Sales Over Rentals, Even in a Credit Crunch

The New York TimesOctober 14, 2011
IN the last few years a number of new condominium projects, facing poor sales and tighter lending requirements for buyers, have chosen to become rental buildings. While rentals don’t usually generate as much initial revenue as sale properties, developers see them as a safe long-term bet, generally easy to fill and providing steady revenue.

But 305 West 16th Street, developed by Centaur Properties at Eighth Avenue in Chelsea, has taken the opposite tack, abandoning plans to lease its 53 units, which are spread across seven stories, in favor of selling them.

Back in 2008, when ground was broken around the time of the Lehman Brothers implosion, the dark gray metal-clad building, designed by SLCE Architects, was conceived as a rental.

In addition to the weak sales market at the time, Centaur had another inducement to offer the building as a rental: Google, whose New York headquarters are across the street at 111 Eighth Avenue, had raised the possibility of leasing the entire building as employee housing, said Harlan Berger, a principal of Centaur.

Mr. Berger said he ultimately balked at Google’s proposal to add doctor’s offices for its workers, and a basketball court. (Google would not verify that it had made these suggestions. “Unfortunately, I’m unable to confirm whether we had discussions,” Jordan Newman, a company spokesman, said in an e-mail.)

About the time negotiations fell through, Mr. Berger signed two big tenants, Bank of America and Duane Reade, for the pair of ground-level retail spaces. The financial cushion from those leases, coupled with an improving sales market, prompted him to rethink his plan. At the end of 2009 he decided to sell the units at 305 West 16th.

But not as condos. The building is a condop, which is like a co-op in that residents own their apartments collectively, but unlike a co-op in that they do not control the rest of the building. In this building, the retail spaces are retained by Centaur as a single commercial condo unit.

While that structure may benefit Centaur to some degree, it was also required by the state because the building sits on land that Centaur leases rather than owns. The 1964 law that created condominiums stipulates that the land under these buildings be owned, not leased. Any residential units atop leased land become co-ops or condops, by default, explained Stuart Saft, a real estate lawyer.

There are currently just 258 condop buildings in New York, according to the Council of New York City Cooperatives and Condominiums, but the atypical arrangement does not seem to be scaring off buyers at 305 West 16th.

By early this month, 36 of its 53 units had sold, Mr. Berger said, adding that two of the buyers are Google employees. And more than a dozen of the buyers have moved in, he said. Prices for the remaining units range from $500,000, for a 450-square-foot studio, to $1.265 million, for a 970-square-foot two-bedroom.

And while condop maintenance costs can be high, owing to extra ground rent, Centaur will cover 80 percent of those costs for a decade, Mr. Berger said.

It took more than just filing paperwork to go to a condop from a rental, Mr. Berger said. He also raised the quality of the finishes. In the kitchen, for instance, he opted for a separate stovetop and range from Bosch rather than a one-piece unit from General Electric. Cabinets, bathroom tiles and faucets were also upgraded.

On the roof Mr. Berger installed a 37-foot-tall, 5,800-pound steel-and-concrete daisy that he first saw at the Burning Man festival in Nevada in 2007. He tracked down the sculptor and bought it, part of which was being stored in a Reno warehouse.

In gambling that the sales market has improved, Mr. Berger might take solace in a nearby building that seesawed between rental and sales strategies: Chelsea Modern, at 447 West 18th Street, at 10th Avenue.

Built as a condo, Chelsea Modern had sold 37 of its 47 units when Lehman collapsed, forcing banks to rescind loan offers to buyers and scuttling some purchases, said Robert Gladstone, the chief executive of Madison Equities, the developer.

Suddenly faced with a new crop of units, Chelsea Modern put 20 on the market as rentals, said Mr. Gladstone, who added that he gradually began to sell those sponsor units as time passed.

Today, just 6 of 47 units there remain. And in words that might hearten developers wondering about the sales market for new construction, Mr. Gladstone also said he had sold more than twice as many units so far in 2011 than in all of 2010. “Our velocity,” he said, “has definitely increased.”

Luxury Condos Planned at 93 Worth Street

The Real DealOctober 05, 2011

IGI USA Announces the Acquisition of 93 Worth Street

October 03, 2011
NEW YORK, N.Y. (October 3, 2011) – Izaki Group Investments USA (IGI USA) is pleased to announce that its subsidiary has closed on the acquisition of 93 Worth Street, a coveted residential asset in New York City.

IGI plans to complete a major renovation and restoration of the building at 93 Worth Street, creating a high-end condominium with CORE serving as the exclusive sales and marketing agency, and ODA-Architecture as the project architect. The 175,000-square foot building will be a modern luxury condominium with a total of 96 units, in addition to numerous lifestyle-enhancing amenities such as a 24/7 doorman, a gym, a children’s playroom, a lounge and a 3,845-square foot roof top. In addition to the residential living space, the property will offer approximately 10,000-square feet of commercial/retail space. Built in 1924, the building at 93 Worth Street historically served as one of TriBeCa’s garment factories and was used as an office building over the past five decades.

“We are delighted to close on 93 Worth Street,” states Eldad Blaustein, the CEO of IGI-USA. “This deal is indicative of IGI’s positive outlook on the New York City real estate market. Condo inventory in New York City is diminishing and pre-war buildings are scarce. We are confident that we will provide an upscale condo conversion with appealing amenities to TriBeCa, where there is a huge lack of inventory.”

Located on Worth Street, between Broadway and Church Street, the building is in a prime TriBeCa location. Savvy buyers will be able to seize upon the prospect of living in a new home as early as Spring 2013.

Founded more than 60 years ago in Israel, IGI USA is a fully integrated New York City-based real estate company. While the IGI primary investments are in conversion and new residential real estate development, IGI is looking to invest in Manhattan multi-family real estate where the firm has expertise. For more information about IGI-USA please visit

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Development Updates

The Real DealOctober 01, 2011

Top Residential Agents of The Week

The Real DealSeptember 30, 2011

Legend Lists East Village Condo for $2.95M

The Real DealSeptember 29, 2011

Grammy Award-winning singer John Legend has listed his East Village condominium, at 52 East 4th Street and Bowery, for $2.95 million, the New York Post reported.


The two-bedroom, two-bathroom apartment is in a 15-story building with 18 units, a landscaped roof deck, a swimming pool and interiors by Andres Escobar. The 1,359-square-foot condo has 14-foot ceilings, as well as a private elevator landing.


Legend, who shared the apartment with long-term girlfriend Christine Teigen, is ready to upgrade, the Post said. He purchased the apartment for $1.9 million in 2009.


Prudential Douglas Elliman broker Jason Walker has the listing. It seems Legend likes working with Walker; the Elliman broker also helped sell his previous East Village pad.

CORE and StreetEasy Partner to Launch "CORE Control" to Revolutionize the New York City Real Estate Listing System

September 27, 2011
NEW YORK, N.Y. (September 27, 2011) – CORE is pleased to announce the release of CORE Control, the first listing and client management platform built in collaboration with StreetEasy, New York’s most widely-used real estate website. Unlike any system currently on the market, CORE Control is client-driven with tools that will increase listing openness while adding an important new dimension to client communications.

StreetEasy’s commitment to full disclosure and transparency in real estate information is built into CORE Control’s client features. CORE Control will streamline processes and benefit both consumers and agents alike with improved listings, search functionality and client management tools:

o Listings entered in CORE Control will be immediately displayed on the CORE and StreetEasy websites, and will soon after be fed to all major brokerages, listing and distribution services locally and nationally.
o CORE agents will have access to broker-only information on listings, such as commissions, listing expiration dates and CORE agent private notes.
o Agents have the ability to manage internal listings that aren't shown to the public.
o CORE Control offers agents the ability to link press coverage to their properties, as well as other relevant documents (such as exclusive agreements) for internal use.
o CORE Control offers the ability to create CORE-designed marketing materials in a clean and attractive format directly from StreetEasy.

Search Functionality
o CORE Control gives our agents the ability to search through listings from nearly every NYC brokerage, as well as listings from management companies, landlords and individual owners.
o CORE Control will generate branded comparable reports to help in property valuation and educated pricing.
o Agents will get daily updates for all new CORE listings and open houses as well as the ability to get updates for listings from any other source.

Client Management
o CORE Control offers the ability to collaborate with clients on listings, buildings and searches matching their desired criteria through the StreetEasy "Folders" interface. Clients and agents alike can show what they liked/disliked about listings and coordinate visits to different properties.
o Clients are also able to interact with agents, using the StreetEasy "Folders" interface, to show what they liked/disliked about listings and coordinate visits to different properties.
o Both agents and clients can receive email updates on price changes and new listings fitting their criteria so they are always informed about the market.
o CORE Control customizes printouts for listings of interest, with private notes, comments and listing details.

"CORE was the first brokerage to adopt StreetEasy when they began four years ago, and even then we recognized the similarities in our business approaches – we’re both small, nimble, forward-thinking companies. For those reasons, StreetEasy was the only company we considered partnering with to build this system. They fully understand the evolution of the real estate business ad how vital transparency is to the process,” says Shaun Osher, CEO of CORE. “CORE Control provides a tremendous advantage to our clients and agents in the way it streamlines their communication. It is far superior to anything currently in the marketplace. More importantly, the consumer has made StreetEasy their listing system with its transparent, user-friendly experience, and in my opinion it’s the best system available in New York City – so why not provide our clients with the best?”

“It is clear to everyone that the role of the broker is changing; it’s about service now. Consumers can access much more thorough information and often play a very active role in their searches. CORE was one of the first companies to provide full access to StreetEasy for all of their agents more than two years ago, so it was no surprise that they were ready to take the next important step to enable their agents to engage consumers in a very modern and open way,” says StreetEasy CEO Michael Smith.

About CORE

CORE is a real estate sales and marketing firm delivering the best in brokerage, communications and advisory services for the luxury residential segment. In addition, CORE’s elite group of highly experienced and successful professionals service developers who value efficient, no-nonsense results. CORE was founded by Shaun Osher as a full-service boutique firm with a strict adherence to the principles of integrity, efficiency and results. For more information visit

About StreetEasy is New York's most accurate and comprehensive real estate website, providing consumers detailed sales and rental information and the tools to manage that information to make educated decisions. The site has become the reference site for consumers, real estate professionals and the media and has been widely credited with bringing transparency to one of the world's most important real estate markets.

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