Major DevelopmentsDespite a slight rise in the vacancy rate, which rose .5 points to 9.3 percent on top of the decline in asking rents. To illustrate the demand can be seen by a new retailer trying to elbow into the high-traffic area, an existing store agreed to relinquish its space after its lease was bought out.
New York City had $4.74 billion worth of delinquent commercial property loans as of Oct. 1, down 0.6 percent from one month ago, when there was $4.77 billion outstanding. The decline can be largely accounted for by Joseph Moinian's 1775 Broadway which had been more than 90 days delinquent in August but has since sold off a $248 million loan to a joint venture led by the Related Companies and Deutsche Bank AG. The venture may be angling to foreclose on the property now known as 3 Columbus Circle, and Related may want to demolish the existing office tower and build a retail mall and 135-unit residential condominium in its place, whose units would sell for over $2,000 per square foot. Meanwhile, several other high-profile properties, including a landmark building on East 42nd Street and Brooklyn's famed JC Studios, spiraled into default, so that the city's total delinquent loan balance fell only slightly from August.
The Empire State Building's financial situation improved in 2009 with a doubling of net operating income from the prior year. However, it was unable to accomplish its major financial goal of obtaining large loans to fund an anticipated 10-year, $626 million rehabilitation of the building. The net operating profit for the 2.8 million-square-foot office tower at 350 Fifth Avenue was $16 million in 2009, up from $8 million in 2008. Yet, it was still far below the $35 million profit earned in 2007. Both Empire State Building Associates and the building's operating entity, Empire State Building Company, are controlled by Malkin Holdings.
Bank of America is stopping all foreclosure sales and proceedings in all 50 states, although it's unclear how this action will impact homeowners who are currently negotiating with their lender. This is bad news for the housing market. The Charlotte, N.C.-based bank , the largest in the country, decided to halt foreclosures, following JPMorgan Chase and GMAC Mortgage's freezing of foreclosures to examine what it has been shown to be a flawed process for documenting and filing foreclosures.
Condominium unit sales in Manhattan dropped 34 percent from the end of June to the end of July, the largest decline for this time of year. The decline followed a 27 percent increase in condo sales from the end of May to the end of June, which was the largest May-to-June increase ever seen. These market dynamics were caused by a surge in condo sales at the low end of the spectrum during the month of June and a subsequent correction during July.
Deutsche Bank AG has unloaded $856.6 million in bonds tied to commercial property mortgages, the bulk of which are shopping centers and office buildings in New York, Pennsylvania, California and Arizona. Roughly $5.5 billion of commercial property debt has been sold thus far in 2010, up from $3.4 billion last year. Sales could reach $35 billion in 2011.
A $100 million fund was created for the Performing Arts Center at the World Trade Center site, as part of a master plan to use federal funds to redevelop Lower Manhattan and revitalize the cultural landscape there. The federal funds, which are being managed by the Lower Manhattan Development Corporation, will also be used for local infrastructure upgrades and economic development at the East River Waterfront Esplanade and Piers Project, plus the completion and maintenance of parks and transportation improvements.
While bedbugs have nabbed national headlines in recent months, Maciej Ceglowski, the founder of the Bedbug Registry, has been tracking them since 2006. Ceglowski started the site, where users can record bedbug sightings from across the U.S. and Canada, after an unfortunate encounter with a bedbug in a San Francisco hotel. The purpose was to provide a central online location to track bedbugs.
The developers of the Rushmore condominium at 80 Riverside Boulevard, a partnership between Extell Development and Carlyle Realty, are refusing to give up the fight for $16 million in security deposits, blocking the return of the money to 41 condo buyers at the West Side building, despite a Second U.S. Circuit Court of Appeals ruling last week. Stroock & Stroock & Lavan, the law firm holding the disputed deposits in an escrow account, is not allowing the money to be returned.
Non-profit group Broadway Housing Communities is joining forces with Harlem-born artist Faith Ringgold to create a children's museum in the base of a building on Coogan's Bluff at 155th Street and Saint Nicholas Avenue in Sugar Hill. The group plans to break ground on the Harlem project later this month, and open in 2012. It still has to get its plans which include 124 units of affordable housing approved by the City Council, where a hearing is scheduled. The museum, to be called the Faith Ringgold Children's Museum of Art & Storytelling, would occupy 18,000 square feet, and include a performance space, a library, a store and a café.
Rose Associates is taking over Tishman Speyer’s role as property manager for Stuyvesant Town and Peter Cooper Village prior to CWCapital Asset Management's thrice-postponed foreclosure auction.
New York City investments have begun to rebound in value over the past six months as debt capital has grown cheaper and more available. The bank, which was taken over by the Irish government in January 2009 to prevent its collapse amid billions of dollars in real estate-related losses, has been at the forefront of some of the city's most high-profile troubled condos, including Yair Levy's 225 Rector Place, which is scheduled for auction. Anglo was also behind Maurice Mann and Lev Leviev's record $426 million purchase of the Upper West Side Apthorp building in 2007, which has since turned into one of the most fraught over condo conversions in the city's history, and the bank lent generously to the Alexico Group during the boom. Anglo has recently been unloading much of its distressed debt at Alexico-developed hotels like the Alex, Flatotel and the Mark.
Governor Chris Christie of New Jersey is still deciding whether or not to uphold his decision to scrap the new rail tunnel linking the Garden State with New York City, the largest public works project underway in the country. Though Christie was supposed to inform U.S. Transportation Secretary Ray LaHood of his decision, he plans to receive recommendations from a working group and consider them over the next few days. Following his decision to scrap the tunnel two weeks ago because of runaway costs, Christie agreed to reconsider.
Eighteen months after filing the largest bankruptcy in U.S. history, mall owner General Growth Properties has received approval on the final stage of its restructuring plan. The plan, which was approved, will inject $7 billion into the company, the second-largest mall owner in the nation, and will split off a section of General Growth's holdings, including South Street Seaport, into a new company called Howard Hughes Corp.