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September 2011

September 2011 » Market Analysis » NY New Developments

September 2011 New York New Developments


Major NYC Developments

The London-based Children's Investment Fund inked its first New York City real estate investment this month, providing $250 million in first mortgages for Macklowe Properties' condominium conversion of the luxury apartment building 737 Park Avenue in Lenox Hill. The fund, makes investments in a wide range of industries globally, and gives a portion of its profits to children's charities around the world. "It is the first direct real estate investment we have made in New York,"

New York State Attorney General Eric Schneiderman is hindering federal efforts to negotiate a foreclosure settlement with Wall Street banks on behalf of homeowners, by insisting banks should pay for investor losses, too. In combating the robo-signing practice, the Obama administration "is very far down the road for a settlement that will create servicing standards, and will also result in a significant financial contribution towards helping homeowners," an administration official said, that is believed to be worth nearly $25 billion.

Two city agencies -- the City Planning Department and Department of Information Technology and Telecommunications -- have launched a new Web application called ZoLa that allows New York City residents to find zoning and land use information pertaining to a particular property or a wider geographic area, dating back to 2002. The system, available to anyone via the planning commission's website, is useful to consumers with an interest in restrictions on a certain building, or changes to land use being considered for their neighborhood. It lets users enter an address to quickly determine ownership, landmark status, zoning information and land uses of a property and its surrounding streets. It will also show the City Council member who represents that area.

Vornado Realty Trust's 350 Park Avenue office tower was put on Wells Fargo's loan servicer watch list this month after its income from rents fell to less than 110 percent of its debt payments. "The asset is currently generating insufficient net operating income to cover debt service and Vornado has been funding the shortfalls to date,". Income "is not currently expected to recover enough through re-leasing to eliminate the shortfall prior to the maturity of the loan." Vornado acquired the 538,000-square-foot building for $541 million in 2006.

While newer city buildings have been built to withstand even extremely rare and heavy earthquakes, older buildings from the mid-20th century might not be properly reinforced,. Frederick Schwartz, who designed the Staten Island Ferry Terminal, said that while buildings from the 1920s and 1930s with heavy masonry were probably secure, he would be concerned about skyscrapers from the 1940s and 1950s that might need to be reexamined and reinforced for the event of an earthquake larger than yesterday's. Those buildings, he said, pushed the envelope in terms of their thinness and the way their glass was constructed to withstand seismic events.

A U.S. District Court judge ruled against Joseph Moinian's Moinian Group in an escrow dispute with buyers at the W New York Downtown Hotel and Residences, a decision that lawyers say further establishes the applicability of the Interstate Land Sales Full Disclosure Act in New York condominium sales. Judge Robert Patterson rejected a motion to dismiss the case by the Moinian Group, which developed the 217-unit hotel and condo at 123 Washington Street, and argued that the federal ILSA law does not apply to condos, but was designed to protect consumers against fraudulent land sales. ILSA law requires developers of newly constructed condo buildings to file a property report and annual financial statements with the Department of Housing and Urban Development if a building has 100 or more units. The suits allege that Moinian allegedly failed to provide required disclosure forms to buyers, and continued to sell apartments after the agency ordered the developer to temporarily suspend sales at the building in late 2007

Jeff Horowitz of Bank of America Bank of America Merrill Lynch has named Jeff Horowitz its new top real estate banker. He will replace Ron Sturzenegger, who was chosen last week to run the bank's Legacy Asset division that will be handling its billions of dollars in troubled mortgages. Horowitz has been in charge of Americas real estate since 2009 and previously was Merrill Lynch global head of real estate before the merger. His new official title is global head of real estate, gaming and lodging.

When Swiss lender UBS AG called off negotiations to lease space at the World Trade Center as a result of disappointing second-quarter income earlier this month, it was reported the company was looking in other areas of the city. UBS is instead maintaining its flagship trading floor and other operations across Connecticut after the state agreed to provide the Swiss bank with a $20 million loan over a five-year period. Gov. Dannel Malloy said that the bank must maintain 2,000 jobs in Connecticut and spend the so-called forgivable loan over that period for infrastructure expenses to be eligible for the incentive. UBS' prospective move to New York would have cost the state $70 million in annual income.

5 Franklin Place is heading for a foreclosure auction Sept. 12. The building was purchased for $36.6 million in 2006 by an LLC called Franklin Place, which planned to build a 20-story 55-unit condo on the lot. But the development stalled, and during the depths of the recession the building was put on the market for $19.5 million.. Finally, Glacier Global acquired the mortgage in December 2010, and the property now has a lien of $47.04 million.

West 37th Street Partners LLC, a joint venture between the Albanese Organization and the Buccini/Polin Group, closed on its purchase of a Midtown parking lot at 312-318 West 37th Street for $20.8 million. The transaction, is slated to result in the construction of a brand new 300-room Garment District hotel between Eighth and Ninth avenues. Construction could start before the end of the year, sources told the

Forest City Ratner has filed its first application with the Department of Buildings for its planned construction of a residential tower at Atlantic Yards. The permit seeks to build a 33-story, 368-unit tower at Flatbush Avenue and Dean Street, right next to the arena. Half of the building's units will be affordable housing.

Around $6.4 billion worth of construction projects were started in the first half of 2011, a nearly 40 percent decline from the first half of 2010, when construction starts reached $10.6 billion. McGraw Hill data encompasses all new construction as well as alterations and renovations to existing structures. Construction starts in the non-building sector -- bridges, highways and mass transit -- fell by 38 percent, from $1.7 billion in the first six months of 2010 to $1 billion during the same period this year. Construction starts in the residential sector dropped to $840 million in the first half of 2011, compared to $1.3 billion in the first half of 2010.

Changes are afoot on 42nd Street. The Blackstone Group, owner of Midtown office tower 1095 Sixth Avenue, has finally filed demolition plans for 124 West 42nd Street, a vacant five-story building it owns. The demolition will make room for the company's long-awaited three-story, glass-enclosed retail building, which will contain 42,000 square feet. Highgate Holdings has also begun test borings at 136 West 42nd Street, its vacant lot slated to become a hotel. . Highgate is in contract to sell the new hotel -- which will have between 250 and 400 rooms -- to Diamond Rock Hospitality.

Some analysts believe that the only way for Bank of America to survive its crisis is to give up on being a large Wall Street and international bank and return its focus to deposit-taking and lending. Nancy Bush, a banking analyst of research at NAB, said that a large challenge for BofA is that in its national role, "the nation's problems are its problems." BofA CEO Brian Moynihan has said he is not interested in breaking up the bank, but considering the $9 billion of losses it suffered in the second quarter, its worst quarter to date, there may not be an alternative.

Proposed development plans were certified this afternoon by the City Planning Commission, marking the first step in the public review process for a mixed-use project by the Rudin family. Rudin, which purchased St. Vincent's property parcels in an area bound by 11th and 12th streets and Sixth and Seventh avenues for $260 million earlier this year, is proposing a 590,000-square-foot residential development with 450 units, 10,000 square feet of ground-floor retail, 20,000 square feet of medical offices, 15,000 square feet of public space and a 152-space parking garage at the site.

The Midtown-based investment firm Minuit Partners purchased a portfolio of seven buildings and a parking lot in Lenox Hill for $19.6 million. The package of buildings includes 46 apartment units, seven retail storefronts and about 175,000 square feet of development rights, giving it a price per foot of about $111. The seller was the estate of Arthur Brown, co-founder of a successful Manhattan plumbing company called Holby Valve, who died in 2007. At one time, Brown and his brother owned about two-dozen buildings, Brown's nephew and only surviving heir, Michael Fleischer, said. Although the portfolio was marketed as a potential development investment, the plan now is to lease the buildings up

Peninsula Hospital in Far Rockaway, Queens might declare bankruptcy tomorrow and is no longer accepting ambulance visits. Hospital officials are in last-minute negotiations with state health officials and potential buyers to try and keep the 200-bed facility open. The State Department of Health had set a deadline for the hospital to present a plan for its financial viability, or else shut down. Peninsula's parent network, Medisys Health, intends to withdraw its sponsorship after today. Tthe hospital owes tens of millions of dollars to the benefit fund of its main union and vendors. Its closure would follow that of other city hospitals such as St.

Robert Futterman, founder, chairman and CEO of Robert K. Futterman & Associates, was charged with driving while intoxicated in Bridgehampton Saturday night. The crime is classified as a felony under a law passed in New York State that imposes tougher sanctions on intoxicated drivers who have children in the car. Futterman was also charged with four counts of endangering the welfare of a child. It's not the first time high-producing real estate agents have been arrested for DWI on the East End.

There are just two timeshare-only buildings in all of Manhattan. And, at first blush, the owners of those timeshares -- at the 161-unit Hilton Grand Vacations Club on West 57th Street and the 300-unit Manhattan Club on West 56th Street -- appear to be struggling. Since opening in 2009, the Hilton Grand has seen 52 lis pendens, or pre-foreclosure filings, and six foreclosures among its timeshare owners. Meanwhile, the Manhattan Club has witnessed 17 lis pendens and 22 foreclosures since 2007.

The Witkoff Group, owner of one of the International Toy Center buildings located at 1107 Broadway, is joining forces with a Morgan Stanley real estate fund for a $290 million condominium conversion of the property featuring 145 units. The collaborators are still searching for a financing partner, but are expected to close the deal in the next month. Witkoff acquired the 16-story, 350,000-square-foot property for $190 million in a one-day auction in June by seller Lehman Brothers. A number of high-profile bidders attended the event, including CIM and William Macklowe, SL Green Realty, and L&L Holdings. Witkoff and Morgan Stanley anticipate spending $100 million to renovate the building.

Community members and city officials remain committed to building a 1,000-seat performing arts venue anchored by the Joyce Theater at the World Trade Center, especially in the lead up to the opening of the Sept. 11 memorial. A new board is currently being formed to oversee its creation. "Between now and the 10th anniversary, the focus will be on getting the memorial open and preparing for the anniversary, but as we get to this fall, everyone's going to say. With construction still six years away, the Lower Manhattan Development Corporation has allocated $155 million for the Frank Gehry-designed project, which is estimated to cost $400 million to $500 million.

A recently launched lodging real estate investment trust led by Black Entertainment Television founder Robert Johnson gave up to its lender a 438-room Marriott hotel near LaGuardia Airport that it acquired in 2007 for $69 million. Johnson's RLJ Lodging Trust, one of several entities that make up his Bethesda, Md.-based RLJ Companies, turned over the 10-story property at 102-05 Ditmars Boulevard in East Elmhurst to lender Capmark Financial Group. The Aug. 5 deed-in-lieu transfer, which had been long expected, valued the property at $61 million, $3 million over the $58 million first mortgage.

Half of the bidders in the war over Anglo Irish's $9.5 billion U.S. real estate portfolio are now out of the race, , including TPG Capital, which was once considered a front-runner. While several of the firms are vying for specific parts of the portfolio, and includes both performing and non-performing loans, others such as a Blackstone Group partnership, a partnership which includes LNR Property and Lone Star Funds are looking to bag the whole lot. Others that made it to the second round include Colony Capital, H/2 Capital Partners and Area Property Partners. The portfolio includes a loan on the Apthorp building at 390 West End Avenue.

The National Basketball Association has signed a temporary retail lease at 590Fifth Avenue,. The NBA will occupy two levels totaling more than 6,000 square feet with 20 feet of direct frontage on Fifth Avenue.

The New York City home sales volume declined 20 percent between the first and second quarters of the year, and is down 40 percent compared to March through June of 2010. Though the sales volume declined, home prices increased citywide by about 6 percent from the first quarter to the second quarter of 2011, but remained 21 percent below their peak in the fourth quarter of 2006.

Brooklyn Bridge Park is considering acquiring a three-acre parcel of vacant land near the Manhattan Bridge from Con Edison to complete its plans for an 85-acre waterfront park. The site, on John Street between Adams and Jay streets, would have an apartment tower up to 130 feet tall, a tide pool and additional parkland. Both sides confirmed they are currently in negotiations.

The Architects' Billing Index has fallen at its steepest rate in a year and half last month, according to a report released by the American Institute of Architects yesterday. Following a drop of almost a full point in June, the ABI fell again by more than a point in July. The ABI reflects the approximate nine- to 12-month lag time between architecture billings and construction spending. The July ABI score was 45.1 -- the steepest decline in billings since February 2010.

A demolition permit was filed this week for 437 West 13th Street, for a controversial 10-story, 175-foot office tower planned by Romanoff Equities adjacent to the High Line. Romanoff has been battling with City Planning to maximize the size of the glassy tower, initially filing plans for a 250-foot with the expectation of a zoning variance that would clear the way for the building to exceed zoning regulations by 66 percent. Romanoff claimed that because the High Line ran through the property, it would need to build larger to recoup its investment.

New Jersey-based Investors Bancorp acquired Brooklyn Federal Bancorp for $10.3 million, while unloading most of Brooklyn Federal's commercial real estate loan portfolio to a separate, unnamed, real estate investment fund. Brooklyn Federal is the parent company of Brooklyn Federal Savings Bank, which has five branches in Brooklyn and Long Island and has $470 million in assets and $411 million in deposits. With Brooklyn Federal in tow, investors will have $10.7 billion in assets, $7.2 billion in deposits and 85 branches in New Jersey, Brooklyn, Queens and Long Island..

The Real Estate Board of New York strongly criticized a tentative deal between concrete workers and an industry association that averted a strike last night, saying that the agreement won't be enough to stem a tide towards non-union construction. REBNY also said that the agreement wouldn't offer enough cost-savings for developers. The deal involves wage increases of approximately 8 percent over three years and a 20 percent wage reduction on hotel and residential buildings of 16 or fewer stories.

Midtown-based Signature Theater Company has closed on its purchase of a commercial unit at 450 West 42nd Street for $6.666 million. The purchase is a key step towards the completion of its new $60 million home within MiMA, the Related Companies' high-rise mixed-use development, which is also home to the Yotel Hotel. The facility is due to open in February 2011. " The Frank Gehry-designed 70,000-square-foot center will feature three theatres, including a 199-seat proscenium theatre, a 199-seat flexible courtyard theatre and a 299-seat end stage theatre, as well as a rehearsal studio, café, bookstore, and offices all on one level.

Madison 92nd Street Associates, an affiliate of Madison Equities and owner of the Upper East Side Courtyard by Marriott at 410 East 92nd Street, has filed for bankruptcy protection in an effort to prevent a foreclosure sale of the property and is working with Westport Capital Partners to line up refinancing. The corporation listed assets of as much as $500 million and debt of as much as $100 million, according to the filing. The New York State Department of Taxation and Finance holds the biggest unsecured claim of $679,581, , and lender General Electric Capital, owed $74 million, has scheduled a foreclosure sale for Aug. 24.

The New York City Housing Authority will face a $200 million budget shortfall that could result in 3,000 service job layoffs or 70,000 apartments going without "even basic repairs,". Despite some federal financial assistance during the recession and the sale of some assets, NYCHA is in dire straits because Congress has allocated less than $4 billion to national public housing authorities, despite the $5 billion City Limits said the agencies need to fully operate. The budget shortfall has become a growing problem for NYCHA, as public housing complexes in the East Village and Lower East Side, in particular, have more than 100,000 backlogged repair orders, according to previous reports, and undermanned safety inspectors are allegedly taking shortcuts to meet quotas.

Elizabeth Arden's famed Red Door Spa, located for 81 years at 689-691 Fifth Avenue is moving two blocks south to a new location, at the Ferragamo building at 655 Fifth Avenue. The Elizabeth Arden spa, which occupies multiple levels at Vornado Realty Trust's landmarked building at 689-691 Fifth Avenue, at the corner of 54th Street, will lease the eighth-floor space at Madison Capital's 655 Fifth Avenue, at the corner of 52nd Street, the sources said. The spa occupies the mezzanine, and floors seven through 10, for a total of 28,632 square feet. The ground floor is used for retail sales, while the upper floors are for the spa services.

Some of the largest pension funds in the U.S. are beginning to retreat from trophy properties in the most expensive real estate markets after increased demand for a limited number of buildings considered low-risk boosted prices of big-city skyscrapers to record levels. Funds are worried that a new bubble may be inflating. "Major coastal markets have seen significant price appreciation that has not coincided" with increases in either occupancy or rental rates. "We believe the reason for this pricing increase" for the buildings in these markets "is a significant demand for core assets from private and public buyers along with overseas investors." An index of commercial property values by Green Street Advisors, tilted toward high-end and trophy buildings, has jumped more than 45 percent since 2009 and is only 10 percent below its all-time highs.

Bank of America is simultaneously considering selling its real estate assets held by Merrill Lynch to Blackstone Group for $1 billion, and settling on a foreclosure agreement that would still allow New York State Attorney General Eric Schneiderman to continue his ongoing probe into the bank's foreclosure practices. The assets up for sale include properties in Europe, the U.S. and South America. The bank hired Blackstone to manage $2 billion worth of Merrill's Asia real estate holdings, but it appears BofA will retain ownership of those investments. The bank's foreclosure agreement would pacify several state attorneys general investigating it among a larger group of mortgage servicers for allegedly using fake documents to pursue foreclosures.

Having closed on its acquisition of the remaining stakes in the Chelsea Market building at 75 Ninth Avenue, Georgia-based real estate firm Jamestown Properties now owns the entire property, valued at $795 million. Jamestown, an investor in the property since 2003, recently bought out Angelo Gordon & Co., Belvedere Capital Real Estate Partners and Chelsea Market developer Irwin Cohen for $225 million and aims to add a 300,000-square-foot tower to the building, to be used either for additional office space and a hotel. The 1.183 million-square-foot building takes up the entire block between 15th and 16 streets and Ninth and 10th avenues and is 99 percent leased, to tenants like the Food Network, NY1, Time Warner, EMI and Google, as well as the retail and food court on the first floor.

The architectural design of Hunter College's new Silberman School of Social Work's new East Harlem campus helps allows the building to fit into the surrounding area, minimizing any perceived alienation of nearby residents. Scott Newman, of Cooper, Robertson and Partners, said that his goal was to give passersby a sense of what is going on inside the school at its new location on third Avenue, between 118th and 119th streets. "It's not just some satellite of Hunter College, plopped down in the middle of Harlem... It's not some closed space where some mysterious scholastic activity is going on."

A new elementary charter school will most likely move in to the Brandeis Educational Campus at 145 West 84th Street after a State Supreme Court Justice dismissed a lawsuit by parents blocking the move. The Upper West Success Academy would be joining five other public schools in the space. Parents had criticized the proposal because they feared the school would cause overcrowding or take away arts facilities the other schools use. City officials had argued that the complaints about the location should have gone to state officials first before starting the lawsuit. The legal battle is just one of many as the Bloomberg administration has pushed the expansion of charter schools throughout the city. Recently residents filed a lawsuit to stop the construction of the charter school Harlem Children's Zone in St. Nicholas Houses.

The MTA's finance committee approved the deal for Apple to lease the 23,000 sf at the end of July. Apple is taking over the space from Charlie Palmer's Metrazur restaurant, and will be paying significantly higher rent: $1.1 million compared to $263,997. Apple will also be making improvements to part of the leased property at its own cost, including the installation of an elevator.

Mayor Michael Bloomberg will pick Albert Laboz's United American Land to redevelop the Brooklyn Municipal Building in Downtown Brooklyn as a retail destination. The city has been in the process of relocating its offices in some prime Downtown Brooklyn buildings, including the municipal building at 210 Joralemon Street.

The total dollar amount of Manhattan assets classified as distressed has halved since 2008, a sign that the market is rebounding at a healthy pace. Three years ago, $30.6 billion of assets in Manhattan was in foreclosure, bankruptcy or in the process of having its loans modified. The figure has dropped to $15.2 billion, and 30 percent of that dollar amount is tied to apartment complex Stuyvesant Town and Peter Cooper Village. "This happened faster than we would have imagined,". The drop in distressed properties can be attributed to an accumulation of single transactions, , and bigger landlords buying up distressed loans. Vornado Realty Trust, for example, bought up three of the eight large distressed assets sold in the first half of 2011, including a stake in 280 Park Avenue.

SL Green Realty has stepped in to help developer Joseph Moinian stabilize his investment in 180 Maiden Lane, a 1.1 million-square-foot office building in Lower Manhattan, but Moinian will pay heavily for the aid. SL Green, a mezzanine lender on the downtown property, has agreed to help Moinian restructure $292 million worth of debt in return for an ownership stake of 49 percent in the office tower. Moinian's debt on the building reached special servicing early last year, but he managed to extend deadlines to 2012, Another deadline is on the horizon however, as an 800,000-square-foot lease by American International Group is set to expire in 2014.

John Lam, founder of the Lam Group Hotel developer the Lam Group has gone into contract to buy two buildings on Broadway at 30th Street from Mocal Realty for $72 million, possibly for a new hotel development, Real Estate Weekly reported. Together, the two buildings, at 1205 and 1225 Broadway, make up around 250,000 square feet of developable space and up to 370,000 square feet if Lam chooses to purchase adjacent properties that are also on the market.

The Landmarks Preservation Commission has voted unanimously in favor of the designation of a prominent Beaux-Arts bank building at the base of the Manhattan Bridge.. The domed building, at 58 Bowery at the corner of Canal Street in Chinatown, previously housed the Citizens Savings Bank. "

Investa Property Group, one of Australia's largest owners and managers of real estate, is finally interviewing New York City-based brokers to manage the sale of its 49 percent stake in 900 Third Avenue, , acquired the stake from the Paramount Group for only $107.7 million.. The building carries a $270 million mortgage from 2007. The 36-story, 595,105-square-foot Class A tower is approximately 90 percent leased.

A building with rental units for moderate-income families, retail space and an underground parking garage will be erected on a stalled site in Prospect-Lefferts Garden that was originally envisioned as a 32-story condominium building.,The property spanning 31 Lincoln Road and 510 Flatbush Avenue was sold for $6.5 million, The 26,282-square-foot vacant lot, close to Prospect Park and the Brooklyn Botanic Garden.

The largest rooftop hydroponic greenhouse in the country is close to coming to Long Island City. Brightfarms, a Manhattan-based firm that designs, builds and operates high-tech farms, is in the final stages of negotiating the lease of a 32,000-square-foot space on top of a building near LaGuardia Community College, the New York Daily News reported. The company will not only move its headquarters there, but also plans to invest $1 million to build a 25,000-square-foot rooftop hydroponic greenhouse, in addition to building 7,000 square feet of office space. The project will bring 25 jobs to Queens the first year and 30 over the following two years. The plan is for the construction to take place this coming March, so that by the end of the spring the farm can produce 200,000 pounds of fresh produce annually for the local markets. Hydroponic systems are a method of growing plants using nutrients in water without soil.

Mayor Michael Bloomberg has submitted an official challenge to New York City's 2010 census results to the U.S. Census Bureau, according to a letter released by the mayor's office today. In the letter to Census Bureau director Robert Groves, Bloomberg states that the city believes housing units in Bay Ridge and Bensonhurst as well as in Astoria and Jackson Heights were erroneously counted as vacant. Rather, Bloomberg writes, data shows those neighborhoods are growing and vibrant parts of the city. --

The city has created a new list of buildings throughout the five boroughs that are at risk of complete deterioration, Crain's reported. The list, on the Department of Housing Preservation and Development's website includes 34 buildings in Manhattan, Brooklyn and the Bronx that are at risk based on their number of housing code violations. It was created after a roof-to-cellar inspection by the city's Proactive Enforcement Bureau, which was created as part of the new Proactive Preservation Initiative that surveyed 335 residential buildings. The list will be updated every six months and allow for the tracking of the landlords' efforts to correct the problem.

Masterworks Development, owner of the Jewel Hotel, has completed the sale of its 4,000-square-foot retail condominium at 11 West 51st Street, at the base of the hotel, for $17.5 million, The buyer of the property, near the entrance to Rockefeller Center between Fifth And Sixth avenues, was Queens-based real estate holdings company Samson Management. The condo is currently fully leased to Banco Popular.

A federal judge has ruled that 2009 agreements between the city and construction unions designed to save $300 million on public construction projects over four years are within the scope of the law. The judge's ruling came in response to a lawsuit brought by the Building Industry Electrical Contractors Association and the United Electrical Contractors Association, alleging that the deals violated the National Labor Relations Act and state competitive bidding statutes. The comprehensive pre-hire collective bargaining agreements laid out employment conditions for everyone involved with $6 billion in infrastructure projects through 2014.

Though still below 2008 levels, new construction permits in New York City are on the rise, an indication that developments may be back on track. Permits for new buildings, alterations and demolition rose by approximately 12 percent during the first half of 2011. Demolitions -- normally a firm indicator of brand new projects -- jumped by 14 percent.

Colorado-based UDR announced today that it entered a "definitive agreement" to acquire Dwell 95, a 507-unit Financial District apartment complex owned by the Moinian Group, for $325 million. The deal brings the company closer to its planned $1.8 billion investment in New York City multi-family properties. Located at 95 Wall Street,

A Bronx elementary school is looking for a new home after a routine test for toxic chemicals during its lease renewal revealed 10 times the limit of TCE, or trichloroethylene, which could cause serious nerve, liver and kidney problems, CBS Channel 2 reported. The Bronx New School had been located in the red brick industrial building at 3200 Jerome Avenue in Norwood. As a result, the Department of Education decided students would not be returning there this fall and is looking for a new building. It is not clear how long the toxic chemicals have been there.

Riverdale's Stella D'oro cookie factory will be sold to developers Metropolitan Realty Associates and Angelo, Gordon & Co. to build a shopping center. The new 162,000-square-foot center will most likely be anchored by a BJ's Wholesale Club.. The bakery is being sold by Brynwood Partners, a private equity fund based in Greenwich, Conn. Terms of the sale were not available but the facility was listed in the low $20 million range.

Jared Kushner intends to transform Soho's landmarked Puck Building into luxury penthouses, with a private lobby and entrance on Lafayette Street. The Kushner Companies principal has planned six units at the Puck Building at 295 Lafayette Street that will range in size from 5,000 square feet to 8,500 square feet and range in price from $15 million to $50 million, along with a small rooftop addition still to be approved by the Landmarks Preservation Commission. "They are designing six, very customized high-end homes with great finishes, big closets and layouts planned as if they were moving in themselves..


Albert Lowenthal, CEO of Oppenheimer, and 85 Broad Street In a large-scale restructuring of its New York City offices, financial services firm Oppenheimer & Co. is investing $15 million in the opening of its new headquarters at 85 Broad Street. The company will be consolidating its current headquarters at 125 Broad Street and other city offices including 200 Park Avenue and 300 Madison Avenue at the location. The expansion is slated to create 100 new financial services jobs.

Landlord Steve Witkoff has failed to meet a deadline to file an appeal to a court decision barring him from increasing rents at Columbus 95, meaning that tenants in the rent-regulated apartments are free of rent hikes. Witkoff had previously attempted to use a legal technicality to increase rents at the building, which was once part of the city's Mitchell-Lama program. Following the 2006 acquisition of Columbus 95, which is at 95 West 95th Street, for $68 million, the Witkoff Group applied for rent increases for 248 individual apartments, but the applications sat at the state Division of Housing and Community Renewal for more than a year.

The Griffin Court Condominium in Hell's Kitchen is seeing a surprising surge in sales, according to the property's developer Alchemy Properties, which is marketing the building with Halstead Property. Sales went from 15 percent sold to 50 percent sold with the closing of 20 units in the last two months. --

In Bedford, blacks are a minority for the first time in 50 years Several neighborhoods are changing significantly along ethnic and racial lines, the 2010 census reveals, according to news reports. In Bedford Stuyvesant, for example, the population is only 60 percent black, the New York Times reported, down from 75 percent. And in the older Bedford section, blacks have become a minority for the first time in 50 years. John Mollenkopf, director of the Center for Urban Research at the Graduate Center of the City University of New York, attributes the change in the neighborhood to the fall in the crime rate and improvement of subway conditions.

CIM Group is close to purchasing a defaulted loan on a vacant site on Madison Avenue at 33rd Street from Garrison Investment Group. Originally, NMP Group had bought an office building at 172-174 Madison Avenue for $15.9 million four years ago and a lot adjacent to that property, and planned a 33-story tower with a 100-room hotel and 69 condominium apartments above it. The seven-story office building on the property has since been demolished and in 2009, NMP Group defaulted on its $29 million loan from UBS. Both CIM Group and Garrison Investment Group declined to comment. CIM has also been buying other troubled properties such as an extended-stay tower at 47 East 34th Street.

Hospitality Trust paid $28.7 million for 32 Pearl Street a lowrise, along with the adjacent 6 Water Street which the previous owner had paid $56 million in 2008. The small buildings remained standing even though Chang initially planned a tall hotel at the site. The new owner plans to build an 81-room Hampton Inn at 32 Pearl Street and is not buying 6 Water Street. But Hersha does not intend to tear the property down, and instead plans a rehabilitation and conversion by adding additional floors to the seven-story building.

New York City real estate company 785 Partners LLC, owner of 785 Eighth Avenue, has filed for Chapter 11 bankruptcy protection, Bloomberg News reported, citing assets and debt of $100 million to $500 million in documents filed yesterday in U.S. Bankruptcy Court. The company's 566-foot glass sliver tower at 48th Street, nicknamed the sliver tower, was co-developed by Esplanade Capital, led by Jay Eisenstadt and David Scharf, and designed by Ismael Leyva Architects. The 43-story building has been frozen since last year while an $84 million foreclosure suit wound its way through the courts.

New York landlords who haven't repaid the city for addressing dangerous conditions in their buildings have run out of time, as yesterday marked the deadline for paying off emergency repair liens before the liens were sold to investors. This is the first time the city has sold the rights to collect charges for repair services. "This should be a wake-up call for landlords who think they can continue to use the city as their personal repair team," said Douglas Apple, first deputy commissioner at the Department of Housing Preservation and Development. An estimated $6.6 million worth of liens will be sold off in the next few days, a spokesperson for the Department of Finance said. More than 700 properties around the city needed $12 million in repairs when the department first drew up a list of potential liens in May.

New development condominium sales are up year-over-year in both Manhattan and Brooklyn for the second quarter of 2011, according to a second-quarter new development report released today by residential real estate firm MNS. In Manhattan, condo sales prices were up 18 percent on an average compared to the second quarter of 2010, the report says. Compared with the first quarter of 2011, the average Manhattan new development price was virtually flat. Even though some condo sales are seeing strong sales, several real estate professionals told The Real Deal earlier this spring that many challenges lie ahead.

Glenwood Management has acquired a stalled Midtown West development site for $76.3 million after purchasing the distressed mortgage last year and suing to foreclose on the original developer. The site, on the west side of Eighth Avenue between 46th and 47th streets, was originally conceived of as a 38-story hotel and condominium tower by Tribeach Holdings, but work stalled in late 2008 when the economy began to slump.

The Flatiron Hotel, which has been the focus of acquisition talks with controversial real estate figure Robert "Toshi" Chan, is facing a foreclosure suit by a Long Island bank, which alleges the owners defaulted on $8 million in loans. Glen Cove, N.Y.-based First Central Savings Bank filed suit in New York state Supreme Court July 22, alleging the hotel's loan guarantors -- Ibrahim Saleh, Main Team Hotel and Ming Chu Co. -- defaulted on a $5.1 million first mortgage and a $2.99 million second mortgage. The suit also names Smart Apartments, the firm that previously operated under the name Toshi Apartments, because of a ground lease that the firm recently acquired at the hotel.

German real estate investment firm GLL Real Estate Partners has bought 4 Columbus Circle for $96.5 million from Cerberus Capital Management. The 135,000-square-foot building at West 58th Street and Eighth Avenue is 86.5 percent leased. Furniture manufacturer Steelcase leases 76,000 square feet of the building..

The Potamkin family is planning the sale of entire East Harlem block at 2485 Second Avenue between East 127th and 128th Streets with the potential for 765,000 square feet of housing,. Potamkin operates a Hyundai and Mitsubishi dealership in one building on the block and leases out another former General Motors dealership to Chevrolet and Cadillac. Potamkin, thinks the city will allow a rezoning of the 103,000 square foot block. He's also open to offers for leasing and adaptive reuse of the 200,000 square foot building and 60,000 square feet of currently unused floor area..


Public and private institutional investment in New York City remained strong even in the recession with new construction starts worth $11.4 billion from June 2008 to May 2011, according to a report released today by the American Building Congress. Even though the value of new construction starts fell $3.2 billion between June 2010 and May 2011, the report notes that that figure did not include several large projects that had not officially been recorded as of May 31. Those include the $680 million Whitney Museum project near the High Line and Fordham University $250 million multi-use facility near Lincoln Center.

Downtown Brooklyn's long-standing push to attract more national retailers is about to take a huge step forward, as the city's Economic Development Corp. closes in on selecting a developer for the first-two floors of the Brooklyn Municipal Building. The city has been vacating its office spaces in the lower levels of prime Downtown Brooklyn buildings and moving to higher floors to free retail space and bolster local development. The EDC issued a request for proposals for the 37,000-square-foot space in the municipal building at 210 Joralemon Street in December, and also vacated nearby 345 Adams Street, which has already signed leases with Panera Bread and Morton's Steakhouse.

The New York State Retirement Fund entered a $1 billion joint venture with Houston-based Hines, to develop, own and manage corporate and medical office properties with single-tenant users in the U.S. The venture, called Hines Corporate Properties II, will follow a similar plan to the previous venture that operated between the two entities from 1997-2004. Under that venture, the two companies developed a portfolio of 3 million square feet, developing six built-to-suit offices and buying three single-tenanted building. "

A group led by Tishman Speyer has sold Two Gotham Center in Long Island City at a $100 million profit, for $415 million,. H&R Real Estate Investment Trust, a large Canadian public company, bought the 670,000-square-foot property, which is leased by the city's Health Department. The building was completed a year ago and cost $316 million to develop. So far, Two Gotham Center is the only part of the planned 3.5 million-square-foot mixed-use complex to be developed near Queensboro Plaza. Tishman Speyer and the city are jointly the backers of the project. It wasn't immediately clear why the group sold Two Gotham Center.

UDR, paid $443 million for the Rivergate apartment building in Murray Hill, plans to make a total investment of up to about $1.8 billion in Manhattan rental properties in coming years, company officials said. "If you were to say $1.5 billion to $1.8 billion in New York City is a reasonable target over the next couple of years, that is probably the right kind of number," said Harry Alcock, senior vice president of asset management. That total includes $840.7 million in deals completed or in contract this year. The company, based in Highlands Ranch, Colo., is winning deals even as it is facing potential competition from more experienced, local players such as Stonehenge Partners, Macklowe Properties and others.

The Columbia University School of Social Work is a winner, and 230 Park Avenue is a loser in energy efficiency so far among New York commercial buildings participating in the Environmental Protection Agency's second annual "Battle of the Buildings," according to the program's website. Two hundred and forty-five buildings across the country are competing improve their energy efficiency in the competition organized by the Environmental Protection Agency's Energy Star program, according to the program's website. --

World Trade Center construction site Hundreds of unionized cement and concrete workers have walked off the job at the World Trade Center site in response to the cement league trying to cut their pay by up to 20 percent, NY1 reported. The walk-out may spell a strike, since the concrete workers have been working without a contract since July 1, but the Port Authority of New York & New Jersey says it will have no effect on the Sept. 11 memorial construction schedule. "It's a horrible situation, you know? We built this city and they want to take money away from us, in this bad economy," said John Hardt, a member of the Cement and Concrete Workers Union.

New York-based investment firm Paramount Group has recapitalized a 49 percent interest in its
2.5 million-square-foot office tower at 1633 Broadway, between 50th and 51st streets,after Morgan Stanley, Bank of America and Merrill Lynch affiliates exited the building partnership. Paramount's new partners in the 48-story, Class A property include affiliates of Beacon Capital Partners and Paramount Group's Real Estate Fund IV. In addition, SL Green Realty also acquired a preferred equity interest. Paramount retained its 51 percent controlling interest. "SL Green is making a preferred equity investment and Beacon is acquiring the remaining limited interest in the property."

Swiss lender UBS AG has called off negotiations to lease space at the World Trade Center as a result of disappointing second-quarter income,. The bank had apparently been considering a move to Lower Manhattan from its current U.S. headquarters in Stamford, Conn. "UBS has been conducting a review of its real estate requirements in the tri-state area," UBS said in a statement. "Part of this review involved discussions with World Trade Center management in downtown Manhattan. These discussions have been productive, but we are focused on Midtown alternatives at the present time." The Zurich-based bank had been rumored to be a leading candidate to anchor Larry Silverstein's 3 World Trade Center.

Two under-the-radar but well-financed real estate investors, Joe Tabak and Joseph Cayre, are fighting over a valuable Williamsburg development site on Bedford Avenue that each is trying to buy out of bankruptcy for as much as $22 million. Yesterday, attorneys began to lay out competing plans to purchase the Backer Group's 240-246 Bedford Avenue, at North 4th Street, in federal bankruptcy court in Brooklyn, but after several hours the hearing was adjourned until Sept. 7, according to a legal source and court records. [more]

Developer Sheldon Solow met with city officials last week in a last-ditch effort to plead his case for constructing the new United Nations building to make better use of nine acres he owns along First Avenue just south of the current United Nations site, Crain's reported. Solow's plan to construct seven towers on his property has stalled, so he wants the city to consider it for the United Nations project, Crain's said. Solow proposes that the city build the new tower on his nine-acre site, or across the street from the current U.N. building, at Robert Moses Playground on First Avenue and East 42nd Street, and replace the playground on his property. Solow already sold part of his massive First Avenue holdings to the city for $33 million in 2010. [more]

Developer Yair Levy has filed to overturn the $7.4 million judgment and a banishment from selling real estate by Attorney General Eric Schneiderman, after a state Supreme Court judge ruled that he took millions of dollars from the Rector Square condominium reserve fund. Supreme Court Judge Joan Lobis, in a June 22 ruling, found that Levy defrauded the Battery Park City condominium by failing to deposit millions of dollars into building's reserve fund and then spending some of those funds on personal expenses, including charge cards and mobile phone accounts [more]

Not only are Chinese banks investing millions of dollars in New York real estate, but Chinese business people are also increasingly buying luxury condominiums in Manhattan. The average sale is a one-bedroom apartment for about $1.45 million. Many of them are purchasing the properties as second homes or as housing for children studying in New York.

The city is issuing a request for expressions of interest (RFEI) as it seeks to redevelop two parcels of land on Staten Island's St. George waterfront. The two sites, located close to the St. George Ferry Terminal, are currently used as parking for the Richmond County Bank Ballpark and the St. George Ferry Terminal. Combined, the two sites will provide more than 14 acres of waterfront development, with the site to the north of the ballpark totaling approximately 7.4 acres and the site to the south approximately 6.7 acres.

Toll hikes on the George Washington Bridge and the Holland and Lincoln tunnels, pushed by Port Authority of New York & New Jersey chiefs, are a means to cover up wild overruns in costs at the World Trade Center site. Rebuilding the site will apparently cost about $2 billion more than was forecast 2008 in the official financial plans by agency head Chris Ward.. "Construction has gone over budget by $186 million at Silverstein Properties' 1 World Trade Center, work on the transportation hub has run $200 million over budget and other work on the site's infrastructure has surpassed expected costs by $422 million. [more]

Kent Swig's former mammoth office building at 25 Broad Street may have finally come back to life as a 305-unit rental property thanks to Lehman Brothers Holdings, the Wall Street Journal reported, after 80 percent of the 90 available units were rented in just two months. With applications under review for the remaining units, more are now under renovation,. The project offers 305 one- and two-bedroom units, with 35 different floor plans and rents starting at $3,133 and $5,205 per month, respectively. Lehman took over the building after Swig defaulted on his mortgage in 2009. Swig paid $262.5 million to buy the former office property in 2005. Swig had previously intended to transform it into a luxury condominium building.

Even though the city Board of Standards and Appeals approved developer Patrick Thompson's $160 million plan to transform the old RKO Keith's Theater in Flushing into condominiums in July, he may now have run into some trouble far above the ground,. This week, the Federal Aviation Administration said it had never approved the building and that its 17-floor height might interfere with the safety of flights to and from nearby LaGuardia airport. An FAA spokesperson said that agency had received an application regarding the project and has asked for additional information before doing a study.
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