The Real Deal New York - Latest News

Fannie Mae charged with neglecting three dilapidated NYC buildings

Fri, 06 Nov 2009 18:30:00 -0500

Fannie Mae has been charged with neglecting to pay for basic repairs in three New York City rental buildings after moving to foreclose on the properties in March. The buildings -- two of which are on the city's list of worst-kept properties -- have been rendered dilapidated and a Bronx judge has ordered Fannie Mae to respond to charges that it has allowed the buildings to remain structurally unsafe, with several city housing violations. Attorney Marc Landis, the court-appointed receiver who filed the charges, estimated that $324,475 will be needed to make the necessary repairs at the buildings, each purchased by real estate investment firm Ocelot Capital at the height of the housing boom. Fannie Mae, which purchased the mortgage from Deutsche Bank before the buildings were abandoned by Ocelot, will appear at a hearing Nov. 23 to answer the charges.

Obama signs first-time homebuyer tax credit extension

Fri, 06 Nov 2009 18:00:00 -0500

President Barack Obama has signed into a law a bill that extends the first-time homebuyer tax credit to April 30 and strengthens anti-fraud measures, he announced today. The bill also stretches out unemployment benefits by up to 20 additional weeks and cuts taxes for struggling business owners. The new law comes on the heels of news that the national unemployment rate has eclipsed 10 percent. Obama said despite sustained job losses, the economy grew last quarter in large part due to a rebound in the housing market. The extended homebuyer tax credit, which was previously slated to expire at the end of this month, will be instrumental in ensuring a continued recovery, he said.

Midtown office rents plummet as vacancies skyrocket, report shows

Fri, 06 Nov 2009 17:30:00 -0500

Just one month after declines in rents in Midtown seemed to be leveling off, the average asking rents in October fell sharply as vacancies rose by their largest amount in nearly a year, a new report by commercial services firm CB Richard Ellis shows (see the full report after the jump). The average asking rent in Midtown fell by 99 cents per square foot in October to $56.89 per square foot, while the vacancy rate rose by .7 points to 10.3 percent, the CBRE report, covering October, shows. In September, brokers were buoyed by statistics that showed the average asking rent in Midtown declined by just 6 cents per square foot, to $57.88 per foot. But that price support did not continue last month. The drop in price decline in Midtown was the largest since August when it fell $1.46 per square foot, the figures show. The increase in vacancy is the largest since December 2008, when the rate rose 1 point to 7.6 percent from 6.6 percent a month earlier, CBRE data shows. The weakness was not as pronounced in Manhattan overall. The average asking rent fell by 88 cents per square foot from September to October, and the vacancy rate rose by .5 points to 9.8 percent. TRD

DOB list of stalled construction sites hits 531, Times Square gets new budget hotel ... and more

Fri, 06 Nov 2009 17:00:00 -0500

1. Hamptons property sees $7 million price increase to $25 million [Curbed]
2. Apple Core opens budget hotel, the Hotel @ Times Square [Crain's]
3. Silver talks Paterson into loosening grip on Battery Park City Authority money, sources say [Downtown Express]
4. Manhattan Inn restaurant and piano bar opens in Greenpoint [Eater]
5. Blackstone gets stake in two Glimcher malls [Dealbook]
6. By year's end, residential inventory to drop below pre-2006 levels [Business Week via Realtor]
7. Andy Roddick and wife Brooklyn Decker shop for condos in Brooklyn [Post]
8. DOB list of stalled construction sites hits 531 [Brownstoner]

Top five sales agents of the week

Fri, 06 Nov 2009 16:30:00 -0500

The Real Deal has ranked the top listing agents of the week based on the highest priced residential deals filed with the city.

Footnotes: Data is for closed deals filed with the city this week through Thursday. The chart only includes sellers' brokers, because buyers' brokers' names are not available in city data or listings. The data does not include deals in contract. To obtain broker information, listing information was compared with sales records filed with the city. Only deals where an individual broker and address can be identified are included. As a result, private sales, listings where an address has not been provided and new development sales by a sales center are not included. Sources: Streeteasy.com and The Real Deal research.

Abigail Disney sells pair of West End co-ops separately after string of price cuts

Fri, 06 Nov 2009 16:00:00 -0500

Abigail Disney, Walt Disney's grandniece, has sold her pair of 300 West End Avenue co-ops for a combined $7.2 million, but not before a string of hefty price cuts. Disney purchased the two semi-combined, nine-room units from singer Harry Belafonte for $10.75 million in 2006. They hit the market again in April 2008 for $13.45 million. The price was cut to $11.95 million, and then to $10.95 million before finally selling last month to two separate buyers. Amy Gold and Brett Gorvy, deputy chairmen at Christie's, purchased the B-line apartment for $3.45 million, and the A-line apartment sold for $3.75 million. Dolly Lenz of Prudential Douglas Elliman had the listing.

NY construction company gets into real estate finance and sale-leaseback business

David Jones — Fri, 06 Nov 2009 15:30:00 -0500

Structure Tone, one of the nation’s leading construction management firms, is partnering with Corporate Lease Properties to finance new real estate projects or sale-leaseback deals. Structure Tone officials said the venture will allow it to provide alternative financing to corporations leasing space to strong creditworthy tenants, and therefore help move projects along that require new construction financing or just enough money to build out space for a new tenant. Officials declined to comment on any specific deals; however, they said they have a number of deals in the pipeline and are focused on deals in Tier 1 cities, including New York, Boston and San Francisco. “It’s the right time to invest in real estate,” said Brian Donaghy, chairman and president of Structure Tone. “We want to be in a position where we have our platform ready and greased to do deals.” Structure Tone has managed some of the largest construction projects in New York, including the Bank of America tower and managed tenant build-out projects for Moody’s Corp., MTV Networks and other major companies.

BlackRock sells UWS building for $7M loss

Adam Pincus — Fri, 06 Nov 2009 14:45:00 -0500

A BlackRock investment fund sold an 81-unit apartment building on the Upper West Side at 10 West 74th Street for $38 million, or $7 million below its purchase price in 2006. The buyer was identified as West 74 LLC -- an entity affiliated with investor Elias Kalimian, principal with Midtown-based Elk Investors -- and the sale went into contract in August before closing Oct. 29, city property records published today show. The fund of the powerhouse investment management company bought the property in September 2006 for $45 million, city records show, and in 2007 valued the property at $56 million, according to a federal Securities and Exchange Commission filing. The building was held by the BlackRock Diamond Property Fund, the SEC filing shows. The appropriate representative from BlackRock was not immediately available to comment, a spokesperson said. Recent apartment listings include a one-bedroom for $3,500 a month and a two-bedroom for $5,500, according to data from Streeteasy.com. Darcy Stacom, a vice chairman at CB Richard Ellis, was the sales broker. Elk Investors owns other properties in Manhattan including an office building at 489 Fifth Avenue at 42nd Street and an apartment building at 131 East 83rd Street at Lexington Avenue. The company did not immediately respond to a request for comment.

Going after borrowers gets personal

Adam Pincus — Fri, 06 Nov 2009 14:30:00 -0500

From left to right: Kent Swig, Yair Levy, Harry Macklowe and Aby Rosen could be personally liable to lenders.

From the November issue: Contrary to popular belief, commercial lenders did not throw out all of their standards in the recent cycle of easy credit. When developer Aby Rosen structured his $133 million loan for the acquisition and development of the Shangri-La hotel at 614 Lexington Avenue in April 2007, the mortgage document included a personal guaranty to cover losses in the event of a default. Similarly, when Kent Swig negotiated $49 million in loans with Lehman Brothers Holdings to develop a hotel and condo project at 45 Broad Street in the Financial District in 2006 and 2007, the bank demanded a similar guaranty in the mortgage documents. And other big-time borrowers such as developer Yair Levy and investor Steven Elghanayan have made the same types of commitments to convince banks to make loans on their projects.

Q & A with Related President Jeff Blau

C. J. Hughes — Fri, 06 Nov 2009 14:00:00 -0500

Jeff Blau

Save for a few short-term dips, the real estate market in New York has run full steam ahead since the recession of the early 1990s, when Jeff Blau joined the Related Companies out of college. And what a run it’s been for the 41-year-old president of the privately held real estate juggernaut, which developed One Union Square South, the mixed-use tower that helped revitalize its downtown neighborhood, and Time Warner Center, which played a similar role at Columbus Circle. On the purely commercial side, Related has also developed the Gateway Center, a three-month-old mall by Yankee Stadium that’s brought big-box retailing to a low-income area. Blau talked to The Real Deal about the economy, how distressed assets may provide opportunities and the importance of affordable housing.

Dia finds new home in its old one

Fri, 06 Nov 2009 13:30:00 -0500

The Dia Art Foundation will return to 545 West 22nd Street, building a new space on the footprint of the Chelsea exhibition site it current owns and rents out to the PaceWildenstein gallery. The gallery's lease is up in 2011. Dia has been on the hunt for a new home in the city since 2004. After outgrowing its two Chelsea locations, Dia initially planned on opening a museum at the entrance to the High Line. The Whitney Museum has since commandeered that site after the Dia lost two directors in a row in addition to its largest benefactor, Leonard Riggio, former chairman of the board. Dia does not plan to hire a star architect -- instead, said current director Philippe Vergne, they are looking for a "utilitarian envelope for art" with "no bling." He said the museum hopes to break ground in 2012.

Mann sued over Apthorp brokerage fees

David Jones — Fri, 06 Nov 2009 13:00:00 -0500

Developer Maurice Mann is facing a lawsuit for allegedly failing to pay $400,000 in commissions and fees to Blue Rock Properties, a Manhattan-based brokerage that in 2007, helped arrange financing for the acquisition of the Apthorp on the Upper West Side. Mann, the general partner of Mann Realty Associates, led the investment group that acquired the landmark rental building, at 390 West End Avenue, for a record $426 million. Mann has since lost the role of managing partner at the Apthorp to Africa Israel, the Israeli real estate and diamond conglomerate led by billionaire Lev Leviev. Leviev is currently awaiting word from the New York State Attorney General about whether he will declare the condominium plan effective, amid serious concerns about whether the developer was able to find enough buyers to make the building financially viable.

1,000 new affordable homes available in outer boroughs

Fri, 06 Nov 2009 12:30:00 -0500

Nearly 1,000 moderately priced homes and apartments are now available for purchase in the city through the Housing Partnership Development Corp., a non-profit that works to create new affordable housing with the help of government grants, subsidies and tax credits. Of those, 700 are located in Brooklyn's Crown Heights and East New York neighborhoods and are priced up to 35 percent below market values. In the Bergen Street Co-ops, at 1509 Bergen Street in Crown Heights, Brooklyn families meeting a minimum income requirement of $54,000 per year can apply to purchase one-, two- and three-bedroom apartments, priced between $179,190 and $350,000. Homes like these are built with the help of government grants, subsidies and tax credits, which the Housing Partnership works to make available to developers selected by the city. Recently, funds were approved for the 104-unit Sterling Street Co-ops conversion, another of the organization's projects, at 320 Sterling Street in Crown Heights. Construction on the project is 75 percent complete. In the Bronx, there are 200 affordable units currently available, and there are 75 in Queens. [Brooklyn Eagle via Curbed]

Openings and closings: Babel Fair opens, Elvie's Turo-Turo closes ... and more

Fri, 06 Nov 2009 12:00:00 -0500

Babel Fair at 260 Elizabeth Street, Elvie's Turo-Turo at 214 First Avenue

In the East Village, burger joint Patty and Bun has opened at 61 West 8th Street near Fifth Avenue. In Soho, Babel Fair accessory shop is open for business at 260 Elizabeth Street between Houston and Prince streets, carrying designer wares for under $200. Chinatown is now home to Grand Bo Ky restaurant at 214-216 Grand Street on the corner of Elizabeth Street. Another Crumbs location will open at 20 Lexington Avenue on the corner of 23rd Street. Lenny’s sandwich shop has leased 1,700 square feet at 370 Lexington Avenue near Grand Central Terminal. In the Meatpacking District, the Henry Beguelin boutique will be closing its doors at 18 Ninth Avenue at the corner of 13th Street in January 2010 and will be looking for a larger location.

This Week in Comments

Fri, 06 Nov 2009 11:30:00 -0500

Greenwich yawns at homebuyer tax credit
Greenwich is not immune to the economic crisis. Many of the storefronts are empty and the inventory of houses is huge. So to say they are yawning is simply not true. The real problem is that there are so many overpriced houses that first-time buyers cannot get into the market in the first place.

MoMA tower opponents launch television ad
Build it taller. All of the new skyscrapers going up in our city are all roughly the same height, which is gradually making the skyline look like a solid brick. It's [a] variation in building height that creates a magnificent skyline. Accept the fact that one day there will be buildings taller than the Empire State Building.