The Week in Real Estate: 8.21.09

Two years ago, Broadway Partners was an empire on the march.

They owned some of the country’s best Class A office properties—the 62-story Aon Center in Los Angeles, One City Centre in Houston, 522 Fifth Avenue in New York—but they were always searching for more. Led by founder and CEO Scott Lawlor, the faster their real estate empire grew, the faster Broadway scrambled to conquer even more office buildings from California to New York.

Their Macklowe-like strategy: to rake in office properties on highly leveraged loans, wait for rents to rise, and sell the buildings at a profit within two years.

But the market’s crash has left the new kid on the block more bruised than his older rivals. Indeed, the nine-year-old company acquired its taste for risk at precisely the wrong time. They bought 28 office properties around the country in 2006 and 2007, at prices that critics argued were too high even then, in contrast to only nine office properties bought from 2001 through 2003. More here.

The only thing more staggering than last summer’s $48,836,000 penthouse sale at 1060 Fifth Avenue is just how monstrously different New York has become only one year later. On July 29, 2008, an anonymous trust bought the two-level, 17-room co-op from Scott and Donya Bommer, who had paid a record $46 million for the place that very January.

The July sale was the go-go era’s great last gasp: Those olden days of record-smashing feel so far gone that talking about the penthouse’s glorious floor plan is like reminiscing around a campfire. Even the language on the old plan—courtesy of Brown Harris Stevens, the firm that represented the writer Georgia Shreve, who sold the co-op to the Bommers—sounds antediluvian. Witness the semi-private landing; the master suite’s three wardrobe closets; the green house; the 114.5-foot-long south-facing terrace; and that air conditioner handler! More here.

Studios are a place to store a person, self-storage in the most literal sense. That might not always be the most appealing real estate option, but today’s falling prices have many renters contemplating inexpensive small spaces. This week, Your Open House explores Manhattan studios: Who’s buying small and why?

Today an East Village co-op, 226 East 12th Street was built as housing for nursing students in 1927. True to its roots, it retains an eccentric dormitory feeling: The lobby has elaborate moldings gone slightly grubby, a sign instructing residents to remove their rollerblades, and a fish tank in the fireplace; the building has both tenants and owners. More here.

“It’s gluttonous, but it’s charming,” the broker Stephen McRae said on the Sunday morning of Aug. 9, strolling around in the cavernous master bathroom of Julianne Moore’s West 11th Street townhouse, where the massive marble tub in the middle of the room looks just like the marble fireplace on the bathroom’s west wall, next to the bidet.

“I’m thinking this has a practicality. And a glamour,” said his colleague Debbie Korb, who was downstairs in the two-room, two-fireplace parlor.

Most brokers fling around good adjectives loosely, but the Sotheby’s agents were right. During a weekend tour, when the duo allowed an Observer writer and photographer inside, the 21-foot-wide place seemed so snug and intelligent and plush but unpretentious that it was hard to mind that in 2003 Ms. Moore spent only $3.5 million on the townhouse, which went on the market last week for $11,995,000. More here.

All photos by Shravan Vidyarthi.

Advertisement

Remember that plot on 34th Street where Apple was all set to build one of its marvelous stores—that is, until CEO Steve Jobs famously (and outrageously) visited the site in person and declared the block between Fifth and Sixth avenues unworthy of his corporate presence?

Well, now Esprit is in talks with Apple to take over its lease at 21-25 West 34th Street, according to a source familiar with the ongoing negotiations. More here.

The year legendary attorney Peter James Johnson first opened his law office at 120 Wall Street, Hugh Hefner published the first issue of Playboy, with Marilyn Monroe in the centerfold; the government executed Ethel and Julius Rosenberg for espionage; and Ian Fleming’s first James Bond novel, Casino Royale, was released.

It was 1953.

This July 2009, litigation firm Leahy & Johnson P.C. renewed its 9,520-square-foot lease at the 40-story tower, owned by Silverstein Properties, for another 10 years. Which means that, come the lease’s expiration in 2019, the firm will have been at the same location for 66 years. More here.

PropertyShark.

Punching-bag Goldman Sachs has chalked up yet another reason to be evil-eyed: It is America’s (and New York City’s) No. 1 source of office sublease space.

That means that should the average, small-time businesswoman with nary a bailout to her name, yet all the same confronted with declining revenue and enough vacant office space to host a U2 concert, decide to put that space on the market, she’s bound to face some very stiff competition for subtenants from the bank that hatched Hank Paulson and Robert Rubin (and Matt Taibbi’s enraged takedown in the most recent Rolling Stone).

Goldman Sachs has 597,000 square feet available at 77 Water Street, according to a recent report by brokerage Jones Lang LaSalle detailing sublease space added to the market since the credit crisis hit in 2007. To be fair, the bank’s reasons seem pretty non-nefarious: Goldman Sachs is busy preparing to consolidate its operations by the end of this year to its glorious new 2.1 million–square–foot, 43-story, $2.4 billion headquarters at 200 West Street, designed by Henry Cobb. More here.

Advertisement

Facebook has traded its digs at 551 Fifth for a larger space at 340 Madison Avenue. The new office is 11,119 square feet, can hold about 60 employees and is on the sixth floor of a very glassy building owned by Broadway Partners. Newmark Knight Frank’s Daniel Katcher, who along with the Ippolito brothers (Paul and Mike) represented the sublandlord Sungard in negotiations for the three-year lease, described the space as “a nice mix between corporate, tech and loft offices.” The Facebook sales team will inhabit the offices, and were repped by Grubb & EllisLarry Zuckerman. More here.

PropertyShark.

Safety Dance. Two categories of neighborhood advertise their safety on Craigslist: there’s Upper East Side safe, and then there’s East Williamsburg safe. One means “Safe, duh—unless you’re scared of rich old people.” The other means “Seriously, I’ve pretty much never been mugged.” One is redundant; the other doth protest too much.

But perhaps it’s better to be vigilant—after all, on Wednesday a sharp-eyed Curbed reader Google mapping a Bed-Stuy apartment from Craigslist stumbled upon a crime scene.

Going Back to Cali. A perennial source of Craigslist tomfoolery is the infinite stretchiness of neighborhood boundaries. Sure, maybe we’ll accept places above 96th street as the Upper (Upper) East or West Side. But sometimes, Craigslist, you exhaust our generosity. The “mid-170s” are not the “Upper West Side.” And it’s not the “Upper East Side” if it has a two-car garage and “large fenced yard.” In fact, we’re not sure where in Manhattan you’d find the fence and garage, but the accompanying photo looks an awful lot like suburban California. (It's also not the Upper East Side if it's 118th Street; that maybe works on the West Side.) More here.

It’s become a cliché now: for the past few years, the Finger Building has been getting the finger from Williamsburg residents, the guy who sued (Scott Spector), HSBC, and even from its new owners, who have changed its name to the Albero (“the Tree” in Italian).

Though construction had stalled and the building had even entered foreclosure, the Finger (as it is still known in Williamsburg) at 144 North Eighth Street is finally under construction again and may actually get finished.

After years of heated debate in the courts and the streets about how high this aesthetically challenged building should rise, it’s been resolved: the Scarano-designed Albero will be 14 stories high, according to the project’s construction manager Mike Schon, and it will be finished in 10 months. More here.

Advertisement

Susan Bloomberg, the mayor's ex-wife, turns out to have a very hip apartment. A One Kenmare Square penthouse filled with punchy reds, yellows and purples (plus what may or not be some crushed velvet furniture) was just listed for $11.5 million. According to city records, Ms. Bloomberg spent $10 million on the place three years ago.

The apartment's floor plan (see it here) is a thing of beauty: The two-unit, 4,472-square-foot sprawl has four bedrooms, four bathrooms, two powder rooms and two fireplaces--but there are two private terraces and a private rooftop that add another 4,031 square feet. More here.

Brown Harris Stevens.

In January 2006, Amy and Lyor Cohen--a king of the mainstream hip-hop industry who's worked with Public Enemy, Run DMC, the Beastie Boys and Jay-Z (but also Elvis Costello and, sadly, Nickelback)--paid $7.75 million for a duplex co-op at 8 East 96th Street. Two months later, the Post reported that the couple was divorcing, but amicably: "We absolutely love each other," they said. It might have been a good idea to sell the apartment right away.

But the couple waited until the New York real estate market collapsed violently, selling only late last month for $6 million, a $1.75 million loss. Their buyers, according to a deed filed Wednesday in city records, are Maria Vasconcelos and Julio Pekarovic, a Google executive whose title is Vice President of Global Sales, Finance. Mr. Pekarovic is responsible for managing Google's "revenue forecasting, expense budgeting, partner deal modeling, Sarbanes-Oxley compliance, sales team quota-setting, as well as sales operational analysis and reporting for senior management." More here.

Getty.

The Apthorp, one of the Upper West Side’s most iconic and colossal buildings, is three weeks and six days from the biggest moment of its 103-year-old life. If 25 apartments haven’t been sold by Sept. 15, the building’s long, zigzagging, tortured condo conversion will have to end and start anew, according to state rules.

On the one hand, the Apthorp’s chances are looking tantalizingly good. According to a source at co-owner Africa Israel, a building notice will go up on Wednesday, Aug. 19, announcing that either 22 or 23 units are in contract. That figure is astonishing, considering that the most recent public tally had been 11. “We’re very close,” the source said.

On the other, the state of affairs there is typically melodramatic, fraught and tangled: Weird subplots of the Apthorp soap opera continue to unfurl, and the feud between rival owners rages on. More here.

Advertisement

The multi-family sector of the real estate market is often described as the healthiest of the commercial bunch.

Insomuch as there is, in fact, the occasional transaction, that description holds water. Especially when compared to the office-building market, which, as CB Richard Ellis recently reported, saw a measly three transactions of greater than $30 million in the first half of 2009.

But comparatively healthy is in no way synonymous with healthy, as a recent report by Marcus & Millichap’s Peter Von Der Ahe, a vice president for investment sales, makes abundantly clear.

Per usual, the report focuses on buildings with at least four apartments and that are valued at less than $100 million (though in this market, under $50 million is more accurate). Anyway, the overall finding: sales are down. Way down. More here.

2 East Second Street, a five-unit building that sold this year for $1.7 million, or about $259 a square foot. Via PropertyShark.

It’s almost like those long-gone, beautifully bubbly days of ’07, back when lush apartments traded from one blue blood to another—or between TV stars, or Russians, or slightly crooked financiers—like baseball cards.

Barely five blocks away from the $1.5 million apartment that Mad Men director Alan Taylor just sold to Saturday Night Live’s Kristin Wiig, one heiress has sold another her oak-beamed, American walnut–floored loft on Lafayette Street.

According to a deed filed this week, Jets owner and pharmaceuticals heir Woody Johnson IV’s daughter, Jaime, paid $2,654,391.67 for an apartment owned by Lucy Waletzky. She’s the late conservationist Laurence Rockefeller’s daughter, which makes her Standard Oil founder John D. Rockefeller’s great-granddaughter. More here.

Laurence Rockefeller via Getty.

It was Friday night on the revolving 48th floor of the Marriott Marquis, and an elevator had just vomited a handful of tourists onto the solid core of the restaurant there—a minor miracle given how difficult it is for even the directionally adept to navigate the hotel’s devious elevator system.

From the center, one could watch parents with litters of children on red leathery chairs chomping on buffet food as the floor beneath them slowly drifted clockwise, a revolving ring of tackiness carried along a river whose view was surprisingly beautiful. To the southeast, the Bank of America Tower at One Bryant Park rose in gradual, almost feminine curves to its 945-foot pinnacle. As the floor revolved west, the riotously colorful Westin came into view. The New York Times’ fortresslike scraper rose in the distance. So too did the near-complete 11 Times Square. The Intrepid. The cloud-wreathed sun setting over the Hudson River. The copper dome of Worldwide Plaza. And, finally, the GE Building’s Top of the Rock, site of New York’s last truly glamorous skyscraper-top restaurant, the Rainbow Room, which was closed by the Cipriani family on July 31.

Its landlord, Tishman Speyer, is currently looking for a new tenant. “The Rainbow Room is a great restaurant in which Rockefeller Center takes great pride,” said a spokeswoman for the company, in a statement. “We have not yet named a new operator.” More here.

Cybill Shepherd and Ryan O’Neal at the Rainbow Room via Getty.

Must Reads

We noticed you're using an ad blocker.

We get it: you like to have control of your own internet experience.
But advertising revenue helps support our journalism.

To read our full stories, please turn off your ad blocker.

We'd really appreciate it.

How Do I Whitelist Observer?

How Do I Whitelist Observer?

Below are steps you can take in order to whitelist Observer.com on your browser:

For Adblock:

Click the AdBlock button on your browser and select Don't run on pages on this domain.

For Adblock Plus on Google Chrome:

Click the AdBlock Plus button on your browser and select Enabled on this site.

For Adblock Plus on Firefox:

Click the AdBlock Plus button on your browser and select Disable on Observer.com.

Then Reload the Page