douglas Elliman, who said she has been deluged with calls from landlords frantic for information.  read more »

Calvin Klein will launch a brand-new line of home furnishings by temporarily taking over one of the new Gwathmey Siegel-designed townhouses at Soho Mews. He’s dubbed it “the Calvin Klein Townhouse at Soho Mews.”

While the fashion house already sells linens, including its Organic Cotton Flowers and Petal King collections, this is the first time that Calvin Klein has ventured into the furniture business.

“For many years we’ve been wanting to get into the furniture business to really round out our home lifestyle product,” Tom Murry, Calvin Klein Inc’s. president and CEO, told Furniture Today. “This is a little more complex business to get into than some of the others.  read more »

On Sept. 15—while the rest of the world was preoccupied with the demise of Lehman Brothers, Bank of America’s acquisition of Merrill Lynch and AIG’s request for a government loan—at least two parties in this city went about business as usual.

Anbau Enterprises bought the diminutive, five-story 124 West 23rd Street from Franpearl Equities Corp. for $19.3 million. The building last traded in 2004 for $10.6 million.

Stephen Glascock, a principal at Anbau, said that given the turmoil on Wall Street, he feels fortunate to have his financing from Bank of New York Mellon locked in place.  read more »

The newsroom of the recently deceased New York Sun took a star turn in 2006 when it served as a setting in the Hollywood blockbuster The Devil Wears Prada.

In the film, the main character, Anne Hathaway’s Andy Sachs, has decided to leave the corrupting and cynical influences of the fashion biz to follow her true passion—in the corrupting and cynical world of the newspaper biz. We see her meeting with an editor in the paper’s appropriately disheveled offices, a rolodex on his desk, papers piled high behind Ms. Hathaway’s head, light streaming through the arched windows.

Now, with the demise of New York’s only right-leaning daily broadsheet, those offices will take yet another star turn on some broker’s office vacancy list.  read more »

Location: Since you bought Harlem’s Delano Village, now called Savoy Park, in 2006, how many of its 1,800 apartments have been deregulated?

Mr. Rubler: None. Or, under 10. I mean, occasionally, an apartment will achieve a legal rent that’s over $2,000, which, at least under today’s regulations, means that it’s technically deregulated, but it’s never a part of our business plan to deregulate apartments. Specifically, it’s part of our plan to keep 100 percent of our apartments within rent stabilization.

 
The New York Times reported that last year when you refinanced Savoy Park, it was underwritten for an ultimate cash flow of $19.  read more »

On Sept. 15, while the rest of the world was preoccupied with the demise of Lehman Brothers, Bank of America's acquisition of Merrill Lynch, and AIG's request for a government loan, at least two parties in this city went about business as usual.

A buyer affiliated with Anbau Enterprises bought the diminutive, five-story 124 West 23rd Street from Franpearl Equities Corp. for $19.3 million. The building last traded in 2004 for $10.6 million.

According to Anbau's Web site, "The plan is to construct a new 16-story building containing approximately 34 luxury residences, each with high-quality finishes and attractive city views. Anbau is set to deliver unique, flexible spaces tailored to this vibrant community.  read more »

The Observer got an inside look at the Gwathmey Siegel-designed Soho Mews project on Thursday, the United American Land project Curbed in June called "the most expensive and pedigreed new development that no one is talking about."

The project encompasses two nine-story buildings, with a shared garden in between, stretching from Wooster Street to West Broadway, between Grand and Canal streets (directly opposite the disappointingly Ramada-esque facade of the SoHo Grand). 

The two buildings house 59 lofts, five townhouses and four penthouses, the largest of which has an asking price of $11.55 million. (The cheapest unit is a two-bedroom, 1,225-square-foot unit going for $2.33 million).

The two buildings, which are getting an inordinate amount of interest from Italian buyers, are a construction site, though work is scheduled for completion by the beginning of '09, but we did get some passable shots of the facade and the awesome views from the penthouses.

"Study for Agony I" is one of four Arshile Gorkys, three William de Koonings, five Barnett Newmans and four Agnes Martins that Kathy Fuld, wife of Lehman chief executive Dick Fuld, has hired Christie's to auction off, according to reports by Bloomberg news and The New York Times.

While the timing would seem to indicate that the auction was an effort to counteract the hit the Fuld family's fortunes have taken on Wall Street -- Bloomberg reports that Mr. Fuld "sold Lehman shares that were worth $247 million a year and a half ago for less than $500,000 last week after the stock price collapsed" -- Ms.  read more »

Brookfield Properties has yet to begin "substantial" construction of a platform necessary to construct its two planned Ninth Avenue skyscrapers, despite earlier statements that the work would begin this past summer, according to Real Estate Weekly.

In February, Brookfield, led by hunky CEO Ric Clark, said work would begin on the platform over the railyard in June, according to The New York Times:

"Despite a flagging economy, Brookfield Properties says it will start work in June on a $600 million platform over railroad tracks near Ninth Avenue, where it plans to build two towering office buildings."

The railyard comprises half of Brookfield's five-acre lot, bounded by Ninth and Dyer avenues, 31st and 33rd streets.  read more »

Not to put too fine a point on it, but fear has stupefied the Manhattan office leasing market. In the wake of the Wall Street meltdown, it is difficult to imagine a slower transaction pace, according to some brokers.

“It’s paralyzed things,” said Mark Weiss, executive vice president and principal at Newmark Knight Frank. “The only deals that are getting made are deals that have lease expirations that are imminent where there is a very, very compelling real estate solution to a tenant’s occupancy needs. Absolutely no discretionary deals are getting made right now.”

Sour tidings also came by way of  read more »

The onetime home of the Old Gray Lady will get some fancy new signage, thanks to a plan put forth by landlord Africa-Israel to erect a 32-foot-long and more than seven-foot-tall sign at the base of the clock tower toward the top of the old New York Times building and to replace the tower’s digital clock face with an analog clock.

The plan, which was unanimously approved by the city’s Landmarks Preservation Commission on Wednesday, would erect the sign in the same spot where the old one once hung, emblazoned with “Times.” The future tenant of the building at  read more »

Finally, the dithering has stopped! New York City’s real estate deciders are at last grappling with the monumental decision at hand come November: Do we want an Illinoisan or an Arizonan in the White House?

It’s taken them a while. Last we checked, in mid-July, campaign finance records showed few developers and landlords had contributed to either McCain or Obama (though plenty had donated to the coffers of hometown favorites Hillary and Rudy). But by late July, it seems they’d finally come to terms with the sorry fact that, barring a Giuliani-led military coup, there will not be a New Yorker in the White House.  read more »

“The rest of the country looks upon New York like we're left-wing, Communist, Jewish, homosexual pornographers. I think of us that way sometimes and I live here.”

That was Alvy Singer in Woody Allen’s Annie Hall. And he knew what he was talking about. Even the developers here lean liberal! Our evidence? The recent campaign contribution disclosures are in.

But first, some history: back when we checked in mid-July, much of the real estate world was still hemming and hawing. With the demise of hometown heroes Hillary and Rudy, they were busy contributing to neither Obama nor McCain.  read more »

“We have seen on Wall Street the cycle of greed turn to fear," said John Powers, chairman of the New York Tri-State Region for CB Richard Ellis, at CoreNet's New York City Market Update luncheon this afternoon. "Now we’re seeing pain. It will be a while before we see hope. And that is the cycle.”

It wasn't the happy-go-luckiest of real estate luncheons today on the eighth floor of the Time Life Building.

As brokers dug into their filets of salmon, Marisa Di Natale, a senior economist at Moody's Economy.com, imparted the harsh truth as she saw it:

"We believe we are in a recession right now and that we have been in a recession since fourth quarter last year,” Ms.  read more »

So says Barry L. Ritholtz, CEO of Fusion IQ and popular talking hea