Jared Kushner, Katie Holmes and Mike Bloomberg (PMc)

- The intimidatingly assiduous Peggy Siegal greets people at the door; thanks us for coming to celebrate party with The New York Observer. "We are The New York Observer!" We cry. She doesn't even pause. "Well, it's great to see you anyway."

-Terry McDonell: I've always loved the Observer, I have great respect for Peter Kaplan. The coverage of everything I was interested in New York in the past 25 years was reflected in The Observer at the highest level.

- Ray Kelly recalls the last time he was at the Four Seasons. "[We] feel like you never leave," we tell the Police Commissioner. His reply: "A lot of people feel that way."

- Spike Lee keeps on puffy coat all evening, talks to Katie Holmes, Donald Trump. Catch tail end of his conversation with Mr. Trump: "Well, that's one thing we agree on."

- Mayor Bloomberg gets onstage, proceeds to riff about slipping Harvey Weinstein a script (Bloomie on Bloomie), Cory Booker ("The handsomest mayor West of the Hudson") and The Observer ("It's OK when you needle somebody else, but not me.")

- Michael Shannon confounds half the party with his celebrity status. "What famous person is that?" we are asked more than several times. We finally after give up and refer them to Boardwalk Empire after several of our "the Future General Zod" joke receives blank stares.

- Nick Denton refuses to take photo with Rupert Murdoch because it's "too obvious."

-Chuck Close: I love the Observer almost in spite of myself. At first it was a guilty pleasure. When I go to Europe and can't read you, I get really upset.

- Mayor Cory Booker meets Manhattan Borough President Scott Stringer’s press secretary/Girls actress Audrey Gelman. Mr. Booker finds a way to bring the conversation back around to Star Trek.

- Game Change’s Emmy-winning screenwriter Danny Strong still getting recognized for his years on the TV show Buffy the Vampire Slayer. But he's a good sport, and challenges fanboy to name the one episode of the hit show that was nominated for an Emmy. (Answer: "Hush.")

-Former editor Peter Kaplan begs off with the excuse that he is trying to wean himself off of anti-anxiety medication.

-Ronald Perelman: I love the publication! I think everybody here is great. I think this is the best collection of New Yorkers I've seen in 20 years!

- Jay McInerney inquires about the after-party; never shows up.

"There's an abundance of Fracas at this party," noted Grey Gardens producer Rachael Horovitz, referring to the heady tuberose perfume-not to be confused with an abundance of Farkas, two of whom, Jonathan and wife Somers, lingered nearby.

Ms. Ward's dress, by Marchesa, best described as a peaked brocade meringue, made it difficult for well-wishing guests to get close. "This man is in the book!" Ms. Ward exclaimed, standing with Lehman vet Robert Shapiro. "I see a lot of the Lehman guys are here. I'm so touched they came!"

"Well, you know us Lehman guys, we run in packs," Mr. Shapiro said softly, before asking: "So what was it like being with Imus?"

"You know, he wrote me the loveliest note after I went on the show; it said, 'Dear Vicky, your book is amazing and you are gorgeous, what a winning combination!' And it was on beautiful stationery, with beautiful handwriting," Ms. Ward trilled.

Bald billionaire Ronald Perelman, wearing a cashmere sweater vest under his pinstriped blazer, chatted with society grande dame Louise Grunwald. In a ruched amethyst sheath, his ex-wife Patricia Duff steered clear, posing instead with pundit Monica Crowley while Patrick McMullan squatted snapping their photograph, suggesting the two blond women start a TV show together. "We've actually talked about it!" they giggled in unison.

Details editor Dan Peres arrived with his wife, actress Sarah Wynter, and completed a quick tour before heading back down the stairs. Vanity Fair editor Graydon Carter was also there, with wife Anna.

"I started the book on my flight over from Washington and I can't wait to finish it on my flight to L.A.," said jet-set bloggeress Arianna Huffington.

"Wait, who's on the back of the book?" financier Steve Rattner asked fellow moneybags Jeffrey Leeds, before flipping his copy over and finding out: superstar New Yorker writer Ken Auletta, whose Greed and Glory on Wall Street was the unofficial prequel to Ms. Ward's tell-all!

"I wrote a blurb for the back of the book, so I must like it, right?" Mr. Auletta said. "No, seriously, I really loved the book; she's done an amazing job creating characters you empathize with."

Like the storm-struck waves Lehmanites failed to avoid, Ms. Ward's dress was a pale, sculptural affair; a feast of jutting peaks of brocade meringue, making it difficult for well-wishing guests to pose for photographs with the Marchesa-clad authoress. Standing with Lehman vet Robert Shapiro, the Vanity Fair–er exclaimed, "This man is in the book! I see a lot of the Lehman guys are here, I'm so touched they came!"

"Well, you know us Lehman guys, we run in packs," Mr. Shapiro softly noted before asking, "so, what was it like being with Imus?"

"You know, he wrote me the loveliest note after I went on the show; it said, 'Dear Vicky, your book is amazing and you are gorgeous, what a winning combination!' And it was on beautiful stationary, with beautiful handwriting"—beautiful is stretched and over-enunciated in that singluar Oxbridge lilt.

Packed like silk-stocking sardines, such a group of high-powered literati are not in the habit of wheedling through so thick a crowd.

Ronald Perelman, wearing a weather-unwise cashmere sweater vest under his pinstriped blazer, chatted with perennially chic Louise Grunwald before saying hello to publicist czar Peggy Siegel.

In a ruched amethyst sheath, Patricia Duff steered clear of her volcanic ex-husband, whose gleaming head was fortunately easily spotted in the crowd. Ms. Duff posed with pundit Monica Crowley while famed photog Patrick McMullan squatted and swayed snapping their photograph and gamely suggesting the two blondes start a TV show together. "We've actually talked about it!" they giggled in unison.

Details editor Dan Peres arrived with actress Sarah Wynter and completed a quick tour before heading back down the stairs. "They had another event," a bystander sympathetically whispered to the Transom. Graydon Carter arrived blustery-haired with wife Anna to well-wish his monthly's latest hardcover hero.

Ken Auletta, who with Greed and Glory on Wall Street wro the unofficial prequel to Ms. Ward's tell-all, told the Transom, "I wrote a blurb for the back of the book, so I must like it, right! No, seriously, I really loved the book, she's done an amazing job creating characters you empathize with."

"I started the book on my flight over from Washington and I can't wait to finish it on my flight to L.A.," bloggess Arianna Huffington told the Transom of her Huffington Post contributor's best seller.

Before leaving, Steve Rattner asked financier Jeffrey Leeds, "Wait, who's on the back of the book?" before flipping his copy over to peruse the back cover.

Grey Gardens producer Rachael Horovitz noted "the abundance of Fracas at this party," not to be confused, of course, with an abundance of Farkas, two of whom, Jonathan and wife Somers, lingered nearby.

The Daily News's Rush & Molloy, who are moving their gossip column from the daily edition to the Sunday issue, have compiled a roundup of some of their most interesting famous people stories. [R&M]

Katie Holmes and Tom Cruise will be on separate covers of the New York Times' T Magazine this weekend. She told the magazine: "There's a misperception about me that I just became this wallflower, this woman who doesn't have any control of her life." [People]

Gothamist was awarded the dubious honor of meeting the Real World: Brooklyn cast and taking a tour of their Red Hook home. [Gothamist via Curbed]

Ronald Perelman and Patricia Duff have settled their epic custody battle over daughter Caleigh. According to the agreement, all three family members will "continue to see therapists." [P6]

Billionaire Ron Perelman and ex-wife Patricia Duff will return to court next month, this time to discuss the order of protection daughter Caleigh filed against her mother this summer over "emotional abuse." [P6]

A Comme des Garcons for H&M dress is already on eBay (it's a size 8 with a starting bid of $750, in case you didn't make yesterday's opening). [The Cut] 

A characteristically humble Kanye West on his career: "I realize that my place and position in history is that I will go down as the voice of this generation, of this decade, I will be the loudest voice...It's me settling into that position of just really accepting that it's one thing to say you want to do it, and it's another thing to really end up being like Michael Jordan." [AP]

Stylist Rachel Zoe seems to have patched things up with former client Nicole Richie, who made the stylist a household name by referring to her as "raisin face" and "lettuce cup" on her Myspace page. [P6]

Damon Dash, who co-founded Roc-A-Fella Records and Rocawear, is pretty much broke. [NYDN]

Michelle Williams is reportedly officially dating her close friend director Spike Jonze, who was previously married to Sofia Coppola. [Daily Mail]  

Vogue intern and New York Ranger Sean Avery, 28, is dating 51-year-old Kelly Klein, ex-wife of Calvin. [P6] 

In the ongoing custody battle between Ron Perelman and Patricia Duff, their 13-year-old daughter Caleigh is refusing to speak to her mother or go on vacation with her, according to the Manhattan judge handling the case. [NY Daily News]  

Not kosher: Former Real World contestant Kevin Powell, who is running for Congress, told an audience of Hasidic Jews Monday night that he would "bring home the bacon." [P6] 

Alex Rodriguez is working things out privately with wife Cynthia regarding visitation rights and alimony payments in order to avoid having to admit to his extramarital affairs in court. [NY Daily News] 

Katie Holmes has arrived in Manhattan to prepare for Arthur Miller's All My Sons, which will premiere on Broadway September 17. [Us Weekly]

NYC Council member Tony Avella is accused of receiving a bouquet of flowers from Pamela Anderson. Quelle scandale! [Politicker] 

A spokesman for Mr. Perelman issued a statement, the AP reports. In it, the Revlon billionaire says Ms. Barkin is merely trying “to further enrich herself.”

Responding, a spokesman for Applehead I called Mr. Perelman’s lawsuit “frivolous,” “without merit” and “yet another attempt to avoid honoring his written contract to contribute more than $3 million to Applehead Pictures….The fact is, Applehead only has money because others stepped in to contribute what Perelman wrongfully withheld," the statement says. "Perelman's cynical abuse of the legal system is disappointing, but not surprising."

Among the more than 100 objects from her collection, a 22.76 carat diamond ring is expected to fetch $800,000 to $1,200,000. A ruby and emerald Art Deco evening bag formerly belonging to the Duchess of Windsor is estimated at $60,000 to $80,000.

The New York viewing will begin on October 6.

The two-year-long deal concluded on Sept. 29, when Jay-Z closed on the seventh-floor penthouse in a converted 1929 brick warehouse building on Hudson Street, between Desbrosses and Vestry streets, for $6.85 million, city transfer records show.

The raw-space apartment covers some 8,000 square feet with 3,000 square feet of outdoor terraces, and was listed as being bought by a corporate entity known confusingly as Brooklyn Projects L.L.C.; Jay-Z signed the deed under his legal name, Shawn Carter. Mr. Arnell's wife Sara was listed as the prior owner on the transfer records.

Jay-Z's deal for Mr. Arnell's penthouse capped a well-publicized apartment hunt by the 34-year-old "retired" rap artist that, according to sources, included scouting a coterie of the city's prized downtown properties, including Israeli investor Jonathan Leitersdorf's 8,000-square-foot triplex at 704 Broadway, listed at $19.99 million, and Robert De Niro's 4,600-square-foot Hudson Street triplex, listing for $15 million. Jay-Z settled on Mr. Arnell's penthouse after the advertising executive purchased Tommy Mottola's bucolic Katonah estate for a reported $17.5 million.

In August, when the deal went into contract, the New York Post reported that Jay-Z's business partner, Damon Dash, had been in line to purchase the apartment before Mr. Arnell unloaded the place to Jay-Z, in the process cutting Corcoran broker Wilbur Gonzalez out of a reported six-figure commission and sparking talk of legal action against Mr. Arnell.

Mr. Arnell-the chairman and chief executive of the Arnell Group, a New York–based advertising firm whose clients include DaimlerChrysler, Mars, Reebok International and DKNY-declined to comment on the proceedings, as did a spokesperson for Jay-Z.

Mr. Gonzalez also declined to comment.

Music-industry watchers viewed the real-estate shake-up over Mr. Arnell's penthouse as yet more evidence of the unraveling partnership between the two Roc-a-Fella Records partners, along with Jay-Z's reported plans to launch a cognac brand with Grey Goose to compete with Mr. Dash's Armadale Vodka.

How do the neighbors feel about the competition coming to their exclusive downtown condo building? Two years ago, Jay-Z had come close to signing a deal on the apartment for $6.5 million, before tenants of the Hudson Street development-which itself made headlines in January after the condo board filed suit seeking $5 million from the developer to cover damages and claims of shoddy construction-reportedly derailed the sale, fearing Jay-Z would bring his celebrity lifestyle to the placid halls of their exclusive downtown address. The Arnells filed a lawsuit in May 2002 against two tenants they claimed interfered in the sale by posting notes in the lobby warning tenants of Jay-Z's "criminal record and … lifestyle of knives, guns and violence." The Arnells alleged that the tenants posted other messages in the lobby: "We are of the opinion that due to [Jay-Z's] lifestyle of violence, if he moves into our building, he will place us in danger," another note allegedly read.

Famous celebrities have been turned away from buildings before (remember Madonna's rejection by the board of the San Remo?), but not in condos-and not so far downtown.

In the chillier northern climes of the Upper East Side, real estate gets a lot more gangsta. Take financier and Revlon owner Ronald O. Perelman, who last month dispatched legions of lawyers and a private eye just to stop Philippe Delgrange from setting up more outdoor tables at his neighborhood eatery Le Bilboquet (you heard it first in our own Transom column!).

That was quickly resolved when the ensuing press coverage looked worse for Mr. Perelman than for the beleaguered restaurateur. But it wasn't Mr. Perelman's first flexing of legal muscle in the neighborhood: Two years ago, Mr. Perelman led a community campaign to block owner George Votis' proposed 18-foot-high addition to the rear of his property at 41 East 62nd Street. Mr. Perelman got the Historic Districts Council, City Councilwoman Eva Moskowitz and Manhattan Borough President C. Virginia Fields on board to block Mr. Votis' proposal to build a multi-purpose addition at the building for the Philharmonia Orchestra of London. (Mr. Votis served as treasurer for the orchestra's United States fund-raising wing, the Philharmonia Foundation.) Just before Mr. Perelman could stage a sit-in with guitars and tambourines, attorneys for Mr. Perelman secured a temporary restraining order from the State Supreme Court on Sept. 20, 2002, barring Mr. Votis from beginning his proposed $900,000 project. Mr. Votis subsequently withdrew the application.

Guess what happened next? City records show that in October, in a $14.5 million deal, Mr. Perelman and his holding company, MacAndrews and Forbes, purchased the five-story commercially zoned townhouse themselves. According to a spokesperson, the company plans to renovate the unfinished townhouse into expanded offices: the townhouse sits adjacent to MacAndrews and Forbes' headquarters at 35 East 62nd Street.

"[The property] has been sitting vacant, open and gutted for the past year. It was being renovated, then abandoned," MacAndrews and Forbes spokeswoman Chris Taylor told The Observer. "Our intention is to finish the property as a commercial space for a small group of employees. It has been zoned for commercial usage since 1946, and we needed extra space. Our first goal is getting the building closed up because of the impending winter."

Brrr! Ms. Taylor said that the initial plans don't call for a combination of the two properties into one giant townhouse office. Peter Koffler, an attorney for Olma Realty (the corporate entity listed as the townhouse's seller), declined to comment on the deal. Mr. Votis could not be reached for comment by press time.

If all this lawyering has you thinking that Manhattan real estate is finally a force of evil in the world, consider the fraternal love of fashion designer Anna Sui. City transfer records show that in May, Ms. Sui, the designer whose most recent collection was inspired by the 1970's cult movies of Andy Warhol, purchased a fifth-floor loft at 130-134 East 12th Street for $1.4 million. According to the broker on the deal, Anne Marie Salmeri of the Corcoran Group, Ms. Sui's brother, Bobby Sui, plans to reside in the 1,700-square-foot East Village loft, which sits between Third and Fourth avenues and was once a featured spread in Architectural Digest. Ms. Salmeri spoke to the apartment's designer-attuned finish: "It was modern, and had a curved wall in the living room. All the closets and the dressing rooms had beautiful drawers. You didn't need a dresser," she said. Other details include the 12-foot ceilings and the granite surfaces and stainless-steel appliances in a windowed kitchen.

Reached by e-mail, Ms. Sui said only: "Actually, I don't live at that address." She declined a follow-up e-mail seeking further comment. Mr. Sui didn't return calls seeking comment.

Recent Transactions in the Real Estate Market

Greenwich Village

350 Bleecker Street

Studio co-op.

Asking: $422,000. Selling: $422,000.

Maintenance: $588; 60 percent tax-deductible.

Time on the market: one day.

CUP OF SUGAR? The Web site Meettheneighbors.org was organized on the premise that Manhattan apartment-dwellers barely know the people living above, below and across the wall from them. But that's not the case at this co-op on the corner of Bleecker and West 10th Street. "This building is a microcosm of the Village," said Coldwell Banker Hunt Kennedy broker Armanda Squadrilli, who sold this 450-square-foot alcove studio in an all-cash deal to a twentysomething advertising professional. "They have roof parties in the summer. It's a real community." The young lady had been renting in east midtown before she ventured south of 14th Street. And she fell for this building's tight-knit charm. "She knew that bidding on the first day is the way to get [the apartment]," Ms. Squadrilli added. Dina Cohen of Citi Habitats also partnered on the deal.

Tribeca

261 Broadway

Two-bedroom, one-bathroom co-op.

Asking: $1.1 million. Selling: $1.05 million.

Maintenance: $1,368; 51 percent tax-deductible.

Time on the market: 60 days.

VAMOS A LONDON More Manhattan Transfers action in the Tribeca market: From this 12th-floor corner loft on the corner of Broadway and Warren Street, the owner, a Spanish photographer, took in open views of the Brooklyn Bridge and City Hall Park. Recently, however, the gentleman snapped up a Manhattan pied-à-terre and shuffled off to London after listing his two-bedroom, which has seven windows, hardwood floors and stainless-steel appliances in the kitchen. He found a thirtysomething couple trading up from Murray Hill's post-college-co-ed-filled streets. "They wanted to be closer to Tribeca. They were coming from a place with limited views, and they really wanted openness and views," said exclusive broker Shelly Ofterweil Russell, a senior vice president with the Corcoran Group. The couple now plans a renovation to the kitchen and bathroom. The building, abutting City Hall, was converted to lofts in 1980 and has a garden roof deck.

405 Greenwich Street

Two-bedroom, two-and-a-half-bathroom condo.

Asking: $1.85 million. Selling: $1.85 million.

Maintenance: $890. Taxes: $7,200.

Time on the market: two months.

HOT TIMES! It's the rare case in Manhattan's celebrity bubble when your real-estate broker may be more famous than you. But Douglas Elliman's Mark Sebastian, who represented the entertainment executive who recently snapped up this Tribeca loft, had an illustrious career as a songwriter best known for penning the 1966 No. 1 hit "Summer in the City" for the Lovin' Spoonful, the 1960's pop-band most famous for the numbers "Do You Believe in Magic?", "You Didn't Have to Be So Nice" and "Daydream." "I was a pop singer," Mr. Sebastian said. A native of Greenwich Village, he wrote "Summer in the City" at the age of 14 while attending the Tuxedo Park School in Tuxedo Park, N.Y., and went on to be a songwriter for Earth, Wind and Fire, as well as to perform his own live gigs at downtown clubs like the Bitter End, the Village Gate and Gaslight, where Bob Dylan crooned early in his career. "Happily, I still do get those royalty checks," Mr. Sebastian said of his No. 1 hit song. He also has a penchant for fine real estate, bringing his buyer from the Upper East Side to this 2,200-square-foot Tribeca loft on Greenwich Street, on the corner of Hubert Street. The full-floor apartment is accessed by a private stainless-steel elevator and has two bedrooms, windows on three sides, a custom remote Lutron lighting system, central air-conditioning; a wood-burning fireplace, a 70-bottle wine refrigerator and an in-house washer-dryer. "This apartment was about being in the neighborhood and enjoying the gifts of Tribeca," Mr. Sebastian said. Jon Capobianco of the Corcoran Group represented the seller.