Dana Rubinstein

Is James Nelson a Pollyanna?

Mr. Nelson, a partner and managing director at Massey Knakal, believes too much is being made of the tribulations in the city’s sexy, trophy-tower, over-$100 million investment sales market. And too little is being made of the relatively healthy, yet decidedly less glam, more modestly priced market in which his firm specializes.

“As far as the percentage of properties that sell under $100 million is concerned, there are so many more sales,” he said. An obvious, yet oft-overlooked, point.

“Clearly everyone’s been following the Macklowe properties,” Mr. Nelson said, referring to recent trophy-tower transactions that included the record sale of the GM Building.  read more »

The Carlyle Group closed Tuesday on the purchase of an interest in the retail condo at 666 Fifth Avenue, the tower that Kushner Companies bought last year for a then-record $1.8 billion, according to a source familiar with the deal.

The Carlyle Group—the mammoth private-equity group that manages $82.7 billion in 60 funds worldwide and recently, with Ashkenazy Acquisition Corp., bought 650 Madison Avenue for $680 million—is buying in partnership with Stanley Chera’s Crown Acquisitions. The 49 percent stake, as reported by Bloomberg News, in the approximately 90,000-square-foot retail portion, which includes a Brooks Brothers and the NBA Store, is valued in the deal at $525 million.  read more »

Under the new leadership of the dashing Billy Macklowe, Macklowe Properties appears to be lumbering ahead with its complicated and complication-ridden Drake Hotel development.

Either that, or Macklowe Properties is busy assembling a more lucrative parcel in the East 50s around Park Avenue to put on the market—Macklowe was reportedly considering selling the mega-site in May, before successfully selling the GM Building to Mort Zuckerman’s Boston Properties for a record-breaking $2.8 billion.

Either way, Audemars Piguet, the sole tenant in 40 East 57th Street, is out. Capping 14 months of negotiations, Macklowe has bought out the remaining 10 years on the Swiss watchmaker’s lease.  read more »

The commercial real estate market must really be wretched. How else to explain Cushman & Wakefield’s midyear breakfast on Tuesday morning when, in Michael’s glassed-in patio, a couple of ballsy brokers erupted with skepticism, calling into question their bosses’ own stats—to those bosses’ faces. In front of the press.

“If I were sitting in the media looking at the stats, I’d think that someone was drinking the Kool-Aid,” said Joshua Kuriloff, a broker at the firm.

Mr. Kuriloff even uttered the R-word (“recession”) to describe the economy—a term that’s verboten among most real estate types, who favor limper nouns like “contraction,” “slowdown” and “downturn.  read more »

Syms is an eerily quiet department store housed in an ugly white building that crouches low on Trinity Place. Most of its windows are bricked up. Its outlandishly nice staff, “educators” in Syms parlance, tend to row after row of neatly hung blazers and pantsuits.

Now and again, in the otherwise silent shop, the disembodied voice of a man calling himself Richard Syms makes an announcement about gift cards. It’s unclear to whom the announcement is directed. The store, at 5 on a Saturday afternoon, is nearly deserted.

Syms, the off-market chain known for its black paper bags proclaiming “An educated consumer is our best customer,” purports to be a retailer.  read more »

The Carlyle Group closed today on the purchase of an interest in the retail condo at 666 Fifth Avenue, the tower that Kushner Companies bought last year for a then-record $1.8 billion, according to a source familiar with the deal.

Carlyle Group -– the mammoth private equity group that manages $82.7 billion in 60 funds worldwide and recently, with Ashkenazy Acquisition Corp., bought 650 Madison Avenue for $680 million -- is purchasing this deal in partnership with Stanley Chera's Crown Acquisitions. The 49 percent stake, as reported by Bloomberg News, in the approximately 90,000-square-foot retail portion, which includes a Brooks Brothers and the NBA Store, is valued in the deal at $525 million.  read more »

Ronald Winston, son of the founder of the eponymous Harry Winston jewelers, has sold the firm's flagship building at 718 Fifth Avenue for $62 million, according to city records.

Paramount Group, which made the purchase, is apparently on a shopping spree that would make even Harry proud. Albert Behler's Paramount is apparently snapping up 1301 Avenue of the Americas, the Credit Lyonnais Building, for a staggering $1.5 billion.

Neither Paramount Group's spokeswoman nor the spokesperson for Harry Winston could be reached for comment.

Master mall builder Forest City Ratner and Blumenfeld Development Group have snagged another discount retailer for East River Plaza, the 485,000-square-foot suburban-style mall being developed in East Harlem along the FDR Drive, between 116th and 119th streets.

Marshalls, the discount housewares and clothing store, has committed to taking 33,000 square feet in the mall, according to a press release issued today. It will be the first Marshalls in East Harlem.

A recent article in The New York Times said the mall is slated to open in October 2009.

Some highlights of the $480 million project include an estimated 2,000 jobs (that is, of course, the developer's estimate); a multi-level 1,248-space parking lot; a Target; a Best Buy; and possibly a Home Depot.  read more »

It was Friday afternoon, and William Kelley didn't look dressed for getting down and dirty.

The guy was, frankly, styling, in his blue Ralph Lauren polo, plaid pants and black-framed glasses. The only clue that he’d be spending the next two hours on hands and knees, measuring tree pits and jotting down every dangerous crack, hole, puddle, and spot of graffiti along Union Square East was the enormous metal tape-measure strapped weapon-like to his belt.

Mr. Kelley, director of economic development for the Union Square BID, and his partner Victoria Draper, a Howard University-bound graduate of Washington Irving High School, began their two-hour survey at Galaxy Global Eatery – the vegetarian-friendly diner at the corner of 15th Street and Irving Place that has glow-in-the-dark stars on the ceiling and hawks galaxy-emblazoned rolling paper at the front desk.  read more »

Developers broke ground on the silver-skinned, 65-story tower planned for 50 West Street in Lower Manhattan.

On June 23, New York-based developer Time Equities Inc. marked the occasion with, appropriately enough, an organic breakfast from the local bakery Financier.

Not only was the breakfast-cum-groundbreaking religiously eco-friendly, but it was also religious.

According to the release, "Vicar Anne Mallonee, The Reverand Mark Bozzuti-Jones and Rabbi Schmaya Katz blessed the site and spoke of hospitality, unity and sustainability as they welcomed their new neighbor."

It's all in keeping with the firm's meticulous political correctness. The developers are anticipating that the residential and hotel building will get LEED-gold certification thanks to the incorporation of technologies like a green roof, water-efficient plumbing, automated blinds, and sustainable construction materials.  read more »

Manhattan property investors are in a funk. Their friends at the investment banks have empty pockets or fresh pink slips. Financing for large deals is scarce. And industry heavyweights are for once publicly bearish.

Peter DeCheser, managing director of capital markets for Jones Lang LaSalle, said using the word “somber” to describe the mood “might be euphemistic.”

“We’re in for a slowdown in volume that would almost be comparable to the early ’90s,” Mr. DeCheser said. “It will become much worse. In the next 30 to 60 days, the proverbial second shoe will drop.”

Normally, getting a real estate type to say something negative about the Manhattan investment-sales market is like eliciting an intelligent comment from Kelly Ripa: damn near impossible.  read more »

Location: How’s the capital market doing?

Mr. Herzka: If you’re talking about the Wall Street type of funding, that’s pretty much nonexistent.

Where’s the financing coming from?

From a lot of the commercial banks, large savings banks, life insurance companies, a consortium of banks funding larger deals, and of course the agencies Freddie Mac and Fannie Mae.

And what kind of financing do you do?

Meridian actually specializes in all income-producing properties, whether it’s multi-family, retail, industrial or office. You’re sitting here with David Rosenberg, who heads up the capital markets group. And Ronnie Levine, who heads up the structured [financing] and construction group.  read more »

Here she is -- the scaled-down, more contextually appropriate design for the New Domino residential development, which got the official stamp of approval from the Landmarks Preservation Commission this morning.

Unlike the former, more controversial plan, this one preserves the iconic Domino Sugar sign, better hides the mechanicals, and adds fewer floors on top of the landmarked old factory.

The New Domino is a mixed-use development, slated to have 2,200 residential units, 30 percent of which are supposed to be affordable, along with approximately 220,000 square feet of new retail, commercial and community cultural facility space.

But Michael Lappin, the CEO of CPC Resources, which is developing the project with the Katan group, warned that the 20,000-square-foot reduction in size may endanger some of those affordable units:

“The new design incorporates many of the suggestions of Landmarks commissioners, and we believe it reflects the highest quality of thoughtful, creative restoration as interpreted by our preservation architects, Beyer Blinder Belle," Mr.  read more »

Jack Guttman this week cemented his place atop what is perhaps New York City’s largest fine-arts storage and moving company with the purchase of two loft buildings on West 55th Street for $45 million.

Mr. Guttman, who made clear he’s unrelated to the Brooklyn Guttmans (think suspicious fires), has been in the self-storage business for 15 years as head of American Self Storage. He made his first foray into the arts in 2006 with his Chelsea Arts Tower commercial condominiums. But it was just this January that he moved into the immensely sensitive realm of high-art moving and storage when he purchased Hayes Storage (both the business and the building at 305 East 61st Street) for about $30 million.  read more »

Is the $200-a-square-foot office space in trophy towers the new $12 dollar movie ticket—a galling, nerve-grating development that a mere 12 months later becomes the widely accepted paradigm?

At 9 West 57th Street—the stylish Sheldon Solow tower on Fifth Avenue—three firms have recently signed leases at more than $200 a foot, according to a source familiar with the transactions. The source insisted this was “not a story. You’ll start to see that number at the GM Building.”

In a way, that source is right. Rumors of prices like this surface now and again.

And it’s not as though we’re talking Class B space here.  read more »

How do we know we’re living in a second Gilded Age? Even as the economy tanks and a record number of small businesses declare bankruptcy, asking rents in the city’s trophy towers continue to float higher and higher into the stratosphere, untethered by such petty concerns as price, according to Jones Lang LaSalle’s until now unreleased 2008 Skyline Review.

In these so-called trophy buildings—midtown towers like One Bryant Park and the GM Building—average asking rents increased 3 percent from the fall of 2007, reaching $122.93 a square foot.

In the past year, asking rents in these upper-crust towers have increased 18 percent from $104.  read more »

It's a trend! Pfizer wants to sublease 750,000 square feet of office space, according to a report today in Crain's New York Business, joining a growing set of firms seeking to shed excess space in the slumping economy:

"The Royal Bank of Scotland is marketing about 140,000 square feet at 7 World Trade Center that it inherited when it bought ABN Amro. J.P. Morgan Chase & Co.’s purchase of Bear Stearns Cos. is also expected to put hundreds of thousands of square feet on the market. In addition, sources say Lehman Brothers is also trying to unload 400,000 square feet of space.

"Meanwhile, Goldman Sachs is preparing to sublease about 500,000 square feet at 77 Water St.  read more »

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Location: Have you been better protected from this credit crunch because you sell buildings in the below-$100 million market?

Mr. Knakal: Clearly, the market for buildings over $100 million is much slower than the market for buildings under $100 million, mainly because of the availability of credit. … To the extent you’re looking for a nine-figure loan on an acquisition, that’s very challenging to find, mainly because most of those loans were provided by [commercial-mortgage-backed securities] lenders that are no longer active.

How have your sales been affected?

Our number of transactions is off by about 21 percent compared to 2007.  read more »

Federal bankruptcy filings are up 322 percent citywide compared to the same period last year, according to a report in Crain's New York, not the most promising of trends amid this year's economic turmoil.

According to the article, there were 335 bankruptcy filings in New York City, in comparison to 104 in the same period last year.  read more »

In the wake of his father Harry's near disastrous over-leveraging of the family business, Billy Macklowe has officially been named Macklowe Properties' new chairman and CEO. He has been working with his father since 1992, after a stint as a real estate finance analyst for Manufactures Hanover.

His father Harry has been named Chairman Emeritus of the firm.

The father and son were said to have a fractious relationship, which, according to a recent Wall Street Journal article, was made worse by Macklowe Properties' credit crisis woes. The tension between the two is said to have helped precipitate this change in the ranks.  read more »

The GM Building, the tower that Mort Zuckerman's Boston Properties this week closed on for a record-breaking $2.8 billion, may no longer be known as the GM Building.

Just minutes ago, in a Boston Properties investors conference call to discuss the acquisition, president Douglas Linde said the GM Building's name may officially change, since General Motors -- which moved its headquarters there 40 years ago --is moving its remaining three floors, more than 100,000 square feet, from the marble tower to the Citigroup Center, another Boston Properties tower, also in Midtown.  read more »

NBC visited 7 World Trade Center on June 2, the most recent of more than one visit to Larry Silverstein’s gleaming downtown tower, whose top 10 floors are still available for lease. Sources say NBC was considering housing its new business operations center there.

“NBC has been back to 7 World Trade Center a number of times, with executives and different division heads poring over the building,” said a real estate insider, who, on a recent visit to the building, saw NBC representatives looking like “cats who swallowed the canary.”

Those “executives” included Jeff Zucker, the president and CEO of NBC Universal, according to another source.

A Silverstein spokesman said he would “not comment on nor confirm discussions with potential tenants.” But another broker familiar with NBC’s plans said the media giant has since moved on from 7 World Trade, and is now looking at SJP Properties’ under-construction 11 Times Square and properties along Eighth Avenue.  read more »

Insurance giant AIG has assumed the remainder of Goldman Sachs’ lease at 180 Maiden Lane, which, at 800,000 square feet, is the largest lease transaction so far in 2008.

“We will consolidate several AIG offices in Manhattan to 180 Maiden Lane,” said a source familiar with the deal.  read more »

Domestic players have bought three huge midtown towers once belonging to the beleaguered Macklowe Properties.

Shorenstein Properties has bought Park Avenue Tower and 850 Third Avenue for just shy of $1 billion.  read more »

West 57th Street is to its easterly counterpart what a deer-hunting, RV-driving homeowner is to his McMansion-owning neighbor—an embarrassment.  read more »

“I got great sleep last night,” Mort Zuckerman said on Tuesday afternoon, the day after he and his partners closed on the most expensive single-building purchase ever. Nine hours of sleep, no less.

As chairman of Boston Properties, Mr.  read more »

Valter Mainetti's Sorgente Group has bought a majority stake in the Flatiron Building, according to Time.com.

"Though not quite the shock of the Mitsubishi Group's purchase of Rockefeller Center, the Flatiron's falling into foreign hands nevertheless carries symbolic weight as international investors take advantage of the upheaval in the real estate market and weakness of the U.S. dollar. The euro closed Monday at $1.56."

 read more »

AIG has just assumed the remainder of Goldman Sachs' lease at 180 Maiden Lane. At 800,000 square feet, it's the largest lease transaction so far this year.

"We will consolidate several AIG offices in Manhattan to 180 Maiden Lane," said a source familiar with the deal. "70 Pine will remain our corporate headquarters."

The move will be executed in phases, beginning this September, with AIG fully occupying the 30 floors by 2011.

Early on Tuesday afternoon, Mort Zuckerman told a REBNY luncheon that he and his partners were closing on the approximately $2.8 billion purchase of the GM Building "as we speak."

At 4:38 p.m., a deed hit city records marking a $690 million transaction between Mr. Zuckerman's group and Macklowe Properties, the former owner of the GM Building, for the office tower at 761 Fifth Avenue (an address for the GM Building).  read more »

Mort Zuckerman, the jack of New York trades who, as chairman of Boston Properties, is today closing on the purchase of the GM Building, gave yet another rendition of his gloomy-as-hell take on the U.S. economy to a crowd of brokers at a Real Estate Board of New York luncheon at the Sheraton on Seventh Avenue.

But it wasn't without a sizeable dose of humor, and not without touching on subjects as varied as President Bush’s fiscal policy, the brilliance of TV gab pioneer John McLaughlin, and how practicing law is like lousy sex.

First, the medicinal:  read more »

The GM Building sale is "closing as we speak." That's according to Mort Zuckerman, who is addressing a Real Estate Board of New York luncheon this afternoon.

Mr. Zuckerman's Boston Properties, along with partners including Goldman Sachs, negotiated the purchase of the Macklowe Properties building late last month in a deal that valued it at around $2.8 billion. It's the most expensive building sale ever.

A group called Fintal Holding S.A. has sold 690 Madison Avenue -- the home of the larger of Madison's two Luca Luca stores -- to an entity called Omandis N.V. for an even $50 million.

A spokeswoman for Luca Orlandi, of the eponymous Luca Luca, yesterday confirmed the designer was selling the building and looking to relocate the store to Fifth Avenue.

The city's Department of Investigation and the New York District Attorney's office just announced the arrest of a high-ranking crane inspector for bribery and tampering with public records.

Defendant James Delayo, the acting chief inspector for cranes and derricks and a 26-year Buildings Department veteran, has been arrested for taking bribes in exchange for helping recertify cranes without the proper inspections; for certifying individuals as crane operators without their having taken the appropriate exames; and for, "giving a copy of the crane operator’s examination to a crane company operator in exchange for $3,000."

All of these bribes supplemented his annual salary of $74,000.

Mr. Delayo, a 60-year-old Bronx resident, will be arraigned this evening.  read more »

Extell Development, which is planning a 40-story tower in the Diamond District, has just acquired a 55,000-square-foot building on the same block for $50 million, according to city documents posted today.  read more »

Investors, their pockets bulging with foreign capital, will set down in Manhattan this September to eye local real estate investment opportunities, rub shoulders, and draw American investment overseas.

Cityscape -- the firm that put on a popular Dubai convention last year -- will host the the Cityscape USA exhibition on Sept. 10 and 11 at the Jacob Javits Center.  read more »

Mort Zuckerman doesn't screw around.

His Boston Properties could close as early as next week on its $2.8 billion purchase of the GM Building, according to Reuters.

Just as intriguing, Reuters is reporting that Boston Properties is considering buying out the remainder of FAO Schwarz's lease on the ground floor, and the leases of other below-market tenants:  read more »

By all accounts, Eliot Spitzer never imagined that Spitzer Enterprises would be his life’s work. His father Bernie’s real estate empire, the one he built from scratch, would finance Eliot’s ambitions. Not circumscribe them.

But that was then. This is now. And apparently, the deposed governor is adjusting.  read more »

Tenants beware!  read more »

Albert Behler’s Paramount Group is one of the last behemoths standing in the competition to pay $1.5 billion for 1301 Avenue of the Americas, the Credit Lyonnais building that Harry Macklowe surrendered to Deutsche Bank earlier this year.  read more »

Doom-and-gloom credit crisis notwithstanding, developers requested city approval to build substantially more new buildings in the first four months of this year than in the same period last year, according to Department of Buildings statistics.

We know. It’s a little startling, given the Bear Stearns bailout, rising construction costs and the difficulty in getting credit.

Yet during the first four months of 2008, there were 98 applications for new Manhattan building permits, a 46 percent increase over the same period in 2007, when there were 67.  read more »

Mark Lanier, the 47-year-old attorney who litigated his way to CNBC fame by taking on Merck’s dreaded Vioxx, and who’s now representing sugar-cane farmers in their suit against Splenda, is doubling the size of his footprint in Harry Macklowe’s Tower 56.

Mr.  read more »

New York State’s highest court today ruled against developer Sheldon Solow in a case that should have repercussions for fire-insurance holders nationwide.

In a unanimous decision, the New York State Court of Appeals ruled that when a lease requires a tenant to purchase fire insurance, that insurance cannot specifically exclude damages caused by terrorism.

The case, TAG 380, LLC v ComMet 380, Inc., involved none other than legendarily litigious New York developer Sheldon Solow, a tenant of ComMet, the fee-owner of 380 Madison Avenue.

Following September 11, when terrorism insurance prices shot through the roof, Mr. Solow’s insurance policy was coming up for renewal. ComMet asked that Mr. Solow purchase insurance that included damages caused by terrorism, even if though Mr. Solow's lease did not explicity mention the word "terrorism."

Mr. Solow instead purchased fire insurance that explicity excluded terrorism coverage. He argued that the fire insurance language in the lease could not be construed to encompass terrorism damages.

Today, the Court of Appeals refuted Mr. Solow's argument.  read more »

“We're like refugees," said Chris Ryan, 28, one of an estimated few hundred residents forced to evacuate seven Upper East Side buildings this morning following the collapse of a crane that killed at least two people.

Mr. Ryan, temporarily wallet-less, lives at 1748 First Avenue, between 90th and 91st streets. But this afternoon he was inside Richard R. Greene High School, on 88th Street, where officials had set up a First Aid center.

The Observer fanned out this morning and afternoon to interview people directly impacted by the collapse. The overwhelming emotion? Anger.  read more »

Lost in the dust-cloud hovering above today's Upper East Side crane collapse was yesterday's protest on the steps of City Hall, during which preservationists asked the city to restore $300,000 in funding to the Landmarks Preservation Commission.

That commission is responsible for designating, and thereby protecting from alteration, city landmarks and landmarked districts.

“During the last two years, increased funding has enabled the LPC to hire more employees, and as a result, the commission designated 26 landmarks and four historic districts,” said Lisa Kersavage, director of advocacy for the Municipal Art Society, in a statement.

The jobs of five such employees are now at risk, thanks to proposed funding cutbacks, according to the Society.  read more »

Governor Paterson and Mayor Bloomberg spoke at a hastily organized press conference scheduled for 11:15 a.m. at the site of this morning's crane collapse on the Upper East Side.

This morning, a crane at the site of the Azure condop development at First Avenue and 91st Street tumbled onto the building across the street, damaging it from the 20th floor to the Duane Reade on the ground floor, and killing at least one person (if not two, depending on reports).  read more »

Incredible. Another crane has collapsed in Manhattan, according to media reports, killing at least one person and wreaking yet more havoc on the East Side.

"The crane, which was apparently being used for a construction project at 354 East 91st Street, on the northwest corner of the intersection, collapsed onto the north facade of the white-brick building at the southwest corner of 91st Street and First Avenue. The damage extends from the building’s top floor, about 20 stories up, to the second floor, just above a Duane Reade drug store."

The second crane collapse this year comes just days after the city announced it would no longer require Buildings Department inspectors to be on site during crane jumps, instead relying on a system of surprise inspections.

On March 15, a 22-story crane collapsed on East 51st Street, killing seven people and leading to the resignation of Buildings Commissioner Patricia Lancaster.

Update 9:57 a.m.

This building, a condop development called the Azure, has received 17 complaints this year, seven of which pertained to the crane, according to the Department of Buildings Web site.  read more »