505 Greenwich Street: Not a bad place to retreat to after a humiliating Oprah interview.

All the shame that James Frey endured when his non-fiction memoir on addiction was revealed to be largely manufactured may have hurt his byline, but his bottom line is doing just fine: he and wife Maya have unloaded their third-floor combination condo at 505 Greenwich Street for $3.9 million according to city records (a trustworthy source).

The couple picked up the two units in 2005 and 2008 for a combined total of a bit more than $3.5 million, combining them into one enormous 2,800-square foot four-bedroom.

The condo contains an obscenely large 40-foot by 23-foot living room, more than big enough to gather your closest friends and family and break the news to them that your memoir was mostly fabricated. But then, they probably already knew that.

We're not sure where Mr. and Mrs. Frey are headed—they haven't picked up any new homes in New York City lately, at least under their own names, and we weren't able to reach Mr. Frey for comment. Not that we could believe what he would have told us anyway.

But given Mr. Frey's recent rebound (he's written a couple of novels—marketed as novels—since the Million Little Pieces fiasco), we're guessing it's somewhere nice. Maybe Los Angeles? Back in 2010 Mr. Frey told the New York Post that he was working on an hour-long drama with Mark Wahlberg for HBO about the pornography industry.

"We're going to tell the type of stories no one else has told before, and go places no one has gone before," he said. "Very private places, we imagine." (Perhaps the master bedroom at 505 Greenwich, overlooking the building's zen garden?) Or maybe he'll stay a few nights at Chateau Marmont, but tell everyone he's actually moving in for the next three months?

The buyers, Kenneth Rapp and wife Michelle, should be familiar to those who follow New York real estate: Mr. Rapp is a vice chairman at commercial real estate brokerage CBRE, where he's been since 1988. He was unavailable for comment. But we wish him luck with his new home—may he only be brought to Oprah's couch for good things, as the ancient Chinese proverb goes.

“With debt available and with interest rates so incredibly low, it encourages one to buy because money is so cheap,” he said. “If the asset class is in favor compared with what much of the alternatives are—if borrowing costs are incredibly low—it continues to steer people to want to invest in hard assets like real estate.”

Illustration by Peter Lettre.

Investment sales figures for the past few years bear this out. According to data from Cushman & Wakefield, the total volume of Manhattan investment property sales closed in 2011 was the third-highest total on record—at $25.8 billion. This marked an 88 percent increase over 2010, to levels not seen since 2007. And Massey Knakal’s Pricing Index, a measure of the change in price per square foot across all property types in New York City, registered a 6 percent increase in 2011 from the year before.

Still, experts said that velocity for the rest of the year, and whether it speeds ahead or screeches to a halt, is subject to a number of different factors.

Clearly the most unyielding of those is supply, which Helen Hwang, executive vice president of the Capital Markets Group at Cushman & Wakefield, recently described as “in check,” particularly for office space.
“The existing inventory is about 400 million square feet in New York—that’s just Manhattan,” she said.“The only thing that’s really under construction right now are World Trade Center Towers One and Four, which is about five million square feet, and you’ve got Boston Properties’ deal—250 West 55th Street, which is about a million square feet.” Ms. Hwang continued adding up square footage under construction in Manhattan and then subtracted the World Trade Center total, which, as she pointed out, is not new but replacing what has been lost.

“Effectively what’s under construction right now that will be added to the market is about 1.5 million square feet,” she concluded, “which is really not a lot for a market this size.” This leaves very little from which to choose, for buyers who experts say are keen on Class A office space.

On top of this, with the market still improving, not everyone is convinced that it’s a good time to sell. Plus, with a huge pool of real estate loans coming due in 2012, some partners just want out, leading to a trend that Ms. Hwang seemed reluctant to mention, given that it’s been bandied about so much.

“This has been said a great number of times,” she offered, “but we saw a great number of recapitalizations.” Last year, she estimated, 40 percent of total deals in the office arena were recapitalizations, whether to replace an existing partner or to infuse new equity into a deal that needed the capital.

“There’s not much out there—that’s what’s keeping pricing so high,” said Andrew Simon, executive managing director in the New York office of Colliers International. “I think that you’re going to see buildings that have maturing debt and they have to figure out what to do, how to hold on. That seems to be the primary story these days and that’s why you’re seeing deals like both Park Avenue Plaza and 299 Park—you saw the 49 percent interest in both buildings traded.”

Over at CBRE, Paul Gillen, a senior vice president in the Investment Properties Institutional Group, pointed out that his firm closed several major transactions last year, including the aforementioned 299 Park Avenue, with recaps as a theme. The Alaska Permanent Fund snapped up the Rockpoint Group’s 49.5 percent stake in 299 Park in a deal that revalued the property at $1.26 billion.

But with recaps serving as what Ms. Hwang calls a hedge in the improving market—sellers keep a portion, let a portion go—overall investment sales for 2012 are largely predicted to remain flat, a point Newmark Knight Frank president Jimmy Kuhn makes, with one caveat.

“In the very near term I don’t see velocity increasing that much because a lot of people in New York aren’t sellers,” Mr. Kuhn said, adding that that could change depending on one future condition. “And that is, if it appears that the administration is going to dramatically change the tax structure, people may bail out. That may be the linchpin to cause increased velocity. If people want to take the old capital gains tax rates before they change.” The current capital gains tax is set to expire at the end of the year and any new rate is up in the air, pending November’s presidential election.

Peter Von Der Ahe, who deals primarily with multifamily, agreed that the issue of capital gains could put pressure on sellers, providing an opportunity for foreign buyers in particular. The Marcus & Millichap first vice president of investments said that with “capital gains most likely increasing in 2013, there’s a financial incentive to sell your property this year.” He predicted that, for multifamily at least, as more buildings start to trade it will create a snowball effect of sorts. “It becomes self-perpetuating on the positive side, too—that’s what I see happening this year.”

As for the investment sales buyers, they constituted all the usual suspects in 2011, though institutional investor participation in the market rose to fill a gap left by private capital for the year. According to the Cushman & Wakefield data, institutional investors accounted for 36 percent of 2011’s total sales, REITs and private capital 26 percent each, and foreign investors 9 percent. For 2010, private capital was at 35 percent and institutional investors were at 15 percent.

Mr. Simon, at Colliers International, said that there is serious capital out there looking for a home. “Any of these big institutional, international groups have to look at New York as a safe haven.” He added that investors are looking for value-add opportunities and opportunities to boost returns, in a cap rate environment that has been low “for a very long time now.”

From Mr. Gillen’s perspective, REITs were obviously big in 2011 but there was another foreign influence, apart from, say, the Canadian REIT that bought 2 Gotham Center for $415.5 million in a deal he helped broker, or the Kuwaiti firm that paid $485 million—all cash—for 750 Seventh Avenue in another CBRE-brokered deal. “A lot of times, the name on the transaction wasn’t necessarily all the capital,” he said. “You had a lot of global capital backing the more traditional names in the city.”

Newmark Knight Frank’s Mr. Kuhn agreed. He anticipates foreign investors to continue looking for opportunities in New York. “But if they don’t team up with a local operator they will not be able to move fast enough and they will make a mistake,” he said. “Foreign buyers, if they don’t have a presence in New York and they don’t have an operating partner, I don’t see them as big competition.” He added that Newmark Knight Frank had just been hired by a large Australian group looking to partner with a local operator to build an office building.

Another barometer for investment sales velocity is leasing vacancy rates. Mr. Heller, at Studley, pointed to 200 Fifth Avenue, the old International Toy Center, where in 2010 the firm represented Tiffany & Co. in its 345,000-square-foot headquarters relocation. “The most recent rent paid was $85 a foot for a prewar building in Midtown South,” he said, “which had been a somewhat sleepy market for decades.” Drastically declining vacancy rates had changed all that.

Mr. Simon, fresh from a Grand Central District Office Building committee meeting, related how he had piped up about this lag between vacancy rates and the price a building can garner when sold. “I said to them, ‘I’ve been telling people for a long time that in the leasing market there continues to be a disconnect between what’s going on in leasing and what’s going on in investment sales,’” he said. “Because in the investment market there is very little product out there and what does come to the market sells at a very big price.”

At the end of the day, the ease of getting a loan for new development projects might be the best way to gauge investment sales velocity for the year. One source said he had just had lunch with a lender buddy from the workout department at a major bank, who described lending requirements as loosening and the bank as expecting to get paid off at par for loans still on its books.

Cgaines@observer.com

Gregg Weisser. (Photo by Hannah Mattix)

It took him two years, and he appears to have enjoyed every moment of it. “Those are the things that you kind of live for; that’s what I love,” he told The Commercial Observer. Now happily ensconced with the Moinian Group, where since October he has been charged with overseeing the commercial and retail leasing of the firm’s 20-building portfolio in New York, Dallas, Los Angeles and Chicago, Mr. Weisser spoke with The Commercial Observer about the challenges that lie ahead, and the promise of 3 Columbus Circle.

The Commercial Observer: How does the Moinian Group differ from working with a large financial institution like JPMorgan Chase?
Gregg Weisser: Everything to this point has enhanced my abilities to be here. I started as a broker at Cross & Brown, and I did that for a period of years and then joined what was then the Chase Manhattan Bank. At Chase, I was responsible for a lot of the owned assets and also third-party tenants during part of my tenure there over 20 years. The other part I spent doing tenant strategies on the tenant side, working as a tenant.

I would tell you that to be an owner, to have had a brokerage background—and I have my broker’s license, my New York State broker’s license—to be a broker, to be a tenant, and to be a landlord all brings me to being here, and everything that I did was very useful in getting me to this place. And I think it’s a unique set of qualities that allows me to understand the shoes of everybody that walks in this door. I know where they’re coming from, and I think it makes it easy for us to talk to each other and make deals.
You’re going to the Moinian Group. They own a ton of properties across New York, but what are the challenges working for a group that is somewhat prolific in New York City and is known to buy and build new buildings at a fairly steady clip?
The Moinian Group owns roughly 20 million square feet of space nationally. They have another 10 million square feet of development-ready sites across the country, 4.5 of which are in New York.

There’s a beautiful site on 42nd Street and 11th Avenue called 605 West 42nd Street. Joe has a vision of putting in 100,000 feet of retail on the ground floor and lower floors and putting a residential tower above. He also has a site on 34th Street and 11th Avenue, which we believe to be the best site of all of Hudson Yards, which is where the 7 train comes right up into the building at 34th Street and sits on the northeast corner of what will then be Hudson Street, and it runs an entire block.

So there are no buildings butted up against it, and there will be breathtaking views all the way around. Joe wants to put in office use. He wants to put in retail use. He’s thinking of a hotel. He’s an extremely creative guy.

My job is more limited to running the commercial and retail aspects of leasing real property. So while my expertise in other areas can be useful, and I’m often pulled into some of these meetings and some of these adventures, mostly what I focus on on a daily basis is to create and add value to the properties and make sure they’re rented up properly. That’s what I think my key performance measure is: How well are the buildings rented?

And how well are the buildings rented?
Well, I’m glad you asked [laughs]. Each one is in a different marketplace, so certain markets are hotter than others. For example, there is a claim that suggests that midtown south is probably one of the hottest real estate areas in the entire country, and fortunately Joe Moinian, who is a visionary and thinks about this stuff years and years ahead of anybody else, has four properties within that area. We have two of the four buildings nearly completely leased up, and the other ones are on their way to being leased up, and we have marketing campaigns for both of them and I think we’re doing pretty well.

The problem that I have is I have very high expectations and I would like to see these buildings leased 100 percent at all times.

There are a couple of opportunities to achieve better occupancy, and one of them is 535-545 Fifth Avenue. It’s a pair of buildings that butt up and they’re two blocks from Grand Central Station. The lobbies were renovated just a few years ago. They’re wonderful properties, they’re right on Fifth Avenue, and on those lower floors, we could break through the two buildings to create a 33,000-foot floor plate, which is very, very rare for a Fifth Avenue location near Grand Central Station in a reasonable class-A type of building, so that’s very cool.
Are there any new developments in the works for Moinian?
Actually, yes. We’re building a building over on Eighth Avenue in the 50’s and we think that’s going to be hotel-oriented. A lot of what we’re doing, a lot of what I see we’re doing, is we’re recapitalizing the assets, we’re trying to position them properly in the marketplace, that is what I see.

Joe could probably build buildings for the rest of his life without having to buy something, which to me is also very amazing.

Considering your feet are still wet, what type of deals have you worked on since joining the firm in October?
I can tell you that I am very pleased to be part of the group that’s going to see the 3 Columbus Circle building finally get finished, 1775 Broadway. When Joe bought this thing, it was an older building, it was not positioned in the marketplace properly. He was smart enough to bring his partner, SL Green, into the picture, who does most of the heavy lifting these days. But to be candid with you, it’s a team effort, and I’m just glad I’m on the team to finally see this property get realized the way Joe envisioned this thing when he first got into it.

Did you work on the Young & Rubicam deal?
Not prior to joining Moinian. I mean, I know all those guys pretty well because I was a tenant, and WPP, which owns Y&R, a lot of tenants tend to know each other very, very well in the marketplace. This was a very creative deal, and I would tip my hat to SL Green for really driving this one home.

This is a Madison Avenue mainstay, and to go over to 3 Columbus Avenue—let’s be honest, it had its fair share of bad press, or, at least, its financial troubles were well reported on. How did the deal come about?
I can tell you that when this thing started up, it went very, very quickly, and CBRE, who was representing their interests, pushed very, very hard to get this accomplished.

I can only tell you that 3 Columbus offered the most compelling argument of all to Y&R. By the way, the Columbus Circle area is full of media-type advertising tenants. This is a new hub, if you will, of tenancy. The Time Warner Center, Time Warner Cable, you have a lot of communication companies over there, so I think it’s almost natural for Y&R to want to be up there. I don’t see that as sort of a queer location. I see it as a normal course of events in a big city like this.

What’s been the Y&R effect? Are you starting to see a lot of other media companies visit 3 Columbus?
Yes, we are, and we’re looking at a lot of other opportunities. In fact, another lease was just signed yesterday that I can’t talk about for another floor at the building, so the building has real momentum going for it.

We are negotiating right now with a three-floor tenant. We’re going to be moving over there, so I’m told, now that 530 [Fifth Avenue] is no longer owned by us. So there are only going to be a couple of floors left.

Again, just to be party to a real successful project like that is really a great thing. Over my career, I’ve had an opportunity to be involved in some real winners, for instance 1 New York Plaza: Chase owned the building. And when we moved to Metrotech, when Forest City Ratner built those two buildings for us and we moved over there, the building was over a million and a half feet of empty space in a two-million-square-foot building. I was tasked with the responsibility—awesome responsibility—of leasing that building up, and it took me almost two years.

But you know what, we leased it up, and we turned it around, we turned the asset around and we sold it for almost double [the amount] that we paid for it. Those are the things that you kind of live for, that’s what I love.

drosen@observer.com

Frenkel & Co., an independent insurance company, has signed a seven-year lease renewal for 39,000 square feet on the fourth floor of 350 Hudson Street for its corporate headquarters, The Commercial Observer has learned.

350 Hudson Street. (Courtesy Property Shark)

Frenkel was represented by Eric Deutsch of CBRE. Trinity Real Estate was represented in-house by assistant vice president of real estate leasing Tom Lynch.

Asking rents at 350 Hudson Street were $49 per square foot. Frenkel’s current lease wasn’t up until 2015. But the firm was interested in making renovations to its current office space and decided to re-up for a new lease, which is now slated to end in 2022.

“They want to improve the space, because they saw themselves being there longer than three years,” Mr. Lynch told The Commercial Observer.

Frenkel initially came to 350 Hudson Street as a subtenant in 2007, and became a direct tenant once that sublease came up in 2010.

Frenkel will be paying a slightly higher rent than what it normally paid, according to brokers familiar with the negotiations.

The deal was finalized earlier this month.

Frenkel was founded in 1878 by German immigrant Emil Frenkel.

The company previously had offices in Tower Two of the World Trade Center when it was forced to evacuate following the September 11 attacks in 2001. Frenkel moved its headquarters to 1740 Broadway while opening a client service facility in Jersey City, New Jersey. It signed a five-year lease for 350 Hudson Street in 2010.

Drosen@Observer.com

Should Yuco Management aggressively market the 69,000 square feet of space Take-Two had called its own since 2002, thereby losing its anchor tenant? Or should it do anything it could to keep Take-Two, which had in some ways branded 622 Broadway as a distinctly hip and colorful office building, especially with its endless parade of behooded video game designers and executives?

“It’s the unique building where people don’t wear suits and ties and ride bicycles to work with their dogs,” said William Cohen, an executive vice president and principal at Newmark Knight Frank, who was hired alongside colleague Mark Weiss by Yuco Management to help decide the next best move. “I’m not kidding,”

A bird's eye view of 622 Broadway.

The building had, in some ways, been transformed by Take-Two’s tenancy, as if by osmosis. There was a roof deck with views of the surrounding Noho and Soho areas that even Mr. Cohen himself deemed “cool.” There were the six total floors of space that featured mostly open and collaborative—and sometimes dark and secretive—floor plans.

“They’ve got top-secret floors that you can’t get on to without a black hood over your head,” joked Mr. Cohen. “They’ve got floors where guys sit with the lights off staring at the monitors all day … There’s a lot of heavy duty stuff, and it’s very secretive.”

Another attractive feature in the building, especially for a producer of video game software, was a Best Buy located in 622 Broadway’s retail floor.

Yuco Management had owned the building for at least a decade. Prior to Take-Two’s arrival, the building was outfitted with brand-new air conditioning, plumbing, bathrooms and elevators. It had been a building accustomed to having multiple tenants. Then Take-Two arrived, and the building suddenly changed from being known primarily as a multi-tenant office building to being a veritable house of video games.

Take-Two Interactive produces video games and other interactive entertainment through Rockstar Games and 2K, which publishes its titles through the 2K Games, 2K Sports and 2K Play brands.

If Take-Two left, Yuco wouldn’t have filled the void with a legal tenant. But there were new media, advertising and technology firms that had covetous eyes for the space.

“People were calling nonstop to get into the game,” said Mr. Cohen. Those suitors included prospective tenants and prospective new owners.

“It’s a wonderful blank canvas for somebody else.”

When it came time to negotiate a new lease, with CBRE’s Stephen Siegel and Harley Stevens representing the tenants, it became clear that this was not going to be a leisurely drive through Grand Theft Auto’s Vice City.

The negotiations lasted more than a year.

Take-Two, despite having grown attached to the space, had Messrs. Siegel and Stevens venture out to the marketplace to research its options.

Both Mr. Siegel and Mr. Stevens declined to be interviewed for this story. Take-Two declined to comment on its new lease as well, citing company policy.

Secret rooms and a lax policy on dogs in the office aside, Take-Two was a very alluring tenant to other building owners.

Those old schoolers who scoff at the notion of a video-gaming company as a blue-chip company in the new economy should take notice of the changing dynamics of an industry normally written off as being strictly child’s play.

The video-gaming industry has evolved greatly from its Atari heyday to its Blu-ray and full-body gaming present. Video games have become a global industry that’s raked in $56 billion in 2010 and is growing by nearly 9 percent a year, according to a recent report in The Economist. Also, the average age of a video gamer is 37 and 42 percent of those gamers are women, according to the Entertainment Software Association. Seventy-two percent of all households in the U.S. play video games.

Take-Two’s numbers were also strong. The company posted a net revenue of $236.3 million in the third quarter of fiscal 2012, a drop from the $334.3 million it posted in the same quarter in fiscal 2011.

Eleven percent of its net revenue was driven by “digitally delivered content,” like game apps for Grand Theft Auto III for iPhone and Android handheld devices. Take-Two has so far posted a $677.7 million profit this year, compared to $954.6 million the same time last year.

In short, the industry is lucrative enough to make the average commercial real estate broker wish she had studied computer programing.
But in the negotiations, the size and scope of the video-game industry mattered little to Yuco and its Newmark Knight Frank team.

“There came a time where we were clear that we had no fear of losing them,” said Mr. Cohen. “I can say that was the game changer. I think they liked to tell us they were prepared to move when I believe they were hard pressed to find a building that would allow them to ride to work on their bikes with their dogs.”

Yuco Management would eventually come to the realization that keeping Take-Two as a tenant made more sense.

In January, both sides agreed to a new 10-year deal for six floors sized at 69,000 square feet. The asking rent was $47 per square foot.
As part of its deal, Take-Two will receive some “cosmetic enhancements,” including exterior signage for Take-Two and a redesign of the building’s lobby.

But Mr. Cohen blanched at a comment made by Mr. Stevens in a recent Crain’s New York report stating that Take-Two will be paying lower rent than it did when it first moved into the building in 2002.

“They got value,” he said, without elaborating on the exact costs. “The most important thing is that the landlord made certain concessions, but he didn’t take it on the nose.”

drosen@observer.com

The university will lease the building’s entire fifth floor and a portion of the eighth. Asking rents at the property, a 190,000-square-foot building owned by Capstone Equities, are in the $30s per square foot.

156 William Street.

Pace had already occupied the fifth floor but will be moving within the 12-story building to take the space on eight. The school, which splits its campus between Westchester and Lower Manhattan, used to have its second floor in the property on the entire penthouse level. Capstone, through its CBRE brokerage representatives at the property, negotiated to have Pace move that floor so that it could market the 12th floor along with an availability on the entire 11th floor as well, creating a contiguous block that together totals about 28,000 square feet and could potentially be easier to market to prospective tenants.

Pace was represented by a Newmark Knight Frank team led by NKF’s New York area president David Falk and executive Kyle Ciminelli. A CBRE agency team led by executive Brad Gerla represents Capstone at the building.

Pace has been active in Lower Manhattan in recent months. As The Commercial Observer first reported in January, the university leased an entire building, 140 William Street, which totals nearly 50,000 square feet, for its Dyson College of Arts and Science. In a conversation with The Commercial Observer at the time of that deal, William McGrath, Pace’s chief administrative officer and a senior vice president at the university, said that the dance school would be among the programs that relocated to the space.

Pace overall has grown substantially in recent years. Mr. McGrath said that a decade ago the school had enough dorms to house about 500 students. Today he said that Pace has 2000 students in its residences.

“Our expansion here is inline with the changes that have happened in lower Manhattan becoming a far more popular place to live and work and for culture,” Mr. McGrath said then.

Mr. McGrath couldn’t be reached to comment on the deal at 156 William Street. Pace uses the space in the property to house administrative offices.

Dgeiger@Observer.com

The tenant operates career schools that train nurses, medical assistants, commercial drivers and computer specialists among other professions.

A source familiar with the lease said that Educational Affilitiates plans to open a nursing school at the location.

97-77 Queens Boulevard.

The deal is the second substantial lease that LeFrak has recently done in its sizeable Queens portfolio. The company owns hundreds of thousands of square feet of commercial and residential space in Queens, much of it in Rego Park, a bustling section of the borough known by most New Yorkers for its big-box retail mall.

In recent weeks, LeFrak completed a 25,000-square-foot deal at the nearby office property 95-25 Queens Boulevard with New York Life Insurance. New York Life took the space for 10 years, at rents in the $30s per square foot. Rents in the Educational Affiliates deal were similar, said a source, but the tenant may have been eligible for discounts that are offered by the city as a way to incentivize leasing in the area and would lower the actual rates it will pay.

The discounts reduce certain taxes and can lower a tenant's electricity charges as well, credits that can reduce a rental rate by as much as $10 per square foot or more, according to brokers familiar with the programs. It wasn’t clear by press time yesterday whether Educational Affiliates is benefiting from these incentives.

Roy Chipkin, a leasing executive with the real estate services firm CBRE, represents LeFrak at both properties. Mr. Chipkin couldn’t be reached for comment on the deal with Educational Affiliates, nor did a spokesman at LeFrak return calls seeking comment. Executives at Educational Affiliates, which is based in Baltimore, Maryland didn’t return repeated calls for comment. Darren Shibuya, a broker based out of the brokerage firm CresaPartners’ Los Angeles office, represented the school in the deal. Mr. Shibuya also couldn’t be reached.

The deal is part of a recent swell of activity in Queens, an area where leasing is normally under the radar. Last month, as The Commercial Observer first reported, the Queens District Attorney’s Office is considering a 180,000-square-foot relocation to Forest Hills Tower, a large office property on the corner of Union Turnpike and Queens Boulevard in Forest Hills. The Queens DA would take space being vacated by the airline JetBlue, which is relocating to Long Island City.

Dgeiger@Observer.com

5:45 The 116th annual REBNY banquet is just getting started at the New York Hilton. Chicago Title is having an invitation-only party on the building’s second floor.

5:46 As usual, the night’s official festivities begin with a cocktail party in the room adjacent to the Hilton’s main ballroom, where the dinner is held. Jason Muss, a principal at Muss Development, stands near the entrance to the room with Jared Kushner (owner of The Commercial Observer), Jared’s wife, Ivanka, and Fried Frank chief Jon Mechanic. “I love this party. It’s a great place to catch up with people,” Mr. Muss says.

5:50 The cocktail reception is quickly filling up. Simon Ziff, a principal at the financing company Ackman Ziff, stands near the open bar with his wife. “It’s overwhelming,” Mr. Ziff says. “Think of all the people here. A few seconds to say hi to each. That’s a lot of seconds.”

6:00  Hal Fetner, a developer who is building two prominent residential buildings with partner the Durst Organization, steps over to the bar. “The feeling in the room is always tied to the health of the market,” he says. So what’s the vibe? “Ask me later. It’s too early to tell. But I think things are good.”

6:01 John Santora, an executive at the real estate services firm who recently helped negotiate an agreement between landlords and the union that represents building employees, 32BJ, is chatting with C&W appraisal expert Brian Corcoran. “A lot of people worked on that deal,” Mr. Santora says of the negotiations. “I can’t take the credit for it.”

Steve Spinola, REBNY’s president, greets guests in the main room of the cocktail space. “We had to put a few tables upstairs,” Mr. Spinola says, indicating that attendance at the banquet has picked up from last year. “We got a lot of last-minute calls from people who wanted to come.”

6:17  Alan Weiner, the group head of Wells Fargo Multifamily Capital, one of the biggest lenders in the city, is chatting busily with Rob Speyer, one of the chief executives of the real estate firm Tishman Speyer.

Eric Deutsch, the former head of the Downtown Alliance who now is an executive at Montparnasse 56, a builder of observation decks, surveys the crowd. “My first job out of college in the early 1990s was with REBNY,” he says. “The market was terrible then and they barely had anyone at the banquet. They made me sit up front during the dinner to make it seem like people were here.”

6:30  Congresswoman Carolyn Maloney strides in. “I just secured us $300 million, a high-speed-rail grant to develop a line between Boston and New York. It’s very exciting,” she says, taking a crab leg. After she’s done with the morsel of meat, she holds the shell and looks for the waiter. “Where do I put this thing?”

6:32 The room’s cocktail banquet is about 75 percent full.

6:45 Robert Lapidus, an executive at the real estate investment company L&L Holding Company, becomes enraged when The Commercial Observer asks him if he is bidding on a leasehold interest in the Flatiron office building 114 Fifth Avenue, as is rumored. “We’re not here to talk about fucking business!” he yells, grabbing The CO’s notepad and tossing it.

Gary Green, head of the building services company Alliance, briskly and very politely retrieves the notebook while Mr. Lapidus hurls epithets at The CO. Acting like a true gentleman—and also looking the part in a finely cut tuxedo—Mr. Green apologizes for his friend. “You can’t do that! Knucklehead!” The CO overhears him say to Mr. Lapidus.

6:46  Kenneth Fisher, a partner at the real estate investment company Fisher Brothers, tells The CO that this is the first REBNY banquet he has been to in five years. “Every time this year, I’ve been playing golf in the desert [at the Bob Hope Classic].”7:00

Jeff Roseman, a retail leasing executive at Newmark Knight Frank, squeezes through the crowd. “It’s a great place to see old friends.” He greets Steve Green, the founder of the city’s biggest landlord, the REIT SL Green.

7:05 “This is my childhood,” Helena Durst, looking elegant in a flowing dress, says of the banquet. “Do you like Christmas? Do you like Sunday dinner? That’s what this is for me. I have so many memories of coming to this party.”

7:09 Deputy Mayor Robert Steel and Councilwoman Jessica Lapin walk through the room together, busy in conversation.

7:15 Guests are being pushed out of the cocktail reception into the main dining room. The dinner is about to begin.

7:16 “Do I like this party? It’s OK,” Kathryn Wylde, head of the Partnership for New York City, says. “I go to a lot of parties.”

7:25 The CO bumps into Woody Heller in the men’s room and mentions to him a rumor that Will Silverman, Mr. Heller’s colleague at Studley, doesn’t sit at a desk but stands. “It’s true,” Mr. Heller says. “He has a swivel desk that can be lifted and he stands at it rather than sits. He says it’s more comfortable.”

Does Mr. Heller do the same thing? “I pace,” Mr. Heller says.

7:40 The crowd, now dense, is heading into the main ballroom.

7:41 Bruce Mosler, a top leasing executive at Cushman & Wakefield, chats with friends outside the ballroom. “A lot of my good friends are in real estate, so this is a fun night for me, I get to see them all,” Mr. Mosler says.

7:42 Paul Pariser, a chief executive of the real estate investment company Taconic, stands nearby. Known as an avid skier, The CO asks him if he’s been to Colorado yet this season. “There’s no snow!” Mr. Pariser replies.

7:50 Howard Michaels, of the financing firm Carlton, is making his way into the ballroom. “If you’re in the real estate business and you’re not at this party, you have to have your head examined,” Mr. Michaels says. “Want to know something? I almost didn’t come. That was the pep talk I gave myself.”

8:00 Already murmurs are going around about where the after-parties are going to be. “I’m not going to an after-party,” says Bob Knakal, chairman of the brokerage firm Massey Knakal, which during the boom years threw epic REBNY parties. “I have dinner plans with my wife.”

8:05 Steve Berliner, an executive at the brokerage company Studley, flashes The CO a stack of his business cards, which he plans to hand out. “Tonight is the best recruiting night of the year,” he says. “I started getting recruited to Studley six years ago at this party.”

8:20 The CO tells Amira Yunis, a retail leasing executive at CBRE, that she looks stunning in her black dress. It’s true, the former model does. Asked what her plans for the year are, she jokingly grabs The CO by the shoulders and shakes, “Make millions and millions and millions of dollars!”

9:00 The ballroom is full. But few people are eating. In the center of the room, Mitch Arkin, an executive at C&W, is chatting. “I haven’t eaten yet,” Mr. Arkin says. “I’m not going to eat.” What is he using for fuel, a hungry CO asks. “Adrenaline.”

9:10 “After-party is at Nobu,” Matt Astrachan, an executive at Jones Lang LaSalle, tells his colleague Mitch Konsker and C&W retail executive Brad Mendelson. “JLL party at 10!” Mr. Mendelson booms.

9:15 Dessert is being served. Some kind of chocolate-coated-ball concoction. The CO is still looking for dinner, finds a steak and eats it. It’s not as rubbery as rumored, though it’s certainly overdone.

9:45  Steve Durels, SL Green leasing chief, and Paul Glickman, an agency leasing specialist at JLL, walk out chatting. The banquet is winding down.

10:00 Kent Swig, with a closely cropped beard and carrying a few extra pounds, makes his way out. “I’m having a beer,” he says.

dgeiger@observer.com

The approximately 340,000-square-foot midtown south building is held by an anonymous family owner, people familiar with the property said. The building will likely require a substantial infusion of cash in the near future, a factor that is perhaps prompting the offering.

114 Fifth Avenue.

Grey Advertising has a healthcare group at the location that is set to relocate from the property in upcoming months, leaving vacant as much as 70,000 square feet. A person familiar with the condition of the building said it will likely require a renovation in order to lure potential tenants and that the current owner was considering a sale of the building’s leasehold so that it could select a capable real estate operator to invest the necessary capital and exert the kind of hands on management the property will likely require to operate at its full potential.

The owner, listed in mortgage documents as 114 Fifth Avenue Associates LLC, has hired the real estate services firm Wells Hill Partners to market the property. Wells Hill executives Peter Gevalt and Daniel Mizukovski would not comment on the sale.

A potential deal appears well timed. According to data released by the real estate services firm CBRE yesterday, the Midtown South neighborhood where 114 Fifth Avenue is located, is the strongest performing office market in the country. CBRE’s statistics showed that vacancy dropped to the lowest level in the city during 2011, falling from 12.5 percent to 8.8 percent year over year.

“Midtown South was supposed to be the cheaper market,” Mary Ann Tighe, CBRE’s New York area CEO said during the company’s presentation to the media at its midtown offices. “That has changed. It’s now a culture choice.”

Ms. Tighe noted that rents have risen in a select group of high end Midtown South buildings to higher rates than in Midtown, what is widely considered the city’s priciest office district.

“As more people are rehabilitating their buildings [in Midtown South], pricing is getting into the $60s and $70s per square foot,” Ms. Tighe said.

One broker not affiliated with the sale said that the building could fetch as much as $800 a square foot, a price that would put the property’s value at over $270 million.

Dan Geiger is reachable at DGeiger@Observer.com

But in a ritual repeated more or less each year, the archbishop of the New York archdiocese’s 2.37 million Catholics and one of the Vatican’s most forceful spokesmen in the United States during the 1980s, was summarily ignored by a brokerage community far more interested in making deals than in hearing the Gospel.

Whether it was Mayor Bloomberg or Mayor Giuliani or a litany of governors going back to Nelson Rockefeller, guests of the annual gala have routinely been humbled at the New York Hilton’s Grand Ballroom, a cavernous space so stuffed each January with tuxedoed men and a smattering of elegantly dressed real estate women as to intimidate even the most confident of speakers. The collective chatter is fierce and formidable, and it swells to a deafening volume, with each broker hyping his or her year in deals with disingenuous aplomb.

“It almost doesn’t matter who the speakers are, because I’ve never seen—as much as I love my colleagues—a ruder group of people than at this banquet,” said Peter Hauspurg, chairman and chief executive of Eastern Consolidated and a 30-year veteran of the gala.

Affectionately referred to by seasoned vets as “The Liars Ball” for the rosy real estate projections offered up by attendees, this year’s affair, the 116th in the board’s storied existence, will boast more of the same, with brokers coughing up $1,000 per seat to schmooze, stir up new business and drink. Indeed, most confirm, they didn’t ante up for a $10,000 table simply to nosh on rubber chicken.

“It’s kind of the best and the worst of New York,” said Cherrie Nanninga, a chief operating officer at CBRE and a gala vet. “It’s the best in that it gets everybody together and it’s a real community. And it’s the worst in that … there’s no decorum whatsoever.”

The evening does start with some decorum, at least. Just before the gala commences, the REBNY Foundation holds its annual cocktail party inside the hotel’s Mercury Room, where the biggest builders and brokers in the real estate game convene for a civilized, invitation-only gathering. “That really has the top dogs in the industry, so it becomes a very clubby room,” said Mr. Hauspurg.

But then the action moves to the Grand Ballroom, where the male-dominated scene—“Like a bookie room with booze,” quipped real estate maven Barbara Corcoran—turns to the tried-and-true act of handing business cards. “It’s an active time, and a million cards are given out that night,” said Larry Silverstein, chief executive of Silverstein Properties. “Everyone walks in with stacks of cards to give out. Halfway through the evening the cards are all gone, and you say, ‘Holy shit, what happened?!’”

Armed with their stacks of cards, brokers use the gala’s program to see where in the sea of formalwear their intended prey can be found. “There’s 1,100 people and everybody has their book where everyone is seated, and people just kind of take that book and start going and visiting [people],” said Mr. Hauspurg.

The evening also has its share of overeager, albeit univited brokers desparate to break in and who, price be damned, try to sneak into the party without paying the hefty fee.

“It’s all vendors who want to crash,” said one up-and-coming broker, who has attended the gala and, in fact, snuck a few of his friends in on several occasions. “I would say the worst vendors are the ones who sell office furniture.” Crashing the parties has become less of an issue, assured some REBNY members. “There’s always guys waiting outside to sneak in and all kinds of stuff,” added Mr. Silverstein, who was chairman of the Real Estate Board of New York from 1983 to 1985. “But I think today that is rare, I assume.”

And when they’re not hunting down business, gala attendees are on the lookout for free wine, a surefire commodity in an event that features a cash bar and plenty of thirsty guests. “Wine is sort of entering the consciousness to the industry as a whole,” said Mary Ann Tighe, REBNY chairwoman and a tristate chief executive at CBRE. “In the early years of my career, the word passing [was], “Go to the Port Authority table, they have the wine.’”

In the late ’90s, to be sure, the Port Authority’s table was favorably situated in the main floor of the gala. Throw in the two million-plus square feet in vacant space the agency was looking to rent out at the time and its copious amounts of wine, and the Port Authority’s table became a popular destination for brokers thirsty for business and a free glass of tipple, several veteran brokers recalled.

“I subsequently came to realize that this was part of the Port Authority staff’s cleverness,” added Ms. Tighe. “They understood that everybody would come to see them if they had wine at their table.”

“I don’t think it was good wine,” said Ms. Nanninga, who sat at the table during her time as deputy chief financial officer and director of real estate for the Port Authority. The wine, she said, helped not in securing business, but in meeting new brokers. “The brokerage community was very, very important to us, because we were trying to establish that … you could do business with the Port Authority,” added Ms. Nanninga.

Over the years, the industry’s biggest players—and biggest oenophiles—would bring in cases of their own fine wine to the gala. Unlike the Port Authority, however, this powerful group, which has included Vornado Realty Trust chief executive Mike Fascitelli and Newmark Knight Frank’s Neil Goldmacher, was hardly as generous. “It’s always just for their table,” said one developer. “I’ve had some of it. It’s excellent.”

Mr. Goldmacher and Mr. Fascitelli did not return calls requesting comment.

When the clock strikes 10, and brokers and developers are on the hunt for the next big party (or an empty cab), another group of industry veterans has typically splintered off to the 21 Club, where wine, once again, becomes a central talking point among real estate professionals. Cassidy Turley’s Richard Bernstein and Mark Boisi, along with colleagues Robert Billingsley and Jim Fredericks, have for the past two decades used the lounge area at 21 Club to decompress with a good bottle of red wine, like Colgin Cellars or Bryant Family Vineyard’s cabernet sauvignon.

“When we come through the doors of the 21 Club and they take one look at me and the rest of my crew, they start salivating, because they know we’re going to be cracking open the wine and going pretty deep,” said Mr. Boisi.

For those looking to amp things up a notch, brokers have historically ventured to the after-parties thrown inside the Hilton by the Title Insurance Company. “It’s drinking and shooting the bull and the Title people wanting to make sure that they are in your face so that the next time you are doing a deal you are calling them up,” said one real estate figure.

The parties have also been known for being risqué in the past, according to several brokers who pointed to the ’80s as a particularly decadent era for the REBNY gala. “I’ve been to REBNY parties where the assumption of even myself or some of the women that I work with being there, we were automatically thought of being part of the prostitution crowd,” said a longtime female real estate professional, who believes prostitues were frequenting the event. “It’s not just the REBNY gala, it’s an across-the-board-thing.

“Of course you still hear about the parties and the extravagant entertaining that goes on, but it’s not on the scale that it used to be,” she added. “Maybe because of the lack of money.”

Others, however, denied the event was ever as louche as others purported it to be. “Are there beautiful people there? Yes, but I have yet to see anything more than hand-holding,” said another real estate figure.

While the evening as a whole remains like, as one real estate professional put it, “a continual bar mitzvah” for those who have been attending the affair since the Kennedy presidency, at least one young broker failed to see the silver lining of such a pricy night out.

“The whole party sucks,” the broker sniffed. “It’s $10,000 for a table and a cash bar.”

drosen@observer.com