NYC Real Estate Players Hit Panel to Talk the Future: PHOTOS

The Real DealMay 30, 2014

The Real Deal Publisher Amir Korangy served as a panel moderator earlier this week at the New York Residential Specialist (NYRS) leadership event, held at the Citibank offices in Midtown Manhattan. The panel, titled “What’s Next For New York Real Estate Companies and Agents?” included Barbara Fox of Fox Residential Group; Bess Freedman of Brown Harris Stevens; Ellie Johnson of Sotheby’s International Realty; and Fredrick Peters of Warburg Realty. Life coach Dan Abramson also addressed the group on how to grow their business. First awarded in 2007, the NYRS designation is REBNY’s premier professional credential for residential real estate agents in New York City.  To date, 328 agents from nearly 40 brokerages throughout the city are part of the NYRS network.

New York Property and the Remapping of Manhattan’s Upper East Side

Financial TimesMay 30, 2014

Manhattan’s soaring housing market is shifting the traditional boundaries of some historic neighbourhoods, as New Yorkers increasingly compete with wealthy international buyers for high-end property. Nowhere is the trend more visible than on the Upper East Side, an affluent sliver of the city long known for stately Park Avenue co-operatives and elegant townhouses.


The area traditionally stretches east from Fifth Avenue to Third Avenue and north from the border of Central Park up to 96th Street. Yet property developers, eager to cash in on New York’s real estate resurgence, are adding amenity-filled condominiums to nondescript areas nearer the East River, and less gentrified sections north of 96th Street. The new developments are enticing buyers who, just a few years ago, were less willing to pay premium prices for a property outside the Upper East Side’s long-established borders.


 “Rising real estate prices on the Upper East Side have essentially made it fair game for property developers to build new condos to meet demand,” says Jonathan Miller, president of Miller Samuel Appraisers in New York. “You now have a lot more buyers who aren’t afraid to pay for a property outside of what we’ve come to think of as traditional neighbourhoods.”


One Museum Mile, a 115-unit condominium on the corner of 109th Street and Central Park has a rooftop pool, fitness centre and expansive park views. Designed by the US architect Robert AM Stern, the property broke a local sales record when a penthouse sold for $2,100 per sq ft. The Charles is a glass-and-limestone condominium under construction on First Avenue between 72nd and 73rd Streets, where 15 large apartments, including a penthouse listed for $37.9m, have already been sold.


The expansion of the Upper East Side comes as Manhattan’s property market is reaching record levels. The median price of a condominium in Manhattan rose 13.4 per cent during the first quarter from the same period last year, setting a record at $1.35m, according to a report from Douglas Elliman brokerage.


The flurry of activity at the upper end of the market pushed the number of property sales in Manhattan to a seven-year high for the quarter while sending the average price per sq ft to a record $1,363.


Condominium sales on the Upper East Side itself are also robust. The median price of a condominium in the district rose 17.8 per cent to $1.65m during the first quarter from the same period last year, the Douglas Elliman report showed.


Much of the activity in newer condos is being driven by foreign buyers. Data compiled by Stribling & Associates estimates that international buyers now make up 30-45 per cent of the Manhattan property market. “Most of the record-breaking new condominium sales are due to foreign buyers,” says Cathy Taub, an estate agent at Stribling and Associates. “The overwhelming majority of foreign buyers will look only at new condominium product.” Among the newer condominiums attracting international buyers on the Upper East Side is 151 East 78th Street, a 16-storey development nestled among the area’s stately prewar buildings just east of Lexington Avenue. The property has 14 residences that range from three to six bedrooms and measure between 3,300 and 7,000 sq ft. Units start at $10m, with penthouses at $20m, through Stribling Marketing Associates.


Other high-end condominiums under construction on the Upper East Side include 33 East 74th Street, a 10-unit building with apartments from $14m to $50m, and 135 East 79th Street, with penthouse apartments priced from $18.5m to $28.5m.


Despite a surge in condominium construction, townhouses can still fetch enormous sums on the Upper East Side. In April, the 16-room, Fifth Avenue penthouse on East 77th Street, owned by the late billionaire Edgar M Bronfman, sold for $70m. The price is thought to be a record for a Manhattan co-op.


“There’s still an eagerness among buyers to own a piece of Manhattan history and town houses and co-ops still command quite a bit of attention,” says Oren Alexander, an estate agent with Douglas Elliman. “Prewar buildings in traditional areas of the Upper East Side will always sell well.”


Douglas Elliman is marketing several newly renovated prewar town houses on the Upper East Side. Among them is a five-storey residence on East 62nd Street just off Park Avenue listed for $25m. The brownstone measures 6,000 sq ft and has five bedrooms and six bathrooms. The ground floor has marble flooring, a chef’s kitchen and a dining room that opens on to a fully landscaped garden. The home is being sold fully furnished, with interiors by the British designer Tanja Ellis.

Bond Street Penthouse With Charming Terrace Wants $5.5M

CurbedMay 29, 2014

Nestled away on the starchitecture-dotted Bond Street is this duplex penthouse in a not-so-flashy neighbor. The 2,350-square-foot penthouse at 30 Bond Street somewhat elegantly oozes the downtown loft feel, disguised only by its few wood-clad and faux painted walls. The apartment is offering its three bedrooms, two bathrooms, and one charming private terrace for $5.5 million. And while cavernous lofts have a reputation for low-light, at least this pad has three exposures, the last of which presses up against (sigh) that dreamy 40 Bond.

Real Estate Envy: 7 Gorgeously Renovated Homes

Domaine HomeMay 27, 2014

We’ve seen plenty of renovations gone wrong, and let us tell you: paying a pretty penny for a renovated home that’s not quite your style or is a total #renovationfail is no way to start life as a new homeowner. Here to guide us in the right direction is Alex Brunkhorst, LA-based real estate agent and founder of Bungalux, who’s identified seven beautifully renovated homes around the country and shared her favorite kitchens and baths. Click through for inspiration galore!

7 Glamorous Terraces in NYC Homes

HGTV FrontdoorMay 23, 2014

There's nothing like a great outdoor space to add instant appeal to a New York City apartment, especially if it comes with panoramic views and swanky amenities. Now that warmer weather has finally arrived, we decided to round up some Manhattan and Brooklyn homes with killer outdoor spaces — roof decks, wrap terraces, river views, Manhattan skyline views, outdoor kitchens, irrigation systems and more. Click below if you want seven reasons to pine over al fresco living.

Living in a Housing Conundrum

ReutersMay 23, 2014

The spring buying season is turning out to be lukewarm as tight inventories and rising prices prevent potential home buyers like New Yorker Brigitte Paulick from finding their dream home. 

Living in a Housing Conundrum

The New York TimesMay 23, 2014

The spring buying season is turning out to be lukewarm as tight inventories and rising prices prevent potential home buyers like New Yorker Brigitte Paulick from finding their dream home. Conway G. Gittens reports.

Living in a Housing Conundrum

USA TodayMay 23, 2014

The spring buying season is turning out to be lukewarm as tight inventories and rising prices prevent potential home buyers like New Yorker Brigitte Paulick from finding their dream home. Conway G. Gittens reports.

Living in a Housing Conundrum

Yahoo!May 23, 2014

The spring buying season is turning out to be lukewarm as tight inventories and rising prices prevent potential home buyers like New Yorker Brigitte Paulick from finding their dream home. Conway G. Gittens reports.

Living in a Housing Conundrum

AOLMay 23, 2014

The spring buying season is turning out to be lukewarm as tight inventories and rising prices prevent potential home buyers like New Yorker Brigitte Paulick from finding their dream home. Conway G. Gittens reports.

For a Slightly Reduced $12 M., Mercer Street Penthouse Triplex Goes Live Once More

New York ObserverMay 22, 2014

Veracity Development has grown slightly less bold in their asking price for the 3,000 square-foot, three-bedroom penthouse at 111 Mercer Street, the cast iron building between Price and Spring Streets that it reconfigured as (surprise!) luxury loft condominiums. But only slightly. Between 2012 and February of this year, the unit was listed with Douglas Elliman, asking $12.5 million.


While the building’s other units, also under the auspices of Douglas Elliman, sold out, the penthouse, whose construction lagged a bit behind, failed to find a buyer based on renderings and floor plans alone. Veracity’s forlorn penthouse went off the market for a few months, during which time CORE’s Emily Beare and Christian Rogers were tapped for rescue operations. (OK, very low level rescue operations.)


“We’re small,” Ms. Beare, whose listing asks $12 million even, recently told the Observer. “We don’t have a million properties and television shows and everything else. So we can really focus on the listing. We’re very excited to be working on this property.” The triplex has three distinct terrace spaces at two different elevations, the higher of which is equipped with an outdoor kitchen, a feature which, much to our surprise, some people actually use, according to the broker. “Oh, people absolutely use them!” she said, aghast in a good-humored way at our skepticism. “It’s very much appreciated, especially in a case like this where your indoor kitchen is on another level. You don’t have to be running up and down.” Fair enough.


The apartment’s ample outdoor space, she predicted, will also prove much more alluring now that prospective buyers can actually stroll along its balustrades and gaze upon the alfresco fireplace, from which the World Trade Center is visible. The interiors, too, are highly attractive. “People love conversions,” Ms. Beare said. (Somehow, we’ve been getting that impression lately, too.) “The building has that old, solid architecture. It feels good, and you also get to live in this very very modern space with all the modern niceties.”


The kitchen is equipped with Calcatta Gold marble counters and a built-in espresso machine, in the unlikely event that the eventual owners ever want to brew their own coffee. There is a “grand” master suite featuring a wood burning fireplace (Get ‘em while they’re hot!), and a “discrete” virtual doorman. You will find none of those gossipy robot types at 111 Mercer. No sir. And if the comforts of home are not enough, building residents enjoy access to amenities at the nearby Nolitan Hotel.


“Additional fees may apply,” of course, but somehow, we doubt the buyers will be sweating it.


Soho Penthouse Triplex Sees Price Chop, Broker Switch

The Real DealMay 22, 2014

Veracity Development lowered the asking price of its 3,000-square-foot penthouse condominium unit at 111 Mercer Street in Soho, and switched brokers.


The three-bedroom apartment was listed with Douglas Elliman for $12.5 million between 2012 and February this year. Then, CORE brokers Emily Beare and Christian Rogers stepped in to take over the listing, which is now for $12 million. The unit features a 1,600-square-foot space with three terraces.


“I think it’s a combination of things,” Beare told The Real Deal, regarding why the unit did not sell before. “I think part of it is that the unit wasn’t finished before. Now it’s a finished unit. We think the price reduction is more in line with what’s going on with the market, and I think now it will make a difference that people can come in and touch and feel and see the actual unit.”


Veracity got an average price per square foot of $2,172 on units closed in 2013, though the development hit the market in 2012, as previously reported.

New York Luxury Condo Prices Rise, But Transactions Drop in Q1: Report

Luxury DailyMay 22, 2014

A quarterly report from CityRealty found that average square foot prices for the top 100 condominiums in New York rose 19.4 percent from the year-ago period.


There were 169 total sales among the examined buildings in Q1, which represents a 7.6 percent drop from the first quarter in 2013. Part of the decline stems from a lack of inventory, and also from incessantly rising prices.


“I don’t see a lot that’s negative about [the luxury market],” said Pete Culliney, director of research and analytics at CityRealty, New York. “The robustness is stronger than the marketplace overall.


“The tight market is pushing down the number of deals that are closing,” he said. “People don’t want to cut their prices.


“We see waves come through, but it all has to do with a new building, or a new conversion coming to the market.”


The CityRealty 100 Report is a quarterly briefing on the 100 top condo buildings in New York City.


Scouting for land

The top sale during this period occurred at One Madison, where a triplex penthouse unit went for $43 million at $6,279 per square foot. At 15 Central Park West, a unit sold for $24 million at $8,693 square feet.


Fifteen Central Park West ranked as the most expensive building overall. Sales at the property averaged $5,944 per square foot. The following most expensive buildings include Time Warner Center, Residences at Mandarin Oriental, One Madison and Superior Ink.


Tribeca, the Flatiron District and the West Village all feature promising properties.


However, as inventory continues to fall, buyers and developers are beginning to consider traditionally overlooked neighborhoods, a trend that will increase and in many ways flatten out the city’s diversity.


Mr. Culliney said that neighborhoods throughout the city are being converted into luxury hot spots. New developments geared toward the ultra-affluent are going up and historic buildings are being transformed to fit the expanding amenity desires of luxury consumers.


Also, the number of units in buildings are shrinking so that developers can reap the maximum price per square foot. A large three bedroom apartment that sells for $7,000 per square foot brings in more than three studio apartments that sell for $2,000 per square foot.


“I think this shows a real fundamental change in the kinds of units that rate coming to market,” Mr. Culliney said.


Many properties are being marketed as ideal for art collectors, with an emphasis placed on capacious galleries, sturdy walls for hanging heavy pieces and outdoor space.


New-age amenities such as vitamin C-infused shower water at 66 E 11th St are also being pitched as differentiating factors.


On the rise

New luxury development projects in the NoMad, north of Madison Square Park, district of Manhattan indicate that the once-overlooked neighborhood is on the rise as other areas become squeezed.


Real estate firm Core recently closed sales for the residential condo 241 Fifth, commanding prices ranging from $820,000 to $10 million. Not to diminish the potential of other neighborhoods in the city, Core also wrapped up sales further up Fifth Avenue for the property One Museum Mile on the same day (see story).


“The level of safety, the diminished level of crime,” Mr. Culliney said. “These are things that add to why New York has become this kind of the market.


“Has it removed some of the gritty feel that everyone loves about the city?” he said. “To a certain degree.”

Swoon-Worthy Luxury Walk-in Closets

Leverage Global PartnersMay 22, 2014

For true clothes lovers, a walk-in closet is a luxurious necessity. It’s a home for your beloved belongings. It can even be your inspiration for how you want to present yourself for the day.


Just in time for spring-cleaning and your latest wardrobe update, we’ve gathered several ultra luxe walk-in closets from our Leverage Global Partners. Picture your clothes hanging here. Get ready to swoon.

Jake Gyllenhaal Checked Out $3.75 Million New York City Townhouse

Realty TodayMay 21, 2014

Guess who was home-hunting this past Sunday? Jake Gyllenhaal!


The "Prince of Persia" actor was spotted taking a look at a townhouse in the Tribeca neighborhood of New York City.


The New York Post first reported seeing the actor at an open house for the $3.75 million townhouse at 37 Harrison Street.


Tom Postilio and Mickey Conlon of Core Group Marketing are representing the four-level landmarked home.


Floor plans of the residence show that the entrance of the house opens into the main level's large living plus dining room. There is an eat-in kitchen on the level and a backyard garden too.


The upper level of the house is accessed through a flight of staircase. The level has two bedrooms with huge walk-in closets. The master suite takes up the entire top floor of the townhouse.


There is a basement level below the main floor that offers ample storage space. It can be used as an office too.


Interiors of the home feature tiled and hardwood flooring, French windows and wooden doors along with drywall and beamed ceilings.


The listing describes the place as, "architecturally rich and rare house at 37 Harrison Street (originally 327 Washington Street) retains a remarkable abundance of its original detail."


The listing also notes the home's rich history.


"Built in 1828 and landmarked in 1969, the Wilson Hunt House is one of a group of nine Federal houses whose scale and profile exist nowhere else in New York City. Located on a site that was once the well-known farm of Annetje Jans, to whom it was granted in 1636 by Dutch Director General, Van Twiller, the area surrounding the house has evolved a bit over the last several centuries."


Check out the home here.


According to Curbed, Gyllenhaal has been on the prowl for a new house for about five months now. The "Source Code" actor was spotted taking a look at another penthouse on 65 Thompson Street in West Village sometime in December last year. The home was listed for $3.5 million and the website speculates that Gyllenhaal's budget maybe something in the range of $3.5 million to $4 million.


Gyllenhaal was spotted sporting a bearded and ponytailed look at the open house. That is his get-up for his upcoming flick "Southpaw," which will be shot in Pittsburgh. The actor has already shot in the area while filming "Love and other Drugs."


Listing of the Day: 35-45 79th Street, #3D

Brownstoner QueensMay 20, 2014

This two-bedroom unit at Jackson Heights’ Hampshire House is being offered as both a co-op and a rental. As a co-op, it’s priced at $395,000 with a monthly maintenance of $831. As a rental it’s priced at $2,395 a month. Here’s the low down: prewar details like hardwood floors and built-ins, a renovated open kitchen, and a private garden in the building. It’s a sponsor unit so no board approval is required. Overall, it looks like quite a nice space. What do you make of those prices?

Home Shopping…The Old Fashioned Way

Real Estate WeeklyMay 20, 2014

CORE’s Chelsea office is hard to overlook. Straddling the corner of Seventh Avenue and 18th Street, it sits behind floor-to-ceiling glass windows that showcase the brokerage’s latest listings on classic print-outs. Through the windows, passers-by can see couches in the waiting area and photos of brownstone walk-ups on the walls.


Everything about the office is designed to draw people’s attention – with some success. CORE broker Steve Snider said pedestrians often stop to look at the listings and end up walking in, leading to an average of 25 to 30 additional clients each week. This year alone, Snider has won $5 million in listings from walk-ins.


“We pay a ridiculously high amount of rent, but we also get a tremendous amount of people,” he said.


His colleague Paul Johansen added that he gets as much as 90 percent of his business from walk-in clients.


There is no doubt that CORE’s Chelsea office is successful. But does it have a future?


A number of observers argue that brokerage storefronts are a dying breed in the internet age.


As more and more information on listings is brought online, the argument goes, brokerage storefronts will eventually share the fate of book- or CD-stores and become redundant.


Somewhat belatedly, the internet has started to transform the brokerage business. Online listing databases like Craigslist, Streeteasy and Trulia have been growing rapidly over the past decade, taking business away from traditional brokerage offices. The city’s newest brokerage, Urban Compass, chose to showcase its listings exclusively online and doesn’t have a single storefront.


And yet the brokerage storefront has proved to be a remarkably resilient model. REBNY doesn’t track their total number in New York City, but reckons it “probably increased” over the past years. Whenever firms enter an emerging neighborhood, they still usually start by opening a retail office there: just two months ago, Halstead announced it would open its first storefront in Bed-Stuy.


If anything, retail storefronts seem to have become more important for New York City’s brokerages in recent years.

Aleksandra Scepanovic, who heads the mid-sized Brooklyn brokerage Ideal Properties Group, believes brokerage storefronts are thriving because people tend to prefer face-to-face contact when it comes to real estate.


“You can read books or listen to music online, but you can’t live in an apartment on the internet,” she said. “You have a physical need for physical space, and you can’t resolve that physical need merely by browsing through the internet.”


“Looking for a place to call your home is a very emotional and face-to-face process. Some clients prefer to initiate human contact sooner rather than later.”


Scepanovic said walk-ins at the brokerage’s four storefronts make up about 20 percent of its new clients. Even if clients initiate contact online, they often still prefer to then meet up in the office.


Another reason why brokerages continue to bank on storefronts is the high retention rates they generate.


Scepanovic estimates 68 to 72 percent of people who walk into one of Ideal Properties Group’s storefronts to inquire about a listing or offer one end up becoming clients – compared to a mere 43 percent of people who inquire online or via telephone.


Douglas Elliman broker Mark Menendez, who works in the firm’s Tribeca office, puts its walk-in retention rate somewhat lower at 40 to 50 percent. But he agreed that storefronts increase the likelihood of browsers becoming customers.


“When you meet face-to-face it’s a lot more personable. There’s a lot more commitment from both sides, and you can establish a connection,” he said. “When you have someone in front of you, people tend to open up a lot more.”


While clients’ preferences for face-to-face contact and high retention rates seem to spell a bright future for brokerage storefronts in New York City, other factors give reason for pessimism.


For one, clients’ preferences can change. Buyers or renters may crave a broker’s handshake now, but if they become more accustomed to online listings and 3D space-viewing technology gains ground over the coming years, more people could start viewing apartments as something that can be bought or rented online.


Moreover, rising retail rents in New York City are already threatening to make many brokerage storefronts unprofitable.


“I think if retail rents keep going where they are going it will be very hard for brokerages to justify retail offices,” said Gary Malin, President of brokerage Citi Habitats. “Half the office is empty all the time because people are out. To spend that amount of money for retail rents if people don’t use them is tough.”


Citi Habitats recently merged two Upper West Side storefront offices, and its new headquarters will be on the fifth floor of 665 Broadway with no retail component.


“As all our retail leases come up for renewal, we will do a thorough analysis, and probably move some of them upstairs,” Malin said, adding that offices on higher floors tend to be significantly cheaper than retail spaces.


The high cost of retail storefronts was a main reason why Urban Compass chose to make do without them. Gordon Golub, Urban Compass’ chief residential real estate officer (and Citi Habitats veteran), said the money saved on storefronts allowed the brokerage to invest heavily in its online technology.


But despite Urban Compass’ focus on online listings, Golub dismissed the notion that brokerage storefronts could disappear anytime soon.


“I would expect (storefronts) to continue being important, and I wouldn’t rule out that at some point in our business plan we may decide there is a reason to have some sort of retail presence,” he said.


And while Citi Habitats is consolidating, other brokerages are adding retail space. Two of the city’s three largest brokerages – Halstead and Douglas Elliman – said they increased the number of storefronts in recent years. Corcoran declined to comment.


Mid-sized brokerage Warburg Realty also added retail space recently, and has plans for new storefronts in Brooklyn. Sales managers Karen Gastiaburo and Jason Haber said walk-ins are a “significant piece” of Warburg’s new client business.


As internet technology continues to make inroads into residential brokerage, retail is likely to decline in importance. But if the current trend is any indication, brokerage storefronts won’t disappear anytime soon.

Home Shopping … The Old Fashioned Way

Real Estate WeeklyMay 20, 2014

CORE’s Chelsea office is hard to overlook. Straddling the corner of Seventh Avenue and 18th Street, it sits behind floor-to-ceiling glass windows that showcase the brokerage’s latest listings on classic print-outs. Through the windows, passers-by can see couches in the waiting area and photos of brownstone walk-ups on the walls.

Everything about the office is designed to draw people’s attention – with some success. CORE broker Steve Snider said pedestrians often stop to look at the listings and end up walking in, leading to an average of 25 to 30 additional clients each week. This year alone, Snider has won $5 million in listings from walk-ins.

“We pay a ridiculously high amount of rent, but we also get a tremendous amount of people,” he said.

His colleague Paul Johansen added that he gets as much as 90 percent of his business from walk-in clients.

There is no doubt that CORE’s Chelsea office is successful. But does it have a future?

A number of observers argue that brokerage storefronts are a dying breed in the internet age.

How To Buy Grown-Up Art Without Going Broke (Or Setting Foot In A Gallery)

The Huffington PostMay 19, 2014

Like many decisions in life, buying art is easier when you're young. After all, no one is seriously going to judge you for that "Keep Calm And Carry On" poster you've got adorning your walls when you're barely able to make rent. But once you become a home owner (or tenant) of a certain age, you start to care a little more about what's in your place (and on your walls).


In a recent survey commissioned by online art dealer UGallery, 70 percent of people have never bought artwork -- ever. And 20 percent found it to be the most intimidating shopping experience of all -- more so than shopping for real estate or an expensive car. But while real-deal art collecting does require a certain degree of savvy, simply adorning your walls doesn't. Here are 6 low-stress ways to do it, without setting foot in a gallery... or going broke.

Rental of the Day: 111 South 2nd Street, #GRDN

BrownstonerMay 19, 2014

This one-bedroom garden apartment in south Williamsburg is lovely and has an old-fashioned feel even though it’s completely renovated. There is a 350-square-foot private backyard with a bluestone terrace and a large kitchen with stainless steel counters and appliances. The bathroom is attractively updated as well, and the clawfoot tub, bead board and patterned black and white floor tiles give it an old-timey flavor. Do you think $3,450 a month sounds about right for the location and condition?

Research Firm Expands at 330 Madison Avenue

Commercial ObserverMay 19, 2014

Research firm Zelman & Associates has nearly doubled its space at Vornado Realty Trust‘s 330 Madison Avenue, according to The Wall Street Journal.


The firm has signed a 9,822-square-foot lease on the building’s 34th floor, trading up from its current 5,232-square-foot space on the 20th floor, the Journalreported. Asking rent for the space, which will be built out by Vornado, was $80 per square foot.


Zelman was represented by Alex Cohen, a senior director at Cushman & Wakefield.


Zelman & Associates was founded in 2007 by equity research analyst Ivy Zelman. The firm produces research in the apartment real estate investment trust, building products, homebuilding, home center and single-family rental industries. In addition to its research business, Zelman also offers financial advisory and capital markets services.


Based in New York, the firm also operates offices in Cleveland and Boston.


What's the Deal

The Wall Street JournalMay 18, 2014

A Roundup of Commercial Real-Estate Transactions From Across the Tri-State Region.



Grace Refinancing Nets Tidy Sum for Owners


In case there's any doubt that owners of Manhattan office skyscrapers make boatloads of money, consider the new refinancing by the owners of the Grace Building.


The tower across the street from Bryant Park used to have a mortgage of $345 million; the owners, a venture of the Swig family and Brookfield Office Properties Inc., just refinanced with a $900 million mortgage.


Of the new debt, about $55 million was used to pay expenses and was set aside for future costs. The owners were able to put the rest—about $500 million in cash—in their pockets, according to loan documents.


The deal comes as the Grace Building's value has soared to an appraised $1.8 billion, up from $635 million in 2004, when the skyscraper last received a loan.


The secret to success: higher rents—much higher.


In 2004, all the large tenants paid less than $40 a square foot in rent. In the two largest deals of late, Bain & Co. is in for $93 a square foot and Cooley LLP signed a lease for $92 a square foot, according to loan documents.


Also helpful was a $34 million renovation of the lobby and elevators, said Mark Brown, Brookfield's chief investment officer, which ultimately helped the tower gain momentum.


"Over the last two years, all of that has come together," Mr. Brown said. — Eliot Brown



Avison Young Nabs CBRE Official for Retail Division


Canadian brokerage Avison Young is turning to a veteran retail expert to build its New York City retail services division, the company said.


Jedd Nero left his post as executive vice president at CBRE Group Inc. to join Avison Young as a principal and an executive managing director, based in Manhattan. Before spending 12 years at CBRE, he was with Newmark New Spectrum Retail LLC as an executive vice president.


"It has only gotten better and stronger, and more and more retailers want to have a flag here," Mr. Nero said of the city. "The markets themselves have stretched out and the boundaries keep expanding."


Mr. Nero has represented many national and international retailers, such as Hugo Boss USA and Kenneth Cole Productions Inc., as well as several prominent landlords including Silverstein Properties Inc., Western Management and Starwood.


Working closely with Mr. Nero will be Arthur Mirante, who is Avison Young's Tri-State president.


"The local market knowledge and depth of client experiences and relationships that Jedd brings to Avison Young, combined with the company's innovative client-service model, will significantly impact our presence…," Mr. Mirante said. — Keiko Morris



Consulting Firm Expands At 330 Madison Ave.


Zelman Holdings LLC has signed a lease to almost double its office space at 330 Madison Ave.


The research consulting firm is taking 9,822 square feet on the tower's 34th floor; now, Zelman Holdings occupies 5,232 square feet on the 20th floor.


Representing Zelman Holdings was Alex Cohen, senior director of Cushman & Wakefield.


The building's landlord is Vornado Realty Trust.


The asking rent was $80 a square foot, higher than firm's previous lease, which was signed in 2009 during the downturn in the market, said Mr. Cohen.


Vornado Realty Trust will build out the space for Zelman Holdings; the work should be completed within three months.


Zelman Holdings is an example of a smaller financial firm expanding in the Plaza District, the neighborhood surrounding Grand Central Terminal.


Other companies, such as hedge funds and private-equity firms, also have leased spaces of 10,000 square feet or less in the area, said Mr. Cohen.


"The smaller end has rebounded," said Mr. Cohen. "It is the large money banks that continue to consolidate." — Roland Li

Developers Woo Buyers With the Help of David Bailey and Jeff Koons

Financial TimesMay 16, 2014

Renowned for his National Geographic portrait of an Afghan girl with searing green eyes, the US photojournalist Steve McCurry has recently taken on something rather different to war photography.


McCurry has been commissioned by the property developers CIT to produce a series of 40 images of artisans on London’s South Bank. The pictures will be exhibited in the entrance of South Bank Tower – formerly King’s Reach Tower – and published in a one-off book for buyers.


The building’s 191 flats will span 30 floors (with 11 floors of offices and retail below) and will cost from £680,000 for a studio up to £9.1m for a large lateral apartment.


“We wanted someone of McCurry’s status and reputation to produce something that will appeal to our buyers who – we hope – are urbane, sophisticated arts patrons,” says George Kyriacou of CIT. “You can’t measure what impact it will have, but it helps to give the building a unique identity.”


Collaboration between developers and artists is becoming quite common in London and abroad. It is seen as a way to set a development apart from the competition and add prestige and value. Film-maker Sam Taylor-Wood and artist Nadav Kander produced photographs of Knightsbridge as marketing material for Candy & Candy’s One Hyde Park, while artist James Turrell created light installations for the exterior and interior spaces.


The Neo Bankside development, next door to Tate Modern, hosts permanent exhibitions in the public spaces around the building and some private apartments. “The close connection we have to art persuaded many of our residents to live here,” says Nicholas Gray of property developer Native Land.


Meanwhile, the photographer David Bailey was recently drafted in to produce 44 shots for The Chilterns in Marylebone, the area’s first new-build development in six years, where three-bedroom apartments begin at £7m. Buyers of the 44 apartments will each receive a signed, limited-edition book of Bailey’s photos and – possibly – one of the prints, worth £20,000 each. The rest of the images will be displayed in the building.


In Miami, which has its own art fair – Art Basel Miami Beach – the link between art and high-end property is well established. Eduardo Costantini, the Argentine property developer, philanthropist and founder of the Malba museum in Buenos Aires – home to one of the world’s biggest collections of Latin American art – invested $220m in a waterfront plot on Miami Beach in order to build Oceana Bal Harbour, a 28-storey glass cube. He wanted some artwork to match the calibre of the location, so he got in touch with Jeff Koons.


“I thought we couldn’t afford him, but we found out he was working on a new series, and we paid $14m for two pieces,” says Costantini. “It’s very expensive, but because of the size and scale of our project, we wanted to make a strong statement about the importance of art. The art speaks of the quality of the developer and, as I’m responsible for Malba, I couldn’t have a bad piece of art.” Koons’s 10ft steel sculptures, “Pluto and Proserpina” and “Ballerina”, will grace the building’s breezeway.


Yet, wouldn’t an upmarket development in this location sell as fast without the art? “As developers, we propose a way of living,” says Costantini. “It’s not about maximizing profit, but maximizing the offering you provide for buyers.”


Also in Miami, The Residences at W South Beach – where the penthouse is on sale for $12.9m and resale apartments are due to come on the market soon priced from $1m – prominently display the prolific art collection of its developer, Aby Rosen, who has used works by Damien Hirst, Andy Warhol and Jean-Michel Basquiat among others in exhibitions in the hotel lobby.


“Using art in property developments is becoming a very hot trend in Miami,” says Mayi de la Vega, chief executive of One Sotheby’s, which is marketing the apartments. She refers to the Ritz-Carlton Residences on Miami Beach, where buyers will have curators from Los Angeles and Argentina on tap to advise on art for their properties. “Art instils the city with a longevity,” she says. “You’re building a city that’s mindful of culture.”


In New York’s Tribeca district, Eldad Blaustein, chief executive of IGI USA, the developer behind 93 Worth – a former 1920s knitting factory converted into 92 loft-style residences – feels there is no quantifiable “dollar value” you can attach to displaying high quality art. “But as part of the whole project, it’s a valuable aspect,” says Blaustein, who has collaborated with the young Israeli photographer David Kassman to produce a series of pictures inspired by nature.


Apartments at 93 Worth originally cost from $500,000, but just four properties remain, all penthouses, priced from $7m to $10m. “Mainly our buyers are local families who are buying to live here. They appreciate art and Kassman’s photos give the building a sense of locality so that it’s more than just bricks and walls,” says Blaustein. “It’s inspirational and brings an elegance, colour and freshness to the project.”


While most developers say it is impossible to put a price tag on the value art brings to their development, Giles Hannah of Christie’s International Real Estate feels differently. “I’d say you can add 4 to 5 per cent to your sales price by having good art works – and that applies as much to single houses as new developments,” he says. “There are very wealthy buyers who circulate the globe following the art world, and property developers in Miami, Dubai and London will often launch developments to coincide with the biggest shows and auctions as it’s a way of accessing ‘qualified wealth’ at those times.


“We see a direct correlation between trophy paintings and trophy properties. Someone will buy a work of art, then want to buy a property to display it in,” says Hannah. “Increasingly, developers are using art as a major feature in their projects as good art sells a property, almost like dressing an apartment well. It gives a wow factor and adds value.”


Paul White, chief executive of Frogmore, a partner of The Chilterns project in London, is less convinced of the direct correlation between art and property value. “I’d be shocked if a buyer said they’d invested in our project because of David Bailey. If only it were that easy,” he says. “It’s about doing something new and creating a sense of locality. I only wish I’d thought of doing it years ago.”



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