DOUG HEDDINGS

The firm will also add an office manager to oversee administrative functions in the Manhattan office and another in the Hamptons.

“We are actively spreading the word about our recruitment plans so that we can attract the right new additions to the team,” said Douglas Heddings, founder and president of HPG.

“Candidates may be seasoned veterans, or come from professional backgrounds other than real estate, but there are a few non-negotiables: they must wholeheartedly believe in putting the consumer first, not just in words, but in practice; they must understand our team model, including the profit sharing aspect and camaraderie and support that goes with it; and they must have an engaging personality.”

Heddings plans to add five agents in CT/Westchester; five in Rockland; 10 in the Hamptons; and another 15 in New York City.
The group’s staffing announcement comes as it prepares to launch a new website which will enable buyers to search for properties in each of the geographic areas it services from one central e-location.

By Al Barbarino
Today’s brokers must be in-the-know with the ever-changing tech industry — or they risk becoming obsolete in the eyes of their digital clients.

JASON SCHWARTZENBERG

“Understanding them and having a resume that you’ve worked with similar companies in the past — they dig that,” said Jason Schwartzenberg, a corporate managing director at real estate services firm Studley.

Getting on the right side of one of the fastest growing office space users in the country seems like a wise move in a market where traditional New York tenants, such the financial sector, are contracting.

According to Cassidy Turley, tech-driven firms accounted for 28% of Manhattan leasing in 2011, up from 18% last year and helped drive down vacancy rates in midtown south to the lowest in the country.

Schwartzenberg doesn’t just work with digital companies and startups — he worked for them.  In 1999, he packed his belongings into his red 1992 Chevy Blazer and drove from Hasbrouk, N.J. to San Francisco, where he joined a tech startup called Digital Commerce.

In 2001, imbued with the booming California tech scene’s energetic spirit and on the heels of the dot-com bubble, Schwartzenberg moved back east and worked for a range of digital companies and startups as they moved in on New York City. There was Websplit, creator of a web browser; Interworld, a former ecommerce software provider; and, most recently, Torry Harris Business Solutions, a software solutions provider and the only survivor of the bunch.

The companies shared similar strategies, goals and ideals with those Schwartzenberg works hand-in-hand with today at Studley.  For startups, which often operate out of incubators and co-op spaces before they are ready to move into their own spaces, choosing the right space in the right location can mean the difference between growing rapidly and sinking steadily.

“Having gone through that experience for a few different companies, I understand the predicament they are in,” Schwartzenberg said.

Tech-driven firms accounted for 28% of Manhattan leasing in 2011, up from 18% last year and helped drive down vacancy rates in midtown south to the lowest in the country.

“Their businesses and head counts are changing on a day-to-day basis and they need flexibility to do various things.”

Technology, advertising, internet and media companies have basic things in common when they look for office space; they often seek flexible lease terms, expandable or pre-built designs and perhaps high, open ceilings, high-end finishes, glass front offices or game rooms.  But the basics don’t cut it — and neither does an old-school approach.

“Clients need to be able to look at their advisors and not be able to tell the difference between them and their employee,” said Sean Black, a vice president at Jones Lang LaSalle. “They talk the same, they look the same, they understand the issues and at the end of the day they can ultimately execute.”

Black got his start in real estate in the early 2000’s, as digital startup companies zoned in on the area dubbed Silicon Alley — the Flatiron District, SoHo and beyond — and the “tech markets were going crazy.”  The early exposure put him in tune with the issues startup companies face.

Today, digital clients make up about two-thirds of Black’s business and he has been involved in more than a quarter of a million square feet worth of tech deals within the last two to three months alone, he said.

He works with Wework Labs, a co-op space for entrepreneurs; Tremor Media, a digital video tech company; and he moved Foursquare, creator of the location-based social networking site, into their new 56,000 s/f office space at 568 Broadway in the heart of SoHo.

Tweeting regularly, knowing who Gilt Groupe and Foursquare are, and understanding crowdsourcing and flash mobs only scratch the surface when it comes to understanding the tech world and its companies, Black said.

SEAN BLACK

Brokers working with digital companies have to stay ahead of the curve and take an active role in understanding the industry or they will ultimately lose deals and valuable clients.

“The thing about people in the technology sector is that they’re innovative and they’re always looking to the future,” said Black.

“Tech is all about the future. You’ve got to have a mentality that is energetic and appreciates the changes in technology while not being wedded to the traditional ways of doing things.”

Many clients look at their broker as a member of the team who can grow with them.

Schwartzenberg, who estimated about one-third of his business falls in the digital space, has worked with Intent Media, a company that helps e-commerce sites maximize web profits; Brightwire, a real-time provider of events throughout world; Clover, a mobile payments provider; and the Ladders, an employment website.

In 2009, Schwartzenberg first reached out to executives at Jibe — a maker of recruiting software that uses Facebook and LinkedIn to help users find jobs — to help them find office space.  They were in their infancy stages and sharing space at a startup incubator.

It wasn’t until 2011 that the company was ready to move into their own space at 26 West 17th Street. Throughout the process of finding the right location, it was crucial knowing that Schwartzenberg knew the inner workings of the industry, said Joe Essenfield, 33, CEO at Jibe.

“It’s huge, because then you don’t feel like he’s just throwing listings at you,” Essenfield said.  “He makes a much better use of my time.”

Time is crucial for CEO’s and other startup executives, as they scramble to secure new funding and talent. There is little time to tour new spaces, interview architects, furniture people and cleaners. More than ever these demands fall on brokers.

“If I can help people save time and focus on their core business, they appreciate that and in turn you feel good,” Schwartzenberg said.  “In some crazy way you can feel that you were one of the reasons somebody was able to get their company up and going.”

ADAM MERMELSTEIN

The Newark based real estate company TreeTop Development is staking a claim on the New York market with its acquisition last week of a four-property portfolio of mixed use buildings.

The company — which has owned and managed over 3,000 residential homes throughout New York and New Jersey — partnered with New York City-based Latus Partners, LLC, on the deal that includes 1917 7th Avenue, 110 St. Nicholas Avenue, 110 West 116th Street and 120 West 116th Street.

“We’ve initiated an aggressive plan over the past two years to grow our portfolio of homes by purchasing high quality properties in key markets in the New York metropolitan area and these properties fit perfectly in with our investment strategy,” said Adam Mermelstein, co-founder and principal of Treetop along with childhood pal Azi Mandel.

TreeTop will institute a capital improvement program to renovate the buildings and bring the properties up to market standards. The company will renovate apartment interiors as they turnover to include new hardwood flooring, renovated kitchens and renovated bathrooms.

The transaction is the first of several large portfolio-type deals TreeTop is planning in New York City to significantly increase its presence throughout Manhattan in 2012, according to Mermelstein who, along with Mandel has crafted a strategic path for TreeTop Development.

Sensing a shift in the real estate marketplace, the company has implemented an aggressive approach to acquire and transform value-laden properties in the area’s premium locations and take advantage of niche markets.

The vision and insight of the company’s principals have enabled TreeTop Development to grow its portfolio of homes at a time when many property owners have slowed pursuing multi-family investments.

“The strength of Treetop Development has always been our progressive approach to residential investment and development,” said Mandel. “We are constantly seeking out new and challenging projects that will become signatures for surrounding communities. We’re determined to think out of the box.”

AZI MANDEL

The story of TreeTop Development can be traced back to two high school friends who combined compatible business philosophies to create a development company committed to innovative ideas.

Azi Mandel launched his career in the fall of 2001 by accepting a position with a Manhattan syndicate led by Marc Karasick — a well-known real estate investor who has owned such trophy buildings as the Bank of America Building in San Francisco.

Adam Mermelstein jumped right into the real estate investment field after graduating Yeshiva University in 2001 by buying and flipping rental buildings.

Their paths would cross again when Mandel, while overseeing a complicated deals that included the acquisition, renovation and re-launching of commercial and residential properties throughout New York City, would occasionally be presented with opportunities that he felt weren’t right for the syndicate.

For these transactions, he would call his old high school friend, Adam, whom he knew was aggressively seeking new deals. It wasn’t long before the two began working together.

“We never thought we would start our own company,” recalled Mermelstein, “but we got along very well together and both had very similar business views. After our first couple of joint projects, we decided to launch TreeTop Development in June, 2005. Our plan was to start slowly, but before we knew it, we had seven projects underway.”

In early 2007, sensing instability in the condo market, TreeTop Development made a critical decision that would give them an advantage in the area’s marketplace.

The company would begin utilizing innovative acquisition techniques such as purchasing market-rate and high-performing HUD subsidized rental properties. TreeTop would then transform the properties by modernizing living spaces, common areas and building systems. The end result was an expansion of its portfolio in key strategic markets, including more than 2,000 units in Essex County, NJ.

“Economic concerns and challenges over the past few years have certainly created new opportunities in the real estate industry for multi-family property owners and investors,” said Mermelstein.

“Purchasing high-quality HUD apartment assets is one of these avenues that has enabled us to grow our company. Additionally, we focus on buying well-located, market-rate rental communities at competitive prices that immediately generate capital and possess future upside as well.”

Buoyed by the success of this new HUD strategy, TreeTop began a strong push into new markets, turning its eye to value-laden multifamily rental properties with favorable rents in strategic middle-class northern Manhattan neighborhoods.

The aggressive pursuit of new properties in stable Upper West Side locations has TreeTop in contract for 350 units at the start of 2012 with the possibility of another 500 apartment homes added to its portfolio by year’s end.

Shimon Shkury & Victor Sozio of Ariel Property Advisors served as broker for both the buyer and seller in the 1917 7th Avenue portfolio deal. Steve Fleissig of Greenberg Traurig LLP acted as legal counsel for the buyer.

Steiner will build a 720-unit apartment tower. Rendering courtesy of Dattner Architects.

Developer Douglas C. Steiner has unveiled plans for a new 50-story apartment building he promises will be “the best in Brooklyn.”

Located at 333 Schermerhorn Street, at the intersection of Third Avenue and Flatbush Avenue, The Hub will have 740 rental units as well as retail space and parking for over 250 vehicles.

A groundbreaking is slated for the Fourth Quarter of 2012.

“This will be the best rental building in Brooklyn,” said Steiner, chairman of development company Steiner NYC who also built Steiner Studios at the Brooklyn Navy Yard.

“We love this location. We’re a short block or two from 12 subway lines and the LIRR. We’ll have spectacular views, great layouts and an iconic presence on the skyline. And we’re at the hub of so many great Brooklyn neighborhoods.”

The Hub, designed by Dattner Architects and Goldstein, Hill and West Architects, will have “the largest amenity package of any rental building in Brooklyn,” according to a press release from Steiner.

Highlights include a 24-hour concierge, a landscaped common outdoor terrace with sundeck, a fitness center, yoga studio, locker rooms, a dog run, and a grilling terrace.  Residents will enjoy multiple lounges and bike storage for every unit.

Each residence will be pre-wired for cable, phone and high-speed internet connections. The Hub is a proposed 80/20 project that will offer approximately 144 affordable rental units.

Led by the father-son team of David and Douglas Steiner, Steiner NYC is a privately held development firm that traces its roots to 1907.

Current projects include 58 and 80 Metropolitan, a two-phase, market rate condominium project of 173 units comprising a full city block in Williamsburg, Brooklyn; and 25 Washington Avenue, an approximately 285,000 s/f expansion at Steiner Studios, to include additional stages, support and post-production space.

By Sarah Trefethen

MARYANNE GILMARTIN

Forest City Ratner is in talks to lease a 100,000 s/f factory space at the Brooklyn Navy Yards.

The facility would be the manufacturing hub for pre-fabricated modules the developer wants to use to build on the Atlantic Yards site in Brooklyn.

Speaking at the first annual Real Estate Weekly Women’s Forum, which took place at the McGraw Hill Auditorium last week, MaryAnne Gilmartin, executive vice president of Forest City Ratner in charge of the 22-acre project that includes the new Nets arena, said the company was excited to be pioneering the use of modular building technology.

Rendering of the Atlantic Yards development by SHoP Architects

The developer is still in talks with construction unions over the modular approach, which would divide building labor between factory and on-site workers.

But Gilmartin explained to delegates how workers would manufacture tower elements, called modules, to then be assembled into a residential high-rise on site at the Atlantic Yards in downtown Brooklyn, which will feature the Barclays Center sports complex, future home of the New Jersey Nets basketball team, as well as residential, retail and offices space.

The first of the 14 residential buildings planned for the site is a 32-story, 350-unit tower scheduled to begin construction this spring.

If it is built using modular technology, it will be the tallest prefabricated steel structure in the world, Gilmartin told the Women’s Forum.

While she stopped short of saying how much the company hopes to save on construction costs using the modular technology, Gilmartin said that if the test case of the first tower proves the technology’s benefits, the technique could also be used to build the remaining residential buildings planned to go up at the site in the coming years.

At the same time, the Brooklyn facility would also have the potential to branch out and produce modules for use in other developments across the city and country, Gilmartin said.

Speaking after the forum, FCR spokesman Joe DePlasco said the Navy Yards was one of three possible sites the company was considering for a factory base.

The executive’s remarks rounded out a day of presentations by some of the industry’s top talent that was attended by over 300 participants.

LESLIE HIMMEL

The morning keynote address was delivered by Leslie Himmel, managing partner of Himmel + Meringoff Properties since 1985.

Himmel treated her audience to detailed profiles of some of the innovative deals she and business partner Stephen Meringoff have orchestrated over their 27 years of collaboration.

And she shared advice for investors starting out in the industry, including a caution that interest rates and government regulations can change unexpectedly, and real estate investors need to plan for the future.

Nonetheless, she said, she is “very bullish,” about New York investments. “I think New York City is on fire,” she said.

Other panels throughout the day covered deal making, mentorship and professional development, asset management, government policy, construction and design, and a roundtable of women founders and CEOs.

Attendees said they enjoyed the event both for it’s strong content as well as it’s positive, collegial atmosphere — which some said was no surprise, given that the high-powered speakers were all women.

“Their message was, ‘This is an open field, and this is how you get into the game,’” said Lisa Weitzman, of the day’s speakers.

But the event wasn’t only for women.

"Anatomy of the Deal" panelists (r-l) Faith Hope Consolo, Prudential Douglas Elliman's Retail Group; Helen Hwang, Cushman & Wakefield; Laurie Golub, Africa Israel USA; moderator Laura Walker, Citibank; and Marisa Manley, Healthcare Real Estate Advisors.

Alex Kostlev, a representative of the two-year-old construction firm INS Contractors, was busy exchanging business cards and showing off pictures of his company’s work during the lunch-time networking session. Kostlev and his colleagues attended the event for the people they could meet, he said, but also found the speakers enlightening.

“We know a few real estate agents, but we don’t know the sharks — we know the fish,” he said. “It’s interesting to listen to the people who are at the very top and get their perspective.”

Three hundred delegates turned out for the first annual REW Women’s Forum at the McGraw Hill Auditorium on Feb. 15.

Photos by Jason Knobloch, Illusion Studios

By Al Barbarino

Real estate private equity firm PCCP, LLC has dished out a $65 million loan to the buyer of Midtown’s four-star Cassa Hotel.

HNA Property Holding Group, a Chinese corporation, purchased the 45-story tower at 70 West 45th Street after the developer, Waterscape Resorts LLC, fell into financial trouble last year.

PCCP’s loan is secured by the lower 24 stories and basement levels of the building that make up hotel and retail portions of the tower. Floors 25 through 45 are reserved for condo units and are not collateral for the loan.

“This investment gives PCCP the opportunity to originate a loan at an attractive basis on a newly constructed luxury hotel in a market with strong fundamentals,” said Rob Cohen, senior vice president at PCCP, in a statement.

Kevin Chin, vice president at PCCP, added, “The property has an ideal Midtown Manhattan location that is approximate to a wide range of demand drivers including Times Square, Rockefeller Center, luxury shopping on Fifth Avenue and the Midtown office market, and we expect the property will benefit from the opening of the BLT restaurant and improved management by an experienced operator.”

The Cassa Hotel includes 165 hotel rooms, 11,000 s/f of retail — currently leased to BLT Restaurant and slated to open in early 2012 — as well as 2,000 s/f of lounge and outdoor terrace space and 1,100 s/f of meeting space.

Waterscape completed the project in August 2010, but efforts to sell condominiums were hampered when the developer defaulted on payment obligations under its loan agreements and filed for bankruptcy protection.

HNA, a subsidiary of Hainan Airlines Group, is among a group of Chinese investors looking to expand into major U.S. cities after commercial property prices dropped significantly during the financial downturn.

The corporation paid a reported $126 million for the property, though the deed was not yet filed with the city’s finance department as of Friday afternoon.

*this article appeared in the Feb. 15, 2012 print edition of Real Estate Weekly

By Al Barbarino

Mack-Cali Realty Corporation’s fourth-quarter 2011 earnings per share doubled compared with the same period last year, jumping from 9 to 18 cents, according to the company’s quarterly report.

Revenues and expenses fell by 6.5 and 10.9 percent, respectively, to $179.7 and $130.3 million, with the declines due primarily to lags in construction activity.

Funds from operations rose by roughly $4 million, to $68.1 million, while funds from operations per share (diluted) declined slightly from 69 to 68 cents.

The company executed 126 leases at its consolidated in-service portfolio totaling 773,707 s/f — counting both new leases and renewals. The total for 2011 was 4,229,337 s/f.

“Despite ongoing uncertainty in the economy and a lack of meaningful job growth, we continue to outperform in our key markets,” said Mitchell E. Hersh, president and CEO, in a statement. “With premier assets that are well located, along with our teams of outstanding professionals to service our tenants, we expect to be at the forefront of the eventual market recovery.”

Total 2011 assets fell slightly to $4.3 billion — from $4.36 billion in 2010 — and stayed well above the $2.1 billion in liabilities.

On December 7, 2011, Mack-Cali announced that it had signed a development agreement with Ironstate Development Company to build two multi-family, luxury rental towers consisting of 500 apartments each on the Jersey City waterfront. The company plans to break ground on the project in the fourth quarter of 2012.

*this article appeared in the Feb. 15, 2012 print edition of Real Estate Weekly

BARRY GOSIN

BGC Partners, Inc. ,  the global financial services firm which acquired Newmark Knight Frank in October 2011, announced that it has agreed to acquire substantially all the assets of Grubb & Ellis Company.