In the paralyzed commercial real estate market, where panicked brokers wring their hands as deals founder, a number of nimble New York pros are looking to claim their share of the emerging submarket that surrounds distressed property assets.

It’s not a new business, mind you. It’s more like an old one that reemerges when there’s a financial crisis, when landlords can’t pay creditors, when real estate firms go bankrupt, when a strong firm buys a weak one. Real estate investors in trouble need advice, after all, just like the rest of us.

“Did I think this would happen again? Yeah,” said Anthony McElroy, a managing director at Colliers ABR who’s heading its New York distressed-asset team, formed in September, and who worked with distressed assets in the ’90s, back in the days of the Resolution Trust Corporation, birthed by the savings-and-loan crisis.  read more »

Things aren’t looking all that promising for General Growth Properties’ two Manhattan mega-projects, and not just because the company is foundering so badly that it was last week delisted from the Standard & Poor’s 500.

Though let’s not kid ourselves: A corporation in such dire straights that its stock has been deemed nearly worthless doesn’t seem in the best position to move forward with either a 1.7 million-square-foot mixed-used complex on East 125th Street, or a brand-new tower and retail complex at the South Street Seaport.

But there are, believe it or not, other reasons to be concerned.  read more »

Wait for it. All the stomach-churning news notwithstanding, that much-anticipated deluge of sublease space has yet to descend on the Manhattan market, according to new numbers from Jones Lang LaSalle wonk-in-chief James Delmonte.

Rather, much as the commercial real estate industry waits, and waits, and waits for the market to hit this so-called bottom, sublease space and the vacancy rate continue to creep upward only ever so slowly. Or “incrementally,” as Mr. Delmonte, JLL’s vice president and research director, would have it.

In October, sublease space in midtown Class A properties amounted to 4.4 million square feet, just 28.2 percent of all available Class A space.  read more »

Pryor, Cashman, a mid-size entertainment law firm resplendent with B-list clients, has announced it will take 100,000 square feet at Times Square Tower, the Boston Properties building on 42nd Street between Broadway and Seventh Avenue. It will relocate from Eastgate Realty's 410 Park Avenue, which has housed the firm since 1971.

The firm, whose clientele includes, among others, a number of American Idol contestants, and Bob Guccione Sr., the founder of Penthouse, signed a 15-year lease for the 39th, 40th, and 41st floors of the 48-story tower, beginning in mid-2009.  read more »

Camper, the Majorca-based shoe retailer, has purchased an appropriately stylish little one-story building at the corner of Prince and Greene streets for $16 million.

Camper closed the deal on Nov. 13, according to city records, buying the building from Charles Rosenblum.

Heather Ryan, Camper's U.S. retail manager, told The Observer that for the time being, Camper intends on acting merely as a landlord. Right now, the one-story building is home to two tenants -- including Face -- both of which have long-term leases.  read more »

Comcast has signed a mega-lease for nearly 100,000 square feet in the Ernst & Young building at 5 Times Square, according to sources familiar with the transaction.

The cable company will relocate in May 2009 to the ninth, 10th and 11th floors of the 1.1-million-square-foot tower, owned by the Yonkers-based AVR Realty, from Brookfield Properties' Grace Building at 1114 Avenue of the Americas.

This is just the latest bad news for Brookfield, which has 4.2 million square feet at its World Financial Center leased out to Merrill Lynch. Bank of America, which recently bought out Merrill, has just moved into fabulous new headquarters at One Bryant Park, and the fate of Merrill's space downtown remains murky.  read more »

Stylish and poorly financed Brooklynites, rejoice! Swedish retailer H&M has officially signed a 15-year lease at Al Laboz’s 497 Fulton Street, in the Fulton Mall.

The sizable, 29,600-square-foot store, between Hoyt and Bridge streets, will be H&M’s first street location in the outer borough, and Brooklyn’s second location (the other is in the Kings Plaza mall). “H&M’s commitment is a testament to Downtown Brooklyn’s resurgence,” Mr. Laboz, who’s also chairman of the Fulton Street Mall Improvement Association, said in a statement.

Cushman & Wakefield’s Robert Gibson, Thomas Citron and Molly Beal represented H&M in the transaction.

Sadly, thanks to a planned reconstruction of the building, H&M won’t open its doors until the end of 2010.

drubinstein@observer.com  read more »

Go south, young broker! Washington, D.C., is, believe it or not, the new New York City.

“It’s kind of the tale of two cities with New York City and D.C., to use a tired term,” said Robert Sammons, the managing director for research at Colliers ABR, during its Tuesday morning Capital Markets Overview on the 11th floor of 40 East 52nd Street.

Or rather, it’s the tale of two brothers. New York is the hard-partying, high-flying younger brother who pulls in reams of money in good times and comes begging for loans in bad. D.C. is the dull, staid, sensible older brother who, in good times and bad, just keeps plugging along.  read more »

In an apparent effort to raise cash, the struggling iStar Financial has put its $224 million Drake Hotel site mortgage on the block, according to a knowledgeable source.

“They’re a mortgage REIT and they need cash,” said the source. “The development is not going anywhere today. It’s in default. It’s not paying interest currently.”

The development site in question is the plot bounded by 56th and 57th streets and Park Avenue, once home to the Drake Hotel. Macklowe Properties has long had plans to erect some sort of tower there—reports bounce back and forth between residential and office tower plans. Either way, the project looks increasingly unlikely to materialize.  read more »

Odd timing. That’s what New York investment brokers are saying about Halstead Property’s recently announced plans to open a commercial real estate investment arm during one of the worst markets in recent history.

“I don’t think it’s a great idea,” said an investment broker from a rival and well-established firm, which, though it has a good name and strong client relationships, has seen activity plummet. “We will crush them.”

Others were similarly dubious, though more diplomatic.

“If you’re selling in the $500,000 to $5 million range, if you’re doing very localized markets, like Main Street in Flushing and certain areas in Brooklyn, great,” said another broker.  read more »