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March 2011

March 2011 » Market Analysis » NY New Developments

March 2011 New York New Developments

Major Trends

The laws that cap rent increases on 1 million city apartments expire in June, and landlord groups, tenant advocates and politicians all agree that they should be extended. Last time the laws were up for a renewal, in 2003, Senate Republicans threatened to let them expire and ended up forcing the Democrats to accept a simple renewal. Now the Democrats think they have a better chance of getting a good deal for tenants. The real estate industry is desperate to renew a tax break known as 421-a, which spurs new apartment building development, and Sheldon Silver believes developers won't get that renewed unless they agree to change the rent laws.

A Long Island College Hospital building at 110 Amity Street in Cobble Hill will be converted into a condominium building as part of a controversial development plan. The landmarked Lamm Institute building and three adjacent lots at Amity and Henry streets sold to a group of investors for $6 million, and the new owners intend to transform it into three luxury units. In 2007, the hospital sold the land for $6.1 to Time Equities, which planned to convert the mansion into eight apartments and construct six, single family townhouses.

While some state officials are concerned that Governor Andrew Cuomo's proposed property tax cap could lead to a budget shortfall, the proposal has gained support from New York City homeowners. The median property tax in New York state reached $3,755 in 2009, compared to the national median of $1,917. The tax cap may become increasingly popular among homeowners who see the current system as unfair.

The one-time manager of the Hotel Chelsea is looking to buy out the property, as fears over tenant eviction mount. Residents at the 250-room landmark at 222 West 23rd Street have become concerned about losing their homes, after developers recently began vying for the $100 million building near Eighth Avenue. Stanley Bard, who ran the hotel for 50 years is not happy with what has happened and may buy the remaining shares at the building for a reasonable price.

Google is not wasting any time in its plan to gobble up additional office space at 111 Eighth Avenue, the mammoth Chelsea office building that it purchased for $1.8 billion late last year. The search engine giant has already made a buyout offer of an undisclosed sum for Nike's 100,000 square feet of sixth-floor space at the 3 million-square-foot property, which was declined. Nike's lease expires in 2014, but Google wants to expand more quickly than that.

A proposed $13.5 billion Amtrak tunnel that would link New Jersey commuter trains to a new, expanded Penn Station would involve razing the entire Midtown block between 30th and 31st streets, and Seventh and Eighth avenues.

Midtown New York City is no longer the priciest office market in the Americas, after Rio de Janeiro's average rents climbed 47 percent from this time a year ago. Even as Midtown's average rent climbed 10 percent to $115 per square foot, Rio de Janiero's jump to $120 per square foot knocked Midtown out of the top spot in the Americas. Rio de Janeiro is the first South American location to accomplish this.

A year and a half ago, the New York City hotel industry was hurting badly, as tourists cut back on spending and business travelers stopped booking rooms. But times have changed. Indeed, the industry, while not back to where it was at the market's peak, has done a 180 and is now rebounding stronger and faster than most had expected. This month, hotel experts not only about the key metrics for evaluating hotel performance, but also about development, hotel sales and a host of other crucial industry markers.

Columbia University got the OK from the Department of City Planning on a zoning variance that will allow it to build a new, Steven Holl-designed athletic facility at its waterfront Baker Field sports complex in Inwood. Normally, property owners would have to exchange 15 percent of their land for public waterfront access to build, but the plan approved allows Columbia to give up only 1.5 percent for that use. Columbia sought an exception to the rule because it said it doesn't currently own enough waterfront land at the Broadway and 218th Street site to meet the city's requirement, and instead wants to develop some of the city's adjacent waterfront land as an addition to Inwood Hill Park.

Tax revenues in New York City's fiscal budget are predicted to increase beyond previous projections, to $40 billion in 2011 from $39 billion, and to $41.9 billion in 2012, from $40.8 billion, producing an additional $2.1 billion in revenues. The increase in revenues was driven by economically sensitive tax revenues, which include real estate taxes, personal income, sales and business.

The Community League of the Heights, a Washington Heights-based non-profit, plans to build a six-story supportive housing complex next year at 2142 Amsterdam Avenue, between 166th and 167th streets, for formerly homeless and mentally disabled people. The plan is awaiting final approval from the Department of Housing, Preservation and Development.
Developer Bruce Ratner is seeing his dream come true on Dean Street, where he is building the Barclays sports arena for the Brooklyn Nets basketball team at Atlantic Yards. Next year, Brooklyn will have its first professional sports team since the Dodgers left in 1957, and the 18,500-seat Barclays Center will host more than 200 events, including concerts, pro boxing promoted by Oscar de la Hoya, tennis, the Ringling Bros. and Barnum & Bailey circus and Disney on Ice. But the future didn't always look this bright. There was a time in October 2008 when Ratner thought his plans might not come to fruition.

New Jersey is courting the Hunts Point Produce Cooperative Association, the group that runs the South Bronx-based Hunts Point produce market, to take up residence in the Meadowlands. Governor Chris Christie is so intent on winning the wholesale cash cow, which does roughly $2.3 billion in business every year, that he sent his Lieutenant to meet with the leadership there. The marketplace's lease on 660,000 square feet of space expires this May, and some members of the co-op say they are being swayed to move toward New Jersey.

One Madison Park condominium developer Ira Shapiro, billionaire investment partner Cevdet Caner, investor Ian Bruce Eichner of Continuum and One Madison Park Embattled One Madison Park condominium developer Ira Shapiro has agreed to give up much of his authority at the project under a settlement with billionaire investment partner Cevdet Caner, effectively ending his $40 million rescue deal with investor Ian Bruce Eichner. Shapiro reached a settlement with Caner's Green Bridge Partners, which helped finance One Madison Park in 2007 and filed suit in December to block the Eichner agreement, which would have financed the completion of the 23 East 22nd Street condo and leave Shapiro in charge of the property.

A $9.5 billion merger of the New York Stock Exchange Euronext and Frankfurt's Deutsche Boerse would make the iconic 11 Wall Street one of two global headquarters locations for the largest exchange group in the world. The deal still needs approval from regulators, would give Deutsche Boerse majority ownership of the yet-to-be-named company.

Builder confidence in the market for newly built, single-family homes remained unchanged at a rate of 16 for a fourth consecutive month in February. The index gauges builder perceptions of current single-family home sales and sales expectations for the next six months, and anything below 50 means builders consider conditions poor.

While Atlantic Yards developer Forest City Ratner hopes to break ground this year on a long-delayed 400-unit residential tower slated for the Downtown Brooklyn project, that goal may be a ways off. Forest City Ratner currently does not have the funding lined up to start the project, and that may distort the developer's timeline for the project.

The steel for Extell Development's International Gem Tower at 44 West 47th Street is set to rise the last week of March or the first week of April. The $750 million, 34-story condominium tower, between Fifth and Sixth avenues, had its design by Skidmore Owings & Merrill unveiled nearly four years ago. But since the October 2008 market crash badly hurt the diamond industry, progress on the tower has been delayed. Now, Extell and Tishman Construction have just turned on their public information hotline as work begins, giving details on trenching, sandblasting and related activities for this month and next.

The Hawaiian city shockingly outranks NYC as the top national commercial market. For those New York real estate professionals suffering from seasonal affective disorder, here is this month's most unwanted news flash: The commercial market in Honolulu has emerged as a rival to New York City, at least when it comes to a few key statistics. the New York Metro area scored a 77, ranking it second-best among the 56 cities tracked, behind Honolulu, which scored an 81.

The California Public Employees' Retirement System, the largest U.S. public pension plan otherwise known as Calpers, is shifting its strategy away from residential real estate investments after getting badly burned on several boom-era housing deals. Perhaps the most infamous of those deals was Stuyvesant Town and Peter Cooper Village, in which Calpers lost a $500 million stake after the complex was turned over to creditors last year. The pension fund's investment committee voted to move roughly half of its real estate investments from higher-risk assets like housing into commercial property, in order to avoid falling victim to real estate booms and busts in the future.

Pharmaceutical company Pfizer has unloaded eight of 13 acres at its shuttered Flushing Avenue manufacturing plant in South Williamsburg to Long Island City-based Acumen Capital Partners, which plans to revive the site. The complex, which is where the 162-year-old pharma giant got its start, had been previously eyed for redevelopment into a mixed-use complex with more than 1,000 apartments, including affordable housing. But Pfizer abandoned those plans two years ago because of the recession, and it doesn't look like the Acumen deal will involve housing.

By the end of next year, taxpayers will have paid $224 billion to prop up Fannie Mae and Freddie Mac. $55 million of the rescue funds will be funneled back to the U.S. Treasury as dividends, so subtracting that would put the tally at $169 billion. Thus far, the Treasury has aided Fannie and Freddie with $151 billion, of which $20.2 billion has been paid back in dividends, since it seized the companies in 2008.

A new development group has acquired a stretch of neglected blocks on West Farms Road in the Bronx, and wants the city to rezone the area so it can build 10 high-rise buildings with a total of 1,300 apartments and shops. It would be one of the largest private rezoning projects in the borough since Co-op City. The land , 215,000 square feet, overlooking the Sheridan Expressway and the Bronx River was purchased by Signature Urban Properties, led by former City Council Speaker Gifford Miller. The project is expected to cost up to $400 million and could take up to seven years to complete.

Developer Shahab Karmely and 443 Greenwich Street Anglo Irish Bank and an Israeli investment firm are facing a $40 million lawsuit from developer Shahab Karmely, who alleges breach of contract and conspiracy after the Israeli firm foreclosed on his stake in a stalled Tribeca condominium project. Karmely, owner of Kar Properties, filed suit in New York State Supreme Court against the bank and W-D Group, an Israeli firm led by investors Eitan Wertheimer and Ezra Dagmi. W-D, the mezzanine lender in the proposed 118-rooom hotel and 40-unit condo at 443 Greenwich Street, foreclosed on Karmely's stake in the project after he failed to pay back a $20 million mezzanine loan.

Out-of-state residents with a Hamptons summer home or a Manhattan pied-a-terre may soon be paying more tax dollars to the state of New York. Last month, a court ruled that all income earned by a New Canaan, Conn., couple is subject to New York state taxes because they own a summer home on Long Island they used only a few times a year. They have been hit with an additional tax bill of $1.06 million. Tax experts and real estate brokers say this ruling could increase tax bills for the thousands who own New York City apartments that they use only occasionally.

Community Board 4 is partnering with the Department of City Planning to rezone 18 blocks of the Hell's Kitchen-Clinton areas between 10th and 12th avenues and from 43rd to 55th streets. Residents are seeking to make the district less of a manufacturing zone and more of a mixed-use community, with a range of residential, retail and community space, while still preserving its affordability.

Property prices are now substantially higher in the global cities of Hong Kong and Moscow, and lower in New York. The study compared the residential markets within four of the world's cities sought out by the wealthiest households:London, Moscow, Hong Kong and New York, and revealed New York to be the most affordable. Using London as a means of comparison, the total cost of a group of residential properties of equivalent households is 8 percent higher in Moscow, 56 percent higher in Hong Kong and 18 percent lower in New York.

Foreclosure activity has not yet rebounded from the impact of lender freezes. Newly scheduled residential foreclosure auctions in New York City hit another low in January, continuing the downward trajectory that began in the aftermath of the so-called "robo-signing" controversy late last year. The number of foreclosure auctions scheduled for the first time there were just 106 such filings in January, down from 247 in October 2010, when the scandal surfaced and lenders began to impose temporary foreclosure freezes. The city's peak was 473 newly scheduled foreclosure auctions in June 2009. Each building class including co-ops, condos, single-family homes and two-family homes saw similarly dramatic declines in scheduled auctions of between 40 and 60 percent on a year-over-year basis.

Within the year, Brooklyn may see the start of construction on the first residential building at the Atlantic Yards, the opening of a new outdoor market in Downtown Brooklyn and sales commencing at new residential condominium 20 Henry. Members of the real estate community received these and other development updates at the first installment of the 2011 Brooklyn Real Estate Roundtable series.

U.S. Treasury Secretary Timothy Geithner will present Congress with three options for reducing the government's role in the nation's housing finance system and minimizing the influence of mortgage companies Fannie Mae and Freddie Mac. Geithner will release the proposal, with one plan calling for the elimination of Fannie and Freddie and their government-backed guarantee of mortgages. Under the Dodd-Frank financial regulatory overhaul enacted last July, the administration was required to submit a plan for ending taxpayer support for Fannie and Freddie.

General Theological Seminary at 175 Ninth Avenue in Chelsea is trying to rid itself of $41 million in debt and is attempting to replenish its depleted endowment fund through a plan to sell land and several of the seminary's historic properties to a developer, who intends to convert those buildings into a condominium.

Building tax rates, water rates and home heating oil prices on the rise. Manhattan was the most active region in apartment building trades last year, followed by Brooklyn and then the Bronx. Buyers paid a total of $2.1 billion for 170 apartment building transactions last year in all of Manhattan. There were 99 trades in Brooklyn valued at $360 million, and 79 sales in the Bronx worth $315.9 million. Queens had the slowest year, with just 43 properties trading, totaling $212 million.

Mayor Michael Bloomberg unveiled renderings for the new Hunter's Point South development in Queens. The project is the largest new affordable housing complex in the city since the 1970s. The development is slated to include roughly 5,000 residential units, 3,000 of which will be set aside for middle-income residents. Also planned for the complex is a five-story, 1,071-seat middle and high school.

Despite this year-over-year growth, rents stayed relatively flat between December and January. The average rent in the borough climbed 2 percent for studios, 1 percent for one-bedrooms and 2 percent for two-bedroom units. Three-bedroom apartments saw no change in their average rent. Soho/Tribeca topped the list of priciest neighborhoods in the borough, reporting the priciest average rent on all units, except studios. A three-bedroom unit in the neighborhood had an average monthly rent of $8,400. Washington Heights reported the least expensive rents, a studio there has an average rent of $1,105.

Last year Canada's pension funds and institutional investors became active as joint venture partners and owners of property in major money-center cities, including Manhattan, Washington D.C., Chicago, Los Angeles and Boston. Last spring, the Canadian Retirement Investment Fund, Oxford Properties Group, announced that it will partner with the Related Companies to develop the 26-acre Hudson Yards. Oxford acquired a 50 percent interest in Hudson Yards, investing alongside New York-based Related Companies in the 12 million-square-foot, mixed-use development. Related and Oxford will act as the general partners for the project.

Arianna Huffington is taking the Soho half of her "1+1 = 11" equation and moving it into AOL's Greenwich Village offices. The media titan, who announced in a post-Super Bowl Web and Twitter blitz that she would be merging the Huffington Post with AOL in exchange for a $315 million, was previously rumored to have set her sights on a loft in the Mattel Building in Chelsea at 675 Sixth Avenue for the new HuffPo headquarters. Now that Huffington has sold the company, which currently blogs from a loft at 560 Broadway, near Prince Street.

The Financial Industry Regulatory Authority, or FINRA, is looking to move to One World Financial Center, as part of its expansion plans. The securities firm regulator is negotiating for 204,067 square feet of space on floors 9-12 in a sublease from Dow Jones, which moved to Midtown from the Brookfield-owned tower about 18 months ago. The deal appears to be in the works, would give FINRA an additional 50,000 square feet of space.

Durst Fetner Residential has chosen Danish architectural firm BIG-Bjarke Ingels Group to design West 57th, a 600-unit residential building on West 57th Street between 11th and 12th avenues, BIG's inaugural North American project. The building will be a hybrid design blending the European block look with a traditional Manhattan high-rise courtyard building. Residential units of different scales will be located on a podium with cultural and commercial space. The building, which has a sloping roof, is also seeking LEED Gold certification.

U.S. commercial and multi-family lending climbed sharply in 2010. Roughly $110 billion of commercial and multi-family loans were originated last year, up 36 percent from 2009. Lending activity climbed sharply toward the end of the year, with fourth-quarter originations up 63 percent from the third quarter. Hotel property loans saw the biggest quarter-over-quarter jump, climbing 333 percent between the third and fourth quarters of 2010.

The 485-ton machine that's been boring southward through the ground below Second Avenue since last May has completed the west tunnel for the future subway line that will, by 2016, extend from 63rd Street to 96th Street as part of the Q train, the Metropolitan Transportation Authority. That 7,200-foot tunnel will ultimately become part of the Second Avenue Subway but for now, the MTA is focusing on what it calls Phase I which is the Q train extension. Next up for the massive tunnel boring machine is getting disassembled and moving back to 92nd Street. From there, it will again head south to create the east tunnel.
Gramercy-Flatiron ranked number one on the top-10 list of New York neighborhoods that are best for singles, based on nightlife, population of young people, income, crime and affordability. In Gramercy-Flatiron, home to 34,000 people, the median house price is $525,000. More than 73 percent of the people rent and over 75 percent of the population is single. Its location is also a draw.

With Barnes & Noble shifting its focus to e-books and Borders on the brink of a bankruptcy filing, it would seem an inopportune moment for the comeback of the independent bookstore in New York City. More than half a dozen such shops have opened across the city over the past couple of years, and they are actually doing well. Among the new shops are Posman Books, which opened a second, 2,000-square-foot location at Chelsea Market in September 2009 and is now in the process of inking a 10-year deal with its landlord at that location after bringing in more than $1 million in revenue in its first year.

The famed Trans World Airlines Flight Center at John F. Kennedy International Airport could become part of a new boutique hotel under a plan by the Port Authority of New York & New Jersey. The agency, which has already poured $20 million into asbestos removal and restoration work at the vacant, Eero Saarinen-designed terminal, is now seeking developers to help recoup some of that money by converting the space into a lobby for a small hotel that would sit adjacent to the new JetBlue building. The lobby would have restaurants and shops, while the hotel would have around 150 rooms.

The Yankees are making a play for another Times Square shop. The baseball franchise just inked a 15-year deal at 1501 Broadway. The new, 2,000-square-foot space will be a team store when it opens a few months from now, selling Yankees paraphernalia and game tickets.

Publishing giant Conde Nast is likely to finalize its 1 million-square-foot lease at One World Trade Center by March. The Durst Organization has a deal with the Port Authority of New York & New Jersey to buy a $100 million stake in the tower, and the magazine behemoth agreed to relocate from 4 Times Square, which Durst also owns. The only tenant to sign a lease at the 2.6 million-square-foot project thus far is China's Vantone Industrial, but two government agencies are also in negotiations to lease a combined 1 million square feet.

A two-bedroom apartment at the Dakota has become a central element of an international criminal case. The unit at the tony Upper West Side co-op at 1 West 72nd Street is one of several properties worldwide owned by Jan-Dirk Paarlberg, a Dutch investor who faces four-and-a-half years behind bars after being convicted on fraud, forgery and money laundering charges. But while the home on the corner of Central Park West, which Paarlberg bought in 2001, is now in contract for $4.4 million, Dutch prosecutors claim they have rights to the apartment.

The View, TF Cornerstone's Long Island City waterfront condominium, has passed the 50 percent sold mark. Since last summer, the condo has seen up to 11 closings per month. The 18-story condo features one-, two- and three-bedroom units up to 1,879 square feet, with prices starting at $616,000. Each unit offers floor-to-ceiling windows with views of the water, white oak flooring, Viking and Sub Zero appliances, washer-dryers and private balconies or terraces.

Residential bedbug complaints in New York City climbed 7 percent last year. There were 13,472 complaints, up from 12,594 in 2009. People who have infestations may not file a complaint, but they may go through the proper channels and tell the landlord or co-op board or condo owner. In New York, bedbug complaints are registered with the city's 311 nonemergency hotline. The landlord is notified and the department contacts the tenant to confirm before making a site visit. If bedbugs are found, a violation is issued. HPD lists bedbugs as a Class B housing violation, which means they are considered hazardous and the landlord has 30 days to correct the problem.

Eric Benaim and the developer of Long Island City's PowerHouse Condominium is preparing to launch the second phase of the project, a new 83-unit condo called. The 12-story building is located at 2-26 50th Avenue, in what was once the yard of the Pennsylvania Railroad's power station. The station itself was converted to the PowerHouse condominium by developer Cheskel Schwimmer of Chess Builders. Now that it's 70 percent sold, and with the remaining units rented out, Schwimmer is turning his attention to the Yard. A third residential building is also planned for the site, but Schwimmer has not yet secured a construction loan for it.

New York housing officials have identified 200 buildings they say are the most poorly maintained in the city, racking up more than 20,000 hazardous violations for issues including mold, vermin and heating. Brooklyn had the highest total, with 99 buildings, while the Bronx had 70 and Manhattan only had 23.

A disgruntled brother battling his two siblings over their late father's New York City real estate portfolio threw another wrench into Gary Barnett's nine-year effort to buy two loft buildings in Noho for $11 million. The brother, Aaron Muschel, was not satisfied with a settlement filed by a judge in Manhattan federal bankruptcy court that sought to close more than six years of litigation. A compromise between Barnett, president of Extell Development, and at least one of the Muschel brothers brought an end to three related bankruptcy proceedings and opened the door to Barnett buying the attached properties, 734 and 736 Broadway, south of Astor Place.

President Barack Obama is pushing Congress to rework an existing tax deduction for landlords who retrofit their commercial properties to create better incentives for promoting energy efficiency. The plan is part of Obama's post-State of the Union address tour, piggybacking on his call during the Jan. 25 speech to reduce the nation's dependence on oil. Today, Obama set a goal of reducing energy use in U.S. commercial properties by 20 percent by the year 2020.

The new Hollister flagship at 666 Fifth Avenue efficiently explodes the notion that a clothing store is mainly about the items for sale on its shelves. Obviously the purveying of apparel, for decades now, has consisted of the sale of such imponderable commodities as zazz and mystique. But no previous shop has gone quite as far as in that direction as Hollister on Fifth Avenue located between 52nd and 53rd streets, the Southern California lifestyle clothing brand's second flagship to open in the city, several years after the first one at 600 Broadway. The new store shows absolutely no interest in or respect for the structure that contains it, formerly owned by Tishman Speyer Properties and designed by Carson & Lundin in 1957 with a distinctive metal facade.

The volume of delinquent commercial mortgage-backed securities in the U.S. rose to $61.4 billion last month, pegging the delinquency rate at a record-high 9.34 percent. After all but disappearing in the aftermath of the real estate crash, the CMBS market has already begun to rebound, $12.7 billion in issues in 2010. Moody's Investors Service recently projected that figure would rise to $37 billion this year. But in New York City, those fresh CMBS issues do not appear to have made a dent in the delinquency rate yet.

The co-op board at the Upper West Side building the Dakota has responded to a lawsuit alleging racial discrimination and defamation, calling the accusations erroneous. The suit, filed by former board president accused the board at One West 72nd Street of using racial slurs during approval hearings and denying some applicants based on their race.

New state figures show that the number of Florida foreclosure cases introduced and cleared in the state's court system fell in the last quarter of 2010. There were 40,211 foreclosure cases disposed of in Florida courts in the last quarter, almost half of the 71,514 that were disposed of in the third quarter, according to a report released by state court administrators. In Broward County, the number of such cases fell by 62 percent, down to 3,784.

The board of Yonkers Industrial Development Agency unanimously voted to finalize a set of economic development incentives for the construction of 77 rental units in a seven-story building at 47-75 Ravine Avenue between Point and Gold streets. The $25.6 million project is being developed by the non-profit Center for Urban Rehabilitation, or Cure, and L+M Development Partners. Cure and L+M plan to build seven studios, and 19 one-bedroom, 38 two-bedroom and 13 three-bedroom rental apartments, for which families with incomes up to 80 percent of the Area Medium Income would be eligible.

The city has launched a new computer tracking system designed to automatically flag questionable real estate transactions in its public property records database that could be indicative of mortgage fraud. The system, whose red flags include multiple, rapid changes in ownership, property transfers at below market prices and property sales at prices just barely below the minimum threshold for tax filings, will be monitored by the mayor's Financial Crime Task Force.

The 2010 Manhattan real estate market shows marked improvement from the doldrums of 2009, with prices twice as high as a decade ago. The median sales price of Manhattan co-ops and condominiums in 2010 was $880,000, up 3.5 percent from 2009 and 104.7 percent from 2001. The average price, $1.46 million, rose 4.6 percent from the previous year and 87.2 percent from $778,575 a decade ago. Sales activity has also grown. There were 10,060 apartment sales in 2010, 35.4 percent more than 2009's total of 7,430 -- the lowest in more than a decade.

New York-based JPMorgan Chase may be looking to unload $143 million worth of loans it's owed by Centro Properties Group. JPMorgan is expected to sell the debt at auction. Centro, a Melbourne-based shopping mall owner, handed the reins over to creditors in 2008, as debts mounted and loans became more difficult to refinance. The company had $18.6 billion worth of debt as of June 20.

Larry Silverstein is facing a massive foreclosure suit at his troubled office tower at 575 Lexington Avenue after failing to work out a restructuring deal on $325 million in loans. Silverstein, president of Silverstein Properties and the famed developer of the World Trade Center, has been in talks with a special server for nearly 11 months after originally buying the skyscraper for $400 million in 2006. LNR Property, based in Miami Beach, filed suit on behalf of the lenders Jan. 25 in New York State Supreme Court. Silverstein paid too much for the property and would have needed to raise rents to as much as $80 a square foot to make a profit, but the building is now asking only $50 a square foot since the downturn.

The new owners of the Buckingham Hotel are closing down the 100-room property at 101 West 57th Street at the end of the month for a major, two-year-long renovation project. All 33 employees will be laid off. As The hotel, which has housed cultural icons including tenor Giovanni Martinelli and painter Georgia O'Keefe in its 82-year history, changed hands in July when a partnership sold it for $60 million to Hartford, Conn.-based UBS Realty Investors. The Buckingham would eventually reopen as a hotel.

M&T Bank has reached a tentative agreement to sell the former Verizon tower at 375 Pearl Street to a joint venture of YoungWoo & Associates and Seattle's Sabey for over $100 million. Verizon sold the 32-story tower for $172.5 million in 2007 to Taconic Investment Partners, which had planned to wrap the gray fa├žade in glass and renovate the 700,000-square-foot property into a modern office tower. But those plans never materialized, and M&T took control of the mostly-empty building last year after Taconic defaulted on its mortgage payments.

Costas Kondylis' 88 Leonard Street, the 352-unit Tribeca rental building developed in 2007 by Africa Israel and former partner Shaya Boymelgreen, could garner as much as $200 million in a sale. The 21-story building, which contains11,365 square feet of retail space and sits above a 249-space parking garage.

Despite rising interest rates, mortgage applications were up 11.3 percent in comparison to their level during the Martin Luther King Day holiday week that preceded it. However, purchase applications were flat over the last two-week period and refinance applications declined by around five percent. Last week, the 30-year fixed-rate mortgage saw its average contract interest rate increase to 4.81 percent, from 4.8 percent one week earlier. The 15-year mortgage similarly saw its rate rise to 4.13 percent from 4.12 percent in the week-ago period.

The appetite from large tenants for big blocks of space seen in 2010 continued last month, with Hong Kong-based apparel company Li & Fung taking nearly 500,000 square feet in the Empire State Building, amid reports that Nomura Holding America might lease about 600,000 square feet at Worldwide Plaza. The increase in activity, especially in Midtown and Midtown South, has driven asking rents and net effective rents up. It is also led forecasters to reassess their projections and predict record rental levels in the coming years. But despite that improvement, Downtown still remains a drag on the Manhattan office market, as it has for the past year. Leasing volume there significantly trailed other Manhattan markets in 2010.

The State Senate voted 45 to 17 in favor of the property tax cap bill Gov. Andrew Cuomo proposed, and now the spotlight is shifting to the Assembly, where support for the measure is less than assured. Whereas Senate approval was expected, the chamber has passed limits on property taxes in recent years under both Democratic and Republican majorities, several Democratic Assembly members haven't been as enthusiastic thus far, and were offended that Cuomo sprung the bill upon them with no advance warning to get it passed before today's release of his executive budget.

Long Island City's 2,084 rental apartments were 94 percent leased at the end of 2010, with just 125 units available. Rents averaged $1,500 to $4,617 per month, depending on whether the apartments had elevators and doormen. Meanwhile, apartments sold in the mid-$600-per-square-foot range over the course of last year, with the highest price per square foot, $678, on one-bedrooms.

The federal Making Home Affordable Program received a dismal review in the January Housing Scorecard from the Department of Housing and Urban Development, after it was revealed that roughly one out of every five mortgages modified in the plan falls back into default within a year. The program, aimed at helping homeowners avoid foreclosure, has seen limited success since it was unveiled in fall 2009, with few participants reaching a permanent mortgage modification, despite ongoing support from the Obama administration. And while around 20 percent of homeowners default after a year in the program, 15.9 percent are upwards of 60 days late on payments after nine months.

A New York Building Congress analysis of data from McGraw-Hill Construction data found that $19.5 billion worth of construction projects started in 2010, a 15 percent increase from 2009, when $16.9 billion in projects began. The 15 percent increase was a direct result of gains in the non-residential buildings sector, which includes offices, hotels, schools, hospitals, transit stations, power plants and other institutional buildings. Construction starts in this sector increased 34 percent to 13 billion, from $9.7 billion in 2009. However, residential construction starts reached just $2.2 billion in 2010, a decline of 14 percent from the previous year and 63 percent from 2008.
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